Fed Up: American Express Cardholders Downgrading Premium Cards Amid Rising Fees
NEW YORK – November 8, 2023 – A growing number of American express cardholders are opting to downgrade from high-annual-fee cards, signaling a shift in consumer tolerance for premium credit card costs. This trend, observed across popular travel and rewards cards like the Platinum and Gold cards, comes as Amex has steadily increased annual fees and reduced benefits, prompting cardholders to reassess the value proposition.
The escalating costs of maintaining these premium cards – now ranging up to $695 annually for the platinum Card – are colliding with a changing economic landscape and evolving consumer spending habits. While Amex cards historically offered unparalleled travel perks and rewards, recent adjustments, including benefit reductions and fee hikes, have lead many to conclude the benefits no longer justify the expense. This impacts not only individual cardholders but also American Express’ revenue model, which relies heavily on annual fees from its premium card base. The downgrades are expected to continue as cardholders re-evaluate their options ahead of annual renewal dates.
Live and Let’s Fly first reported on the increasing trend, noting a surge in inquiries and reports from readers actively downgrading their cards. The site’s founder, Matthew Klint, observed that the changes made by American Express have eroded the perceived value for many, stating, ”American Express has been steadily chipping away at the benefits of these cards while simultaneously raising the annual fees. It’s a double whammy that’s pushing people to reconsider.”
The Platinum Card,once lauded for its extensive airport lounge access and travel credits,has seen reductions in benefits like access to Centurion Lounges and changes to airline fee credits. The Gold Card, popular for its dining and grocery rewards, has also faced scrutiny over benefit adjustments.
Cardholders are primarily downgrading to cards with lower or no annual fees, such as the Blue Cash Preferred card or the EveryDay Preferred Card, retaining some Amex benefits while considerably reducing their annual expenses. This shift highlights a growing consumer demand for openness and value in the premium credit card market, potentially forcing American Express to re-evaluate its strategy to retain its high-spending customer base.
