The most exclusive credit cards are about to get even more expensive
When JPMorgan Chase said it was raising the annual fee by 45% on its popular Sapphire Reserve credit card, longtime cardholder David O'Brien didn't notice.
'My eyes glaze over with this stuff," said the 36-year-old New York lawyer.
Until a reporter told him that the fee will soon rise to $795, from $550, he assumed he had been paying less than $100 a year. A brief shock, acknowledged with an expletive, gave way to acceptance.
Top credit card companies have stumbled on a winning formula at odds with almost every other sector of America's inflation-obsessed economy: Raising their prices is good for business. Already sold by the status the cards convey, a large number of customers are willing to eat the costs.
This is JPMorgan's third and largest increase to its annual fee for the Sapphire Reserve card since it was launched in 2016 at $450 a year. It takes effect Monday for new customers and in October for existing customers.
American Express, whose Platinum card usually carries the heftiest fee in its market segment, is expected to raise its $695 fee—even higher than the Sapphire Reserve's—in its fall refresh, analysts say.
'I've been surprised at the ability to continue to extract higher pricing," said Moshe Orenbuch, a managing director at TD Securities. When the Sapphire Reserve launched, analysts doubted there was much appetite for triple-digit annual fees. 'Issuers have been positively surprised at how many of those folks there are."
Price hikes make the cards appear more exclusive. Except rather than offering a luxury good such as a diamond ring or fancy ride, the companies offer the chance to spend more.
The cards' allure 'can lead to behaviors that you can't justify" based on function alone, said Derek Rucker, a marketing professor at Northwestern's Kellogg School of Management. 'That's where the math doesn't have to make sense," he said.
Theoretically, the math can make sense. Chase touts the more than $2,700 in annual value on its refreshed Reserve card, including hotel and dining credits and travel perks. Amex Platinum offers similar benefits for frequent travelers.
O'Brien, the New York lawyer, said that despite the fee increase, he expects the math to work out for keeping his Sapphire Reserve card. He regularly uses points from the card to book flights and hotel stays, and says lounge access offsets the cost of a few pricey airport cocktails.
But many perks go unredeemed. According to the latest data from the Consumer Financial Protection Bureau, cardholders earned over $40 billion in rewards in 2022, yet more than $33 billion went unclaimed—a 40% jump since before the pandemic. The average account sat on $150 in unused perks.
A dining room at the American Express Centurion New York restaurant.
Redemption now requires more effort than ever before.
Jacob Moon, a 36-year-old investment banker in Los Angeles, didn't mind the fee increase, but bristled at the fine print. Many perks are delivered in increments and expire monthly. For instance, Chase is advertising a $500 hotel credit as a new benefit with the Sapphire Reserve. But half of the credit must be used in the first six months of the year, and half of it in the last six months.
'For the amount I spend, I want freedom, not a schedule," Moon said. 'This card is giving me homework."
Such complexity favors users who track every point and benefit—and banks know that. Regardless of whether perks are redeemed, the card issuer collects the fee.
'The vast majority of people will see all that as a headache," said Greg Davis-Kean, founder of travel website Frequent Miler.
Chase has taken steps to streamline its rewards. Cardholders now earn eight points per dollar on all travel booked through its portal—previously, different rates applied to flights and hotels. Chase also shows unclaimed benefits in its app.
'We're all about getting customers to redeem 100% of their benefits," said Allison Beer, CEO of card and connected commerce at Chase.
The higher fees will inevitably be too much for some customers to swallow. That might be the point, said Patrick Mrozowski, the founder of Atlas, a credit card company that charges a $1,000 annual fee and offers cardholders access to a concierge service, including help securing hard-to-get reservations at such restaurants as New York's The Corner Store.
'Maybe their overall number of customers drops, but the level of engagement from the core base increases, and that's a better way to grow," Mrozowski said.
Chase said it doesn't expect significant attrition from its Sapphire Reserve revamp, but acknowledged that some customers might decide to downgrade to the lower-fee Preferred card or opt out entirely.
A Bank of America Global Research survey earlier this month found that only 9% of Chase cardholders said they would cancel their most-used premium card if the annual fee increased by $100.
Michael Andeberhan, a 44-year-old who works in asset management, carries both the Sapphire Reserve and the Amex Platinum and keeps a close eye on whether he's getting his money's worth from each. But with the prospect of higher annual fees on both cards, he's starting to question whether two is too many.
Having two cards divides his spending, and each credit card company reserves its best perks for customers who spend the most on their cards. For example, cardholders who charge more than $75,000 a year on a Chase card unlock top-tier status at IHG Hotels and Resorts.
'Is it worth having two premium cards?" Andeberhan said. 'Because you can only spend your money on one card."
Write to Imani Moise at imani.moise@wsj.com and Jacob Passy at jacob.passy@wsj.com
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The most exclusive credit cards are about to get even more expensive
When JPMorgan Chase said it was raising the annual fee by 45% on its popular Sapphire Reserve credit card, longtime cardholder David O'Brien didn't notice. 'My eyes glaze over with this stuff," said the 36-year-old New York lawyer. Until a reporter told him that the fee will soon rise to $795, from $550, he assumed he had been paying less than $100 a year. A brief shock, acknowledged with an expletive, gave way to acceptance. Top credit card companies have stumbled on a winning formula at odds with almost every other sector of America's inflation-obsessed economy: Raising their prices is good for business. Already sold by the status the cards convey, a large number of customers are willing to eat the costs. This is JPMorgan's third and largest increase to its annual fee for the Sapphire Reserve card since it was launched in 2016 at $450 a year. It takes effect Monday for new customers and in October for existing customers. American Express, whose Platinum card usually carries the heftiest fee in its market segment, is expected to raise its $695 fee—even higher than the Sapphire Reserve's—in its fall refresh, analysts say. 'I've been surprised at the ability to continue to extract higher pricing," said Moshe Orenbuch, a managing director at TD Securities. When the Sapphire Reserve launched, analysts doubted there was much appetite for triple-digit annual fees. 'Issuers have been positively surprised at how many of those folks there are." Price hikes make the cards appear more exclusive. Except rather than offering a luxury good such as a diamond ring or fancy ride, the companies offer the chance to spend more. The cards' allure 'can lead to behaviors that you can't justify" based on function alone, said Derek Rucker, a marketing professor at Northwestern's Kellogg School of Management. 'That's where the math doesn't have to make sense," he said. Theoretically, the math can make sense. Chase touts the more than $2,700 in annual value on its refreshed Reserve card, including hotel and dining credits and travel perks. Amex Platinum offers similar benefits for frequent travelers. O'Brien, the New York lawyer, said that despite the fee increase, he expects the math to work out for keeping his Sapphire Reserve card. He regularly uses points from the card to book flights and hotel stays, and says lounge access offsets the cost of a few pricey airport cocktails. But many perks go unredeemed. According to the latest data from the Consumer Financial Protection Bureau, cardholders earned over $40 billion in rewards in 2022, yet more than $33 billion went unclaimed—a 40% jump since before the pandemic. The average account sat on $150 in unused perks. A dining room at the American Express Centurion New York restaurant. Redemption now requires more effort than ever before. Jacob Moon, a 36-year-old investment banker in Los Angeles, didn't mind the fee increase, but bristled at the fine print. Many perks are delivered in increments and expire monthly. For instance, Chase is advertising a $500 hotel credit as a new benefit with the Sapphire Reserve. But half of the credit must be used in the first six months of the year, and half of it in the last six months. 'For the amount I spend, I want freedom, not a schedule," Moon said. 'This card is giving me homework." Such complexity favors users who track every point and benefit—and banks know that. Regardless of whether perks are redeemed, the card issuer collects the fee. 'The vast majority of people will see all that as a headache," said Greg Davis-Kean, founder of travel website Frequent Miler. Chase has taken steps to streamline its rewards. Cardholders now earn eight points per dollar on all travel booked through its portal—previously, different rates applied to flights and hotels. Chase also shows unclaimed benefits in its app. 'We're all about getting customers to redeem 100% of their benefits," said Allison Beer, CEO of card and connected commerce at Chase. The higher fees will inevitably be too much for some customers to swallow. That might be the point, said Patrick Mrozowski, the founder of Atlas, a credit card company that charges a $1,000 annual fee and offers cardholders access to a concierge service, including help securing hard-to-get reservations at such restaurants as New York's The Corner Store. 'Maybe their overall number of customers drops, but the level of engagement from the core base increases, and that's a better way to grow," Mrozowski said. Chase said it doesn't expect significant attrition from its Sapphire Reserve revamp, but acknowledged that some customers might decide to downgrade to the lower-fee Preferred card or opt out entirely. A Bank of America Global Research survey earlier this month found that only 9% of Chase cardholders said they would cancel their most-used premium card if the annual fee increased by $100. Michael Andeberhan, a 44-year-old who works in asset management, carries both the Sapphire Reserve and the Amex Platinum and keeps a close eye on whether he's getting his money's worth from each. But with the prospect of higher annual fees on both cards, he's starting to question whether two is too many. Having two cards divides his spending, and each credit card company reserves its best perks for customers who spend the most on their cards. For example, cardholders who charge more than $75,000 a year on a Chase card unlock top-tier status at IHG Hotels and Resorts. 'Is it worth having two premium cards?" Andeberhan said. 'Because you can only spend your money on one card." Write to Imani Moise at and Jacob Passy at
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