The annual fee for most Delta Air Lines-branded credit cards is rising considerably, just months after the airline walked back controversial changes to its rewards program and made its popular Sky Clubs more exclusive.
The changes to the cards — the first since January 2020 — happened overnight Wednesday, with American Express announcing them Thursday.
Kyle Potter, editor of Thrifty Traveler, which first reported fee increases, was surprised that the company would take such an action so soon after the outcry over Delta's changes to its SkyMiles program that made attaining status 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 again and again on that Delta credit card."
The annual fee for Delta's lowest-tier gold card went from $99, after an initial free introductory year, to $150. The Delta SkyMiles Platinum American Express used to cost $250 annually but is now $350. And its Reserve card's annual fee also jumped $100 to $650.
Patrick Cool of Edina expects to lose Platinum Medallion status under the revised SkyMiles program — despite the company pulling back from its original all-mileage qualification total — and now will reconsider whether he'll keep his reserve card.
"The odds are probably pretty low that I will stay with the higher-tiered card, but with the increased fees, I'm not sure it will be worth it to have any of them," he said.
Delta and American Express seem willing to risk losing some cardholders because they have enough demand for the cards and the status they unlock with the airline.
"That's what's happening here," said Jay Sorensen, Milwaukee-based president of IdeaWorks, which specializes in frequent flyer programs. "These are signs of a successful portfolio from a demand perspective."
Revenue from branded credit cards make up about 10% of airline revenue now in the U.S., and that's only growing.
"These programs are the difference between a profit and a loss," Sorensen said.
He sees risk ahead, though. His message to airlines: Don't forget that a frequent flyer program should ultimately be about selling more airline seats.
"Should a credit card be at the center of it? No, because then I think you've lost what a loyalty program is about," he said.
Last fall, Delta — the dominant carrier at Minneapolis-St. Paul International Airport — debuted ramped-up requirements in its SkyMiles loyalty program for obtaining elite status and all its perks. In the span of a little more than a month, the airline fielded a siege of customer outrage, admitted it "probably went too far" and ultimately scaled back the planned alterations.
The plan, first announced in September, aimed to base status solely on the amount of money flyers spend with the carrier or via their branded credit cards rather than miles flown. Delta had also confirmed it planned to cap the number of entries to its Sky Club lounges starting Feb. 1, 2025, for premium card holders only.
Since then, Delta decreased the number of Medallion Qualification Dollars (MQDs) required to achieve 2025 status, further enhanced the Million Miler program to reward long-term loyalty, increased Delta Sky Club access for holders of the reserve and reserve business cards and enhanced options for rollover medallion qualification miles.
American Express spokeswoman Elizabeth Crosta said the company had planned the changes for two years and also included additional perks such as rideshare and restaurant money back and 2,500 annually in Silver Medallion qualifying dollars, halfway to achieving that first-tier status.
"We try to create rewards that are meaningful and don't require cardholders to change behavior," she said.