JPMorgan Chase and American Express kick their luxury credit card rivalry up a notch

JPMorgan Chase and American Express will launch new high-end credit cards later this year, giving consumers the luxury of choice.

The Sapphire Reserve card from JPMorgan Chase debuted in 2016 and quickly became popular for its dining and travel rewards program, especially among millennials. It was a bit too popular, actually: costing the bank $200 million in the final quarter of that year and straining relations with airlines. In response, the bank cut back on some of the perks.

American Express, who pioneered the field by introducing its gold card almost 60 years ago, also announced on Monday that they were instituting major changes to their consumer and business platinum cards, claiming it will be “its largest investment ever in a card refresh,” and telling CNBC that it will offer “a whole bunch of new and exciting benefits and value that will far, far, far exceed the annual fee.”

Sapphire Reserve currently costs $550 a year plus $75 per user associated with the card. American Express Platinum costs $800 a year plus $250 for additional cards. Both cards are expected to raise their fees when new benefits are rolled out this fall. 

Credit-card rewards programs have been immensely popular with younger consumers over the last decade. However, those same consumers are now facing a new credit crunch: the federal government is now cracking down on missed student-loan payments after a five-year pause.

The timing is especially challenging for younger borrowers. Unemployment among college graduates ages 20 to 24 has risen to 6.6%, the highest level in a decade outside of the pandemic. New graduates face stiff competitions for jobs, with many entry-level jobs now requiring years of experience. Even retail and restaurant jobs can be hard to come by. 

Combined with proposed cuts to federal student aid in President Donald Trump’s broader budget plan, the resumption of collections signals a new era of aggressive enforcement — and growing financial strain for borrowers across the country. 

Marketing a high-end credit card to that crowd might be a tough sell.

—Catherine Baab contributed to this article.