Your premium credit card just got more expensive. Is it still worth it?

Americans love their credit cards, and it shows. Outstanding credit card balances surged to $1.21 trillion in the second quarter of 2025, up 5.87% from a year ago, according to the latest data from the Federal Reserve Bank of New York.

But not all cards are created equal. Premium credit cards have soared in popularity over the past decade thanks to the generous perks they offer to customers who are willing to shell out annual card fees.

Having one of these coveted cards in your wallet is almost seen as a status symbol among rewards card enthusiasts who spend big to earn valuable perks. But if you’ve recently opened your credit card statement to find your annual fee has jumped considerably, you’re not alone. 

The American Express Platinum and the Chase Sapphire Reserve — arguably among the most popular premium credit cards available — both hiked their annual fees to $895 and $795, respectively, this year.

Chase Sapphire Reserve launched in 2016 at $450, stayed there until 2021, then jumped to $550 before being hiked to $795 — a 77% increase inside of a decade. American Express Platinum followed a similar path — $450, then $550, then $695 and now $895 as of September — a more than 98% increase.

"We've definitely seen an accelerating trend of these fees going up," said Nick Ewen, senior editorial director at The Points Guy. Ewen himself has 26 different active credit cards in his wallet. "What I also think is interesting is we have seen this start to impact other cards as well, not just those high-end cards."

Airlines Delta, United and Southwest have all increased fees on their mid-tier cards. Delta's entry-level Gold card went from $95 to $150.

It seems the era of cheap premium perks is over as sticker shock sets in. But before you cancel that coveted metal card, experts say there's more to consider than steeper fees.

But why are annual fees going up now?

Credit card issuers aren’t just hiking fees to line their pockets. Instead, they're responding to what they see as evolving consumer expectations, particularly among high-income customers.

An American Express spokesperson explained that the company refreshes its products every three to five years based on extensive research, including focus groups and call-listening.

"We're able to see a lot of really, really rich data about how people are using their cards, where they frequent, where they like to shop and where they like to travel,” the spokesperson told Quartz, adding that the card has a consistent 98% customer retention rate. “We want people to use their benefits. When people use their benefits, they feel good about the product."

But the goal isn't just to increase revenue from annual fees; it's to drive card usage with preferred spending partners. When AmEx announced its latest Platinum refresh, it added a $400 annual Resy dining credit alongside the fee increase. It also touted over $3,500 in annual value, as well as a limited-edition mirror design to give it an extra oomph. Chase partnered with Lyft City when it updated Sapphire Reserve.

"In an ideal scenario, it’s a win, win, win,” Ewen said. “It’s a win for the card issuer because they're getting additional spending, it's a win for their partner, because maybe that person has never shopped at Lululemon before and [a win for the consumer who] is now going to shop at Lululemon because there's a benefit on their card."

David Shipper, a strategic advisor at Datos Insights, noted the annual fee is just one revenue stream card issuers tap into.

"Every time you use the card, the bank makes, on a premium card, maybe 2% of that transaction," he said. "So they're making money as you use that card too."

Calculating your card’s value

Here's the uncomfortable truth: these cards can still deliver significant value — if you actually use the benefits. Otherwise, paying the annual fees is basically throwing money away.

"Look at real value, not the value that a card issuer says that you're going to get,” Ewen said. “It is a numbers exercise if this card is actually going to give [you] real value.”

That means focusing on benefits that put actual money back in your wallet, not things you'll buy just because there's now a credit for them, he added.

Take the AmEx Platinum. If you already spend $15 monthly on Uber, subscribe to YouTube TV or Disney Plus/Hulu, and dine quarterly at Resy restaurants (spending at least $100), you've covered the $895 fee with just those three perks, Ewen said. Everything else — lounge access, hotel credits, the Lululemon benefit — becomes bonus value.

"Between just the Resy, Uber and digital entertainment credit on the Platinum, you're already at over $895," Ewen said. "So three perks alone with a dollar value associated with it, you have already covered the annual fee, and then everything else on the card [...] all that just becomes gravy."

Shipper, who carries four fee-based cards himself, approaches it similarly. For frequent travelers, airport lounge access alone can justify premium fees, he pointed out.

"You could start to add things up, and it starts to make sense,” Shipper said. “If you travel and you're spending three hours in an airport and you go to the lounge, your food is free, your drinks are free and you have a nice, comfortable place to sit."

Read the fine print, consider alternatives

Before you rationalize that steeper annual fee, understand the fine print, experts say. Benefits like travel insurance and cell phone protection only apply when you use that specific card for said purchases. Credits often take a week or more to process, and you'll forfeit them if you close your account before they post.

Points values can change, though issuers rarely make drastic cuts, or else customers would likely bail. Still, redemption values vary; cash back typically offers lower value per point than travel or gift cards.

And don't ignore interest rates. Even if you always pay in full, life happens and you might have to carry over a balance. As of May 2025, Americans paid an average 22.25% APR on credit cards, according to the latest Federal Reserve data.

If you can’t stomach the higher fees, don't cancel impulsively. Both AmEx and Chase give existing cardholders some runway to enjoy new benefits before the higher fee kicks in. AmEx Platinum holders won't see the $895 charge until their first renewal after Jan. 2, 2026.

When that higher fee does post to your account, you typically have 30 days to cancel and receive a full refund, Ewen said. But canceling your credit card “is the worst possible decision you could make,” he added. Doing so could ding your credit score, impacting your ability to qualify for competitive interest rates if you’re applying for other loans.

Instead, there’s another alternative to breaking up with your credit card.

"Rather than canceling, consider downgrading," Ewen advised. For instance, the Chase Sapphire Preferred ($95 annual fee) or AmEx Gold ($325 annual fee) still offer decent value at lower price points. The best part? You'll keep your account history and credit limit while cutting costs by downgrading to a lower-fee card.

There are also several no-fee credit cards that are a great way to get started if you’re applying for a new account, but beware of other fees (like foreign transaction fees if traveling abroad) that you’ll pay, Ewen said.

It's also worth calling the issuer to see what your options are if a new higher annual fee is a stretch. "If you are spending a lot on one of these cards, issuers are not going to necessarily want to lose your business," Ewen said. Some cardholders have successfully negotiated retention offers, he added, though there's no guarantee — but it’s worth a try.