American Express

Is American Express Out of Touch With Consumers?

This past weekend, I canceled two American Express cards: The (personal) Platinum Card and the Hilton Honors Aspire. The annual fees were up and it was time to dump two cards that I felt were no longer worth paying for. I did intend to pick up a Hilton Ascend and figured I’d keep a Business Platinum card long-term since it had a lower $450 annual fee. Not anymore. Yesterday, American Express announced a $155 fee increase for the Business Platinum Card. Alongside some “exciting new changes.” None of which will make any of their customers happy. But what else is new? This is just another reminder that American Express is out of touch with consumers.

First, they lost Costco. Their next misstep was when they announced a $100 fee increase on the Platinum Card. The justification? An annual $200 Uber credit…paid out in monthly installments. At the time, I defended the Amex Platinum fee increase because I personally used it for Uber Eats all the time and thought it was worth it. But then I realized I’m only using Uber Eats to utilize the credit and spending money that I wouldn’t otherwise. So that 50% discount isn’t much of a discount for me after all.

I did cancel the card recently and pick up a Business Platinum Card for my dad. That card carries a fee of *only* $450 and offers pretty much the same benefits. Plus, a 50% bonus on purchases over $5,000, which makes it great for (moderate) manufactured spending. Now that the annual fee on this card is going to be almost $600, I’m dumping this card as soon as the first year is up. In exchange for an extra $145 per year, cardholders get an annual $200 statement credit from Dell (“Dude…no one wants a Dell.”), WeWork membership, and a $100 hotel credit on Hotel Collection bookings. Don’t get excited about that last one – it’s basically just a $25 increase from the current credit.

American Express has a lot of competition when it comes to their business cards. That’s what makes moves like this one so baffling. During a time when they’re losing market share to Chase, it’s interesting that American Express responds not by improving its products but by increasing annual fees. Maybe they’ve given up on making their products more appealing to average consumers and are instead focusing on eliminating undesirable customers like the travel hacking crowd, with their fake ebay businesses created for the sole purpose of milking credit card sign-up bonuses. But if that’s the case, then why the hard push to get affiliates to promote these business cards to the 9-5 crowd?

If American Express is still chasing Millenials, they need to learn to compete better with superior credit card offerings. That starts with practical benefits. Chase is killing it when it comes to both personal and business credit cards targeted towards virtually every demographic. Meanwhile, American Express is struggling to attract everyday customers because they’ve grown out of touch with what consumers want: Value. Whether you’re paying $0 or $600, the card has to be worth keeping. Most of American Express’ premium cards are not.

When looking over my Amex card collection the other day, I realized all I have left are the SPG Amex Everyday cards. The former has lost its value thanks to the SPG-Marriott merger and I’m only keeping the latter because it has no annual fee. An exchange with a reader on Facebook made me realize American Express is actually improving its offerings for cheaper cards. But when it comes to the premium card market, which is becoming more competitive, Amex is falling behind. You can’t just slap a $600 fee on a credit card and call it premium. A credit card is not a Birkin Bag – you can’t price it outrageously and expect people to go nuts trying to get their hands on it.

Bottom line, American Express is approaching this the wrong way. Rather than competing with the likes of Chase, they’re chosing to make their products more aspirational. Will it work? I don’t know, ask every other person at a restaurant pulling out their Chase Sapphire Reserve when the bill comes out.

What are your thoughts on American Express raising the fee on the Business Platinum Card to almost $600?

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  1. Agreed. Where did small business Saturday’s go? I was debating to either get platinum personal or business card. With this increase I went for platinum personal.
    Any pointers to meet the minimum spend other than using Plastiq? Not a big fan of kiva etc.

    • That’s tricky, since you’ll need to pay a merchant that qualifies for Amex payments (i.e. no mortgage/rent payments). I met a lot of my spend by paying a vendor on behalf of my job. I also did large chunk of spend via Kickfurther. This time of year, reselling/retail arbitrage are worth looking into.

  2. john rimington

    Did they not try and waive fee to keep you ?
    I have the new gold card seems the only Amex card with good value!

  3. Jeanine Sorrentino

    “TRAVEL HACKING CROWD WITH THEIR FAKE EBAY BUSINESSES.” Interesting attitude from you…..

  4. Sandy Davis

    I don’t think they’re out of touch. They’re seeking a different kind of client . In fact, I welcome even higher fare increase .

    If you step into their lounge during rush hour you’ll understand why. It’s simply not usable. They will loose more high paying customers by having a crowded lounge

    It’s supply and demand. AMEX should increase the price enough that limits amount of people entering the lounge. I think the price probabky would be around $800 a year .

    • That’s a good point Sandy – a very common complaint about the Centurion Lounges these days. But I also think they did this to themselves, trying to compete with the CSR by targeting their product to less affluent clients. And now that they have a wider client base, their offerings have declined in quality. It’s a tough balancing act.

    • I don’t know about raising the fee to $800, but maybe a income requirement in order to have the card. I think that would kill a lot of the turning crowds away.

  5. but what do you get for $800? not much beyond Centurion lounges (which – even if less crowded – are not really anything to write home about)…Uber credits, Saks credits – that might be appealing to some, but cannot be appealing to practically everyone (I am talking CSR here, where dining and travel are pretty much universally appealing categories)…besides, Amex is overzealous in shutting down real or potential “threats”, almost to a point of paranoia…

  6. Sandy Davis

    Of course, that’s the point. When people find 800$ way too much for lounge access, they don’t pay it. That’s why first class and business class retails $4000+ not $300.

    AMEX was never a company chasing after mid tier customers. They’ve only known to chase higher end customers..

    • In recent years they’ve gone after mid-tier customers to stay competitive with Chase. They’ve also continued their affiliate relationships with travel hacking bloggers and expanded their refer-a-friend promos to target “regular” customers. I think it’s setting for them that it was not the best strategy. They’re not Chase and shouldn’t try to compete for their clients.

  7. Mark Ostermann

    You don’t think Amex offers a lot of value with the Aspire card? I feel like that is the most generous perks card out there.

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