The Consequence of $695 Annual Fee Platinum – Annual Fee Increased, Again!

By this point you’re likely aware that the annual fee of American Express Platinum is increasing to $695, which is a whooping increase by $145 or roughly 26 percent. Remember that the previous annual fee increase happened from $450 to $550 which was an increase by $100 or roughly 22 percent.

On a regular basis, I don’t think American Express will get as much applicants as they normally would. After all, $695 is a lot of money and for whatever reason the increase from $550 to $695 sounds much much more than that from $450 to $550. I think the whole idea of paying near $700 annual fee isn’t going to sit very well with a lot of people. I am betting on this sweetening the deal on the Platinum card.

However, from a strictly, “I just want to maximize the deal” perspective, the card got better just like it did when annual fee was raised to $550. Obviously, the raise in annual fee isn’t the bit that is sweetening the deal, instead it is the junk that American Express throws in as benefits. For the sake of completeness, let me first list out the monatary benefits in the refreshed Platinum card:

1. $240 Entertainment Credit (new)
2. $300 Eqinox Credit (new)
3. $179 Clear Credit (new)
4. $200 Hotel Credit (new)
5. $200 Uber Cash (old)
6. $100 Saks Credit (old)
7. $200 airline fee credit (old)

If I had to guess I would say that #1 and #2 are subsidized by the merchants at much higher rate than say Uber and Saks benefits were. Anyway, for many people, because of limitation in what counts towards entertainment credit, this benefit will be near useless. Some will find use out of Equinox credit but this one will also be useless to vast majority of people. Would it not have been nice if you could use the credit at Equinox shop?

Anyway, the addition of hotel credit is a huge one. It will make double and triple dipping a very pleasant experience. Someone is eventually bound to tell us how to convert this credit into a gift card, so yeah it will be worth the raise in annual fee.

So, let’s go back to the idea of American Express not getting as much consumer interest in this card. Well, if that is true, then we can expect to see an even generous retention offer. For the record, American Express already has some of the most generous retention offer (50k MR offer is insane) and you can get them all via chat. I’m not sure if the signup bonus would instantly increase. My personal opinion is that the current 100-150k offer is already accounting for the upcoming increase in annual fee. However, as the saying goes, STONKS signup bonus only goes up so I am sure the sign up bonus would eventually go up later. We might just see 200k membership rewards offer by 2023.

Overall, I am not worried that American Express improved the annual fee in their publicly available most premium card. However, I am worried about the likes of Chase and Citi increasing annual fee in their card without adding much of value. Often the market of premium card rewards card goes as such – American express innovates, other banks eventually catch on what’s going on and then proceed to copy Amex. This was true for amex offers, amex lounges, changing/adding benefits during pandemic, or heak the whole premium card space. Remember the likes of Chase Sapphire Reserve and Altitude Reserve didn’t even exist until a few years ago.

Closing Thoughts

Would you pay $695 for Citi Prestige or Chase Sapphire Reserve without any additional benefit? Will Citi and Chase find BS subsidized benefits of their own to add to their card? Will they offer as attractive of a package as Amex Platinum? What benefits would you like to see in Citi Prestige and Chase Reserve? What would make you pay $695 on a non-Amex card?