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The annual fee for most Delta Air Lines-branded credit cards is rising sharply, just months after the airline rolled back controversial changes to its rewards program and made its popular Sky Clubs more exclusive.
The card changes, the first since January 2020, occurred overnight Wednesday and were announced Thursday by American Express.
Kyle Potter, editor of Thrifty Traveler, which first reported the fare increases, was surprised the company would take such a move so soon after the outcry over Delta’s changes to its SkyMiles program that made achieving the status impossible. more difficult.
“Everything they’re doing is to get more money out of you,” Potter said. “They’re trying to make you pay up front and condition you to swipe that Delta credit card over and over again.”
The annual fee for Delta’s lowest-tier gold card went from $99, after a free initial year, to $150. The Delta SkyMiles Platinum American Express used to cost $250 a year, but is now $350. And the annual fee for your Reserve card also increased from $100 to $650.
Patrick Cool of Edina expects to lose Platinum Medallion status under the revised SkyMiles program, even though the company backed away from its original qualifying total of all miles, and will now reconsider whether to keep his reserve card.
“The odds of me getting the top-tier card are probably pretty low, but with the higher fees, I’m not sure any of them are worth having,” he said.
Delta and American Express appear willing to risk losing some cardholders because they have enough demand for the cards and status they unlock with the airline.
“That’s what’s happening here,” said Jay Sorensen, president of Milwaukee-based IdeaWorks, which specializes in frequent flyer programs. “These are signs of a successful portfolio from a demand perspective.”
Branded credit card revenue represents about 10% of airline revenue today in the US, and that’s only growing.
“These programs make the difference between a profit and a loss,” Sorensen said.
However, he sees risks ahead. His message to airlines: Don’t forget that a frequent flyer program should ultimately focus on selling more airline seats.
“Should the credit card be the center of all this? No, because then I think you’ve missed what a loyalty program is all about,” he said.
Last fall, Delta, the dominant airline in Minneapolis-St. Paul International Airport: introduced increased requirements in its SkyMiles loyalty program to obtain elite status and all its benefits. In the span of just over a month, the airline faced customer outrage, admitted it “probably went too far” and ultimately scaled back planned modifications.
The plan, first announced in September, aimed to base status solely on the amount of money travelers spend with the airline or through their branded credit cards, rather than miles flown. Delta had also confirmed that it planned to limit the number of entries to its Sky Club lounges starting February 1, 2025, to premium cardholders only.
Since then, Delta decreased the number of Medallion Qualification Dollars (MQDs) needed to achieve 2025 status, further enhanced the Million Miler program to reward long-term loyalty, increased access to Delta Sky Club for reserve and travel business cardholders Reserve and enhanced options for earning Medallion qualification miles. .
American Express spokeswoman Elizabeth Crosta said the company had planned the changes for two years and also included additional benefits such as cash back on rideshares and restaurants and $2,500 annual Silver Medallion qualifying, halfway to achieving that. top level status.
“We’re trying to create rewards that are meaningful and don’t require cardholders to change their behavior,” he said.