In many cases, when the market leader in a category raises prices, that paves the way for similar increases by rivals.
For example, when Costco raised its membership fees on Sept. 2024, and saw no drop in membership, paving the way for Sam’s Club to do the same this year.
The pattern is consistent. If the market leader raises prices without losing customers, it usually resets the ceiling for the entire industry.
“The single most important decision in evaluating a business is pricing power,” Warren Buffet told the Financial Crisis Inquiry Commission in 2010. “If you have the ability to raise prices without losing business to a competitor, you have a very good business. And if you have to have a prayer session before raising the price by 10%, you will get less business.”
In all industries, price leadership often functions less as a single decision-maker and more as a way to quickly show competitors what they are putting into their pricing strategies and products.
That’s a long-standing trend in the wireless phone space, though the example sometimes works for consumers.
IT-Mobile, for example, dropped contracts in 2013, and AT&T and Verizon had to follow soon after.
In fact, T-Mobile has made a series of “Un-Carrier” moves, including lowering exorbitant prices, offering unlimited text and calls, and offering prices that include taxes and fees, which its biggest competitors have to follow.
That is often true in the credit card space as well.
“Offers are developed throughout the year… If Chase does something, Citi responds. Or if Amex raises an offer, Bank of America counters,” Brian Riley, director of credit payments at Javelin Strategy & Research, commented on the industry’s credit card competition.
However, often, when a company makes a move that all of its competitors follow, that usually doesn’t mean good news for consumers.
That’s why American Express is raising the fee for its top-tier Platinum card, and not seeing that devastating finding, it could pave the way for competing credit card companies to do the same.
Companies rarely raise prices without trying to sell consumers that they are actually getting more value for their dollars. That’s what American Express did in late 2025 when it raised fees for its Platinum card from $695 to $895.
“US Consumer Platinum Card® members can now access more than $3,500 in annual lifestyle benefits, including new credits on qualifying purchases with Resy, lululemon, Uber One Membership, and upgrades to existing hotel and digital entertainment credits,” the company shared in a press release.
The company defended the price increase to The Associated Press.
These benefits are enough to justify a $200 increase in the annual fee, Howard Grosfield, group president of US Consumer Services at AmEx, told the AP.
The annual fee for the Platinum card was $550 five years ago.
“What we’re trying to do is two things: We want to make sure we’re delivering $3,500 in benefits far, far beyond the $895 fee and we’re making it easier to find more ways for card members to get benefits beyond that amount,” Grosfield said.
When a company raises the price on a product that is renewed every year, that gives it the option to make changes if the initial numbers aren’t good.
Costco admitted that if it ever raised membership fees and saw customer backlash, it would be able to adjust in real time. That did not happen according to the latest membership price.
“Importantly, about 1/4 of the US Platinum consumer portfolio has been charged a higher annual fee, and we have not seen a change in our higher retention rates compared to the restart,” said CFO Christophe Le Caillec during the company’s first quarter call.
Revenue from Platinum cardholders grew 6% in Q1, CEO Stephen Squeri mentioned during the call.
“Most of that, given the size of the portfolio, is from tenured card members. While we’re very pleased with the new account acquisition, most of that 6% lift is from the back book,” he added.
Back when I traveled several times a month for business and personal reasons, I found the American Express Platinum to be an invaluable tool. Access to airport lounges may not have justified the membership fee, but the value of having a clean work and shop space, an open bathroom, and decent toilets was hard to beat.
Now that I fly a lot less, I no longer carry American Express Platinum, but that’s not because of the price increase. It was more than that because the card’s main benefits are skewed toward airport and hotel benefits, and I don’t need that much anymore.
Other Merchandise:
A View From the Wing’s Gary Leff laid out American Express’ strategy on his travel website.
“Increasingly, annual fees are part of their revenue. The best cards return the cash flow to the customer, but the card’s minimum fee is increasing, and consumers are paying it,” he said.
That’s a strategy some credit card companies use.
“Offering an attractive card with benefits increases spending, and keeping more of that spending within their ecosystem. Amex pushes people into their travel space and Resy which is theirs. Chase pushes their card members to be Chase Travel (and away from Expedia and Airbnb) and in stores with Chase, although the experience there leaves something to be desired,” he added.
Changing perceptions about costs helped American Express justify price increases.
“Analysts say younger generations, who make up the bulk of AmEx cardholders, are more comfortable paying credit card fees, viewing them as subscription-like products that bring significant value to travel, dining, and entertainment,” Reuters reported.
Axios noted that American Express has been on the receiving end of credit card fee hikes, but Chase actually set the precedent with its premium card price hikes.
“The annual fee for the Chase Sapphire Reserve card has increased to $795 from $550,” according to Axios. “It’s not just the credit card companies that cater to high-income groups,” he added.
Airlines, the site reported, “are increasingly open about targeting their high-spending consumers, with Delta increasing benefits for its high-spending travelers and JetBlue working more liberally to target high-income earners.”
Analysts and industry reporting suggest that American Express’ recent Platinum raise reflects a broader shift toward premium, high-value credit cards, with additional benefits used to justify rates and set a new benchmark for competitors targeting affluent customers.
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This story was originally published by TheStreet on April 26, 2026, where it appeared first in the Marketing category. Add TheStreet as a favorite source by clicking here.
