Key Points
American Express (NYSE: AXP) recently raised the price of its exclusive Platinum card from $695 to $895. It’s the first increase since 2021, when it was raised from $550 to $695.
The company offers a long list of perks with the “refresh,” worth $3,500 if used in full, plus the prestige of owning a Platinum card and miles for every dollar spent. But the major perk is for Amex, since card fees account for a major portion of total revenue and provide a recurring source of income. American Express will report second-quarter earnings on July 24. Here’s why card fees matter.
The most prestigious card
American Express pioneered the credit card fee model, which has evolved into a subscription model of sorts, with members paying an annual fee for the privilege of using an Amex card. Not all cards come with fees, but the company targets affluent spenders who crave prestige and perks. Seventy-three percent of the 3.1 million new cards in the 2026 first quarter were fee-based.
The highest-income earners account for the most spending, and American Express aims to capture this cadre of members by offering ever-expanding rewards and exclusivity that can’t be matched. According to data from Moody’s, the top 10% of earners accounted for 49.2% of spending in the 2025 second quarter, the highest percentage since it started compiling the data in 1989. This is who Amex is after.
However, it’s not just for the spending. The fees themselves are a major part of the model, since they provide a stable source of revenue independent of spending. As inflation stays strong and interest rates stay steady, fee income matters even more.
Since there aren’t many costs associated with the fee, it goes straight to the bottom line, expanding net income. That’s also important if the company needs to increase its loss provisions in a challenging economy.
What it’s going to look like on the income statement
In the 2026 first quarter — the first quarter to include the higher annual fee — revenue increased 11% year over year, and earnings per share (EPS) rose 18%. Card fees increased 18% and accounted for more than 14% of revenue. U.S. consumer Platinum spending accelerated by six percentage points, and retention rates remained stable near 100% despite the fee hike.
These members are highly engaged with the rewards platform. In the first quarter, for example, spending on Resy restaurant spend, which is Amex’s restaurant app, increased 20% year over year, double the 10% increase for U.S. consumer spend, and lodging spend increased 50%, whereas U.S. consumer spend was up 5%. In other words, the card and its rewards mean a lot to users, and the fee income is likely to continue adding to the total revenue.
The 29% fee hike for the Platinum card should add meaningful growth to the total this year, and the durable subscription model is an underrated feature that makes American Express stock compelling.
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American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express. The Motley Fool has positions in and recommends American Express and Moody’s. The Motley Fool has a disclosure policy.
