Amex says 70% of its new credit card customers pay annual fees

Annual fees aren’t scaring customers away from American Express Co.’s credit cards.

Roughly 70% of cardholders the lender added in the second quarter have premium, fee-paying cards, Chief Financial Officer Jeff Campbell told investors at a conference Tuesday in New York.

“Nobody else in the industry really has value propositions that attract people that are willing to pay significant fees,” Campbell said at the conference, hosted by Barclays Plc. “That tends to give card members an attachment to the brand and product that I would suggest is very helpful to us in all economic environments, including a downturn.”

Net card fees climbed 15% to $1.93 billion in the first half of the year, American Express said in July. The company has been adding new rewards to some of its popular premium cards and building out its network of airport lounges. The lender increased the annual fee on its platinum card to $550 in 2017, while adding $200 in annual Uber credits.

Campbell said the company also has benefited from a move to tighten credit standards last year, a change made after seeing a “greater potential for a more significant downturn.” American Express now expects provisions to climb by a percentage lower than 20% this year, compared with a previous forecast in the mid-20% range.