There’s always been something elitist about whipping out an American Express card. For one, they often come with an annual fee that can feel hefty for many Americans—and they’ve also long been associated with travel perks that only made sense for the well-off. Plus, Amex wasn’t always accepted everywhere due to its transaction fees. This consumer profile most closely resonated with baby boomers and older generations.
But now, Gen Zers are clamoring to get their hands on that shiny gold plastic. Indeed, this generation, along with millennials, accounted for 75% of new consumer platinum and consumer gold accounts in 2023, Howard Grosfield, president of U.S. consumer services at American Express, tells Fortune.
“Amex is becoming the card for an entirely new generation,” Grosfield says. “Our premium products and membership model resonate with high-credit quality, high-spending younger customers, which means we capture a longer relationship over their lifetime and grow with them into their peak spending years.”
It may seem surprising that younger generations facing high inflation, student loans, and high housing costs would go for a card they have to pay for. (A platinum Amex card comes with an annual fee of $695). But millennials and Gen Zers are indeed willing to shell out for a card that comes with “lifestyle” perks that go beyond just travel points. The platinum card comes with entertainment credits to subscribe to platforms such as Hulu and The New York Times, as well as Uber cash, airport lounge access, and even credit to shop at Saks. A platinum card offers $1,500 in value per year relative to its yearly fee, according to Amex.
“Until about 10 to 15 years ago, we thought that no-fee cards were the entry point to bring in younger customers to the franchise,” Grosfield says. “We’ve learned that that’s not the right strategy for millennials and Gen Zs. They like the brand affiliation. They like to travel and eat out, and they like the special access and experiences that come with our premium cards.”
It also helps that more merchants are accepting Amex than in the past, helping the card shed its occasional reputation as fussy or elitist.. While Amex has long offered more-generous perks than other cards, the flipside is its relative priciness for merchants meant it wasn’t accepted everywhere. Competitor Visa had great success trolling Amex with its 20-year “It’s Everywhere You Want to Be” advertising campaign.
However, that’s now shifted as the number of locations globally that accept American Express cards has more than tripled since 2017, a company spokesperson tells Fortune. “Nearly 18 million stores and vendors accept Amex here in the U.S., as we maintain 99% parity coverage with other credit card networks,” Amex tells Fortune.
Stil, the fee fights aren’t over, as one major e-commerce company will stop accepting Amex this summer: eBay. The e-commerce platform will drop Amex payments in August, citing “unacceptably high fees.” (Amex’s spokesperson says they are “disappointed” in the decision, which “will limit customers’ payment choices.” They add, “Our research tells us that in the U.S. the cost of acceptance for American Express is comparable to what eBay pays for similar cards on other networks.)
Not just anyone has an Amex
While American Express has undoubtedly seen a wave of new, young customers, it doesn’t mean they’re shying away from their high-income or high-quality clientele. Amex customers still have “super prime FICOs and credit quality that outperforms their industry peers,” Grosfield says. Plus, the average income of U.S. millennial and Gen Z customers is about 70% higher than the average income of those customers across the industry, an American Express spokesperson tells Fortune.
Their average 18-24 year old customer has a 679 credit score, while 25-40 year olds have a 686 average credit score, according to American Express. When looking at the entire credit card industry, Gen Zers have an average credit score of 665, according to VantageScore CreditGauge.
It’s also important to recognize that the annual fee of the card isn’t sustainable for everyone, and that fees on competitors’ cards could fluctuate as these travel and lifestyle cards become even more popular. Even still, Gen Z is attracted to a luxury lifestyle—even if they can’t afford it.
Amex “traditionally symbolized stability, coined for the older, affluent bunch,” says
Gloria Garcia Cisneros, a Gen Z wealth manager for LourdMurray. Gen Z’s interest in the “card is more so because of the change in value proposition from AmEx. They are framing themselves in a new light and Gen Z doesn’t like to miss out on the newest and hottest trends.”
Gen Z also loves a ‘good life hack’
While Amex has long been popular among the wealthy who collect travel points like no other, Gen Zers enjoy the perks of the card beyond flight and hotel points. With a more diversified set of perks, Gen Zers see the card as a way to get the most bang for their buck.
Gen Z “loves a good life hack,” Gabriela Serpa Royo, a senior cultural analyst at consumer insights agency Canvas8, tells Fortune. To them, “credit card perks are even better than credit, because it computes in the brain as free money.”
Indeed, Gen Z is more engaged with the Amex benefits—including travel, dining, and special-access events—than older generations, Grosfield says. Amex users also have access to online education regarding budgeting, saving, retirement planning, owning a home, and building good credit. These factors all spell hope for a “long runway for growth from millennial and Gen Z customers,” Grosfield says.
Bottom line is, though, that Gen Z is always looking for a deal. Indeed, the “growing love for credit card perks isn’t dissimilar to the explosion that we’ve been witnessing lately, nor does it stand apart from the rise of” buy-now-pay-later products, Royo says.
“People are looking for deals because they feel like they need more, want more—and also want to appear like they have more—while having, or feeling like they have, less,” Royo says.
