The news: As annual fees rise and statement credit redemption guidelines tighten, premium cardholders are finding it harder to justify the cost of membership, per The Wall Street Journal.

How we got here: Annual fees are a big part of issuers’ businesses. For example, 75% of American Express’s new global accounts acquired over the quarter were on fee-paying products, per Q2 2026 earnings; card fee net revenues were up 15% YoY to $2.86 billion. 

To justify rising costs, some cardholders tried to maximize statement credits through schemes like buying $75 Lululemon gift cards every quarter. But issuers are cracking down on loopholes, making it that much harder for some consumers to justify the cost of the cards.

Implication for issuers: High fees and strict redemption make it harder for less affluent members to justify retaining their premium cards—but that’s by design.

As less committed cardholders downgrade to lower-tier cards, issues like overcrowding in airport lounges—a major dissatisfaction point—resolve themselves without deploying any new resources.

At the same time, those higher fees keep the affluent, committed cardholders solidly within issuers’ rewards network—who are more likely to put as many transactions as possible on that card to justify the expense and maximize the rewards.

However, there may be a breaking point for rewards psychology if this trend continues. Issuers that are leaning into acquiring Gen Zers and millennials may end up pricing out young professionals headed toward high-paying futures. Issuers need to create attractive mid-tier cards to develop lifetime customer loyalty—otherwise, they could work their way through a competitor’s card tiers instead.

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