Amex, Chase Hike Premium Card Fees, Adding Luxury Perks
Credit card companies American Express and JPMorgan Chase have upped the ante in the rewards game, hiking annual fees for their premium cards and adding lavish perks. This move, while enticing high earners, has broader implications for consumers and merchants alike.
The Amex Platinum Card now commands an annual fee of $895, while the Chase Sapphire Reserve is $795. Both cards have beefed up their benefits, with the Platinum Card offering a $200 credit for an Oura ring and the Sapphire Reserve providing a $500 credit for high-end hotels. These enhancements come as credit card companies strive to attract and retain high-spending customers.
However, these perks don't come cheap. The costs are ultimately passed on to consumers through higher merchant fees, which have surged nearly 70% since the Covid-19 pandemic began. This increase, coupled with higher annual fees and other charges, can lead to indirect price hikes for all consumers, regardless of whether they use rewards cards or not. Cash payers, in effect, subsidize credit card users by paying the same prices without reaping the rewards.
Despite Americans' economic concerns, high earners continue to spend significantly, driving demand for these premium cards. Yet, legislation aimed at promoting competition and lowering acceptance fees has stalled, leaving merchants and consumers to bear the brunt of these rising costs.
As American Express and JPMorgan Chase raise the stakes in the rewards card race, consumers and merchants are left grappling with the fallout. Higher merchant fees and annual charges, fueled by increased swipe fees and lavish perks, contribute to a rising cost of living for all. With high earners driving demand and legislation slow to respond, the future of credit card rewards and their impact on prices remains a contentious issue.
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