Amex and Chase added $445 a year to the cost of holding both premium cards

The two increases are not the same size. Amex added $200 to a $695 fee, which is 28.8% ^[4][16]. Chase added $245 to a $550 fee, or 44.5% ^[5][17]. A customer carrying both now pays $1,690 a year where the pair cost $1,245, an increase of $445 ^[18].

David Shipper of Datos Insights told American Banker that the increases may help banks "trim the fat," and said cardholders who only use the card to maximize rewards may not be that profitable to the bank ^[7][8]. A higher fee is a cheap way to test which is which, because the holders who leave are the ones the issuer had already decided it could lose.

The complication is what else walks out with them. "For banks, it's about the relationship. You want deposits, lending products, and deep connections. It's not just the revenue proposition for the card," Brian Riley, co-head of payments at Javelin Strategy & Research, told American Banker ^[6]. A fee screen selects on card behaviour. The points optimiser who keeps a mortgage and a deposit balance at the same bank pays the same increase as the holder with nothing else at the bank.

Riley said it is often easier to attract cardholders with introductory points and perks, and that the year-two proposition has to be meaningful or customers will not keep the card ^[12]. Retention was already the harder half. The payment consultants' suggested fix is making membership benefits easier to access ^[14]. Benefit access is an operations project, and it lands in the same year the fee goes up.

EY's John Radecki wrote that many cardholders spread spending across multiple cards to maximise rewards, which can increase costs for issuers without a comparable increase in revenue, and that EY research indicates more than 40% of younger consumers are comfortable with AI recommending which credit card or bank account to use for a purchase ^[10][11]. Radecki also wrote that what distinguishes the segment is "not the annual fee alone, but the ability to deliver a differentiated customer experience that keeps the card at the center of the customer's financial relationship" ^[13]. Software that picks a card per transaction makes spreading effortless, and it reassigns that centre purchase by purchase.

American Banker's account does not include attrition rates or per-account profitability from any of the issuers named, so the squeeze on margins is a consultant's assessment: Radecki wrote that competition continues to intensify while the cost of rewards, benefits and services keeps rising, "making it harder for issuers to differentiate without putting pressure on margins" ^[9]. The increases shed only unprofitable holders and the segment gets smaller and better. Or they shed spend that the interchange and co-brand economics needed, and the fee income does not cover the lost volume. Or AI routing arrives first and the annual fee becomes a toll on benefits used a few times a year. In my view the $895 and $795 levels hold and the next move is in benefit access, because that is where the advice points ^[14]. Evidence against it would be an issuer walking a headline fee back down, or premium account counts that grew straight through the increase.