$1,000 Annual Fees on Premium Credit Cards Could Soon Be the New Normal

America’s premium credit cards are inching toward an eye-popping milestone: a $1,000 annual fee.

Last week marked a major step toward that new norm. American Express announced it's raising the yearly fee on its Platinum card from $695 to $895, following a decision by Chase earlier this year to increase the fee for its popular Sapphire Reserve card to $795. Citi introduced a $595 premium-tier card, the Strata Elite, in July.

They join the the long-reigning champs of high annual fees: Amex’s Centurion card ($5,000 and invite only) and Barclay’s 24-carat gold-plated Luxury Card ($995).

Annual credit card fees usually go in one direction: up. That means credit cards' slow march toward four-figure fees is just the beginning.

“Unless macro or regulatory factors intervene,” says John Cabell, managing director of payments intelligence at J.D. Power, “I expect that within five years we may see $1,000 or more as a price tag for some high-end products in the U.S."

Why are annual fees getting so high?

When the Chase Sapphire Reserve hit the market in 2016, it carried a $450 annual fee — almost quaint by today’s standards. After a 77% increase in less than a decade, the premium card’s fee, now $795, stands more as a norm than an outlier.

But it’s not just ultra-premium cards that are seeing annual fee hikes. In recent months, annual fees for several Southwest Rapid Rewards cards jumped between $30 and $100 per card. The same goes for United Airlines, which increased fees by as much as $170 per card.

Cabell says there are several reasons card issuers are hiking fees right now, and they all have to do with benefits. Those rewards aren’t cheap, and demand for them is “ever-increasing,” he says.

After all, if a credit card is going to charge an annual fee, the customer expects something in return.

Take the Amex Platinum card, for example. While the $200 fee hike to $895 is steep, the company said it is rolling out an additional $2,000 worth of benefits at the same time, plus new benefit-tracking features for cardholders to monitor all their rewards. Among a slew of benefits are $300 per year of entertainment credits usable on streaming services and newspaper subscriptions; $120 for an Uber One membership; $600 in Amex hotel credits and more.

At the same time, cardholders increasingly want a statement piece, not just a plastic credit card, according to research from the biometrics and payment firm IDEMIA. Metal cards are especially in vogue, as are custom artwork and flashy designs that include LED lights.

Cardholders, and especially Gen Zers, are demanding more personalized cards because they “want to feel special,” James Sufrin, a senior vice president of payment services at IDEMIA, previously told Money.

Of course, exclusive branding and design also costs more for card providers, which fee hikes help offset. All of this is ultimately part of a broader campaign to attract high-end customers — the younger, the better — who as Cabell says “are very willing to pay fees for exclusive privileges.”

The fight for big spenders

Fancy card designs, loaded benefits packages and new fee structures all point to one thing: Credit card companies are duking it out to lure in high-income earners — and keep them spending.

That’s largely because those are the people who are buying a bunch of stuff in today’s economy. According to Moody’s Analytics, the top 10% of earners in the U.S. now account for nearly half of all retail spending nationwide. (Meanwhile, lower income folks have been pulling back on retail spending while struggling with elevated levels of debt.)

So even if that means providing far fewer cards to focus on wealthier customers, it’s a winning strategy.

“These cards are profitable for issuers,” Cabell says. And it's not just because of the steep annual fees.

The real money is in swipe fees, which are charged to merchants who accept credit card payments. Usually these fees run between 1% and 3% of the transaction cost, sometimes with an additional flat fee. In effect, credit card companies get a slice of every purchase the card is used for — on top of annual fees and any interest on revolving balances. Last year, the credit card industry made over $230 billion in swipe fees alone, sparking condemnation from merchant groups who are in favor of more regulation on these charges.

As for the annual fees, which cardholders pay, their role is partially psychology. Yes, they are a stand-alone revenue driver, but they serve another purpose: High annual fees further incentivize cardholders to use that specific card to make large purchases in order to reap its benefits, thus creating a win-win for card providers.

And it seems some customers don’t mind it, either.

"Honestly, I thought they'd turn this into a useless coupon book credit card," one Reddit user wrote this week, discussing the revamped $895 Amex card. "But I was wrong. At least partially."

"Yes, it is a coupon book credit card," the person added, "but it's a good one."

This reaction is not unique. According to J.D. Power’s 2025 credit card satisfaction survey, higher annual fees are actually linked to higher overall satisfaction with credit cards. The survey found that people who have a credit card with an annual fee said they were more satisfied than customers who used cards with no fees.

When the fee was $500 or more? Satisfaction was even higher. This dynamic could potentially create a curious feedback loop in which more expensive credit card fees lead to higher satisfaction, and vice versa.

“As long as the perceived mix of benefits and rewards seems rich enough,” Cabell says, “satisfaction could support increased fees.”

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