American Has A 10 Billion Plan For Its Credit Card—But Still Needs You To Spend On It

American raised its premium Citi credit card’s annual fee to $695, added more credits and status benefits, and made buying comparable lounge membership without the card much more expensive. That makes more sense when you understand what American and Citi are trying to build together. American wants annual cash payments from its credit card and other loyalty partners to approach $10 billion. Selling more miles is part of that. Getting customers to choose American, acquire a Citi card, keep it, and actually use it are all connected. Citi’s latest earnings offer a revealing look at the economics. Sometimes paying partners more is the consequence of a bank’s credit card business performing better. What Citi Just Disclosed On its October 13 earnings call, Citi reported flat revenue in U.S. Consumer Cards. Net interest revenue rose 6%, while noninterest revenue fell 62%, reflecting increased partner payment accruals and rewards costs, partly offset by higher interchange and annual fees. That’s a net revenue measure after these deductions. It doesn’t mean customers stopped using their cards, in fact general purpose card spending rose 13%, with comparisons also benefiting from the Barclays American portfolio acquired in April. Citi explained they have “profit-sharing agreements with some of our partners.” Better credit loss performance means sharing some of the benefit. Citi still comes out ahead, since it retains part of the improvement. He didn’t name American in that answer, but the American deal is now a joint venture. American’s Deal Is About Growing A Business Together I previously reported hearing American’s new Citi arrangement described as a joint venture. That’s a useful way to understand the commercial relationship, rather than thinking of American solely as a vendor selling miles to a bank. They’ve moved to a model similar to how the American Express-Delta deal works (United is locked into their legacy Chase agreement through 2029 – a deal they extended in February 2020). A bank earning interchange, annual fees and interest also incurs funding costs, credit losses, acquisition expenses and the cost of rewards. A profit-sharing arrangement can give its partner a stake in the result after agreed costs, beyond simply being paid for each mile issued. The airline’s financial interest can now extend to how the card portfolio performs, even when the number of miles issued hasn’t changed. At a Morgan Stanley conference in September 2025, American’s Vice Chair Steve Johnson said the negotiations focused on growing cardmembership, spending, and the opportunities to earn and redeem rewards. The last time they did a deal, they pitted two bank partners against each other to maximize revenue. This time they made the relatinship with Citi exclusive. They added ThankYou transfers. Citi’s own products gained Admirals Club passes (and the lounges are now cobranded with Citi). What American’s Numbers Show The December 2024 announcement filed with the SEC projected roughly 10% annual growth in cash remuneration from credit card and other partners. As payments approached $10 billion annually, American expected about $1.5 billion more annual pretax income than in 2024. We have some actual results now: American reported 8% growth in second-quarter cobrand spending which trailed the broader industry, a function I think of their geographic areas of strength and weakness. Its second-quarter filing shows $1.8 billion in cash from credit card and other partners, versus $1.4 billion a year earlier. First half payments were $4.7 billion versus $3.2 billion, but included a one-time payment tied to a partner agreement extension announced in 2025 so you can’t double the first half figure to give a run rate. The Executive Card Makes More Sense In This Context The Executive card refresh I covered in August increased the fee from $595 to $695. Meanwhile, full standalone Admirals Club membership rose to $1,200–$1,400 depending on status. American made the card the obvious choice for many customers who want lounge membership. The new benefits include up to $500 annually in American Airlines Vacations credits, split into two $250 periods; up to $100 in inflight and eligible lounge purchase credits; 12 miles per dollar on eligible AAdvantage Hotels and Cars bookings; and additional Loyalty Point bonuses. These benefits serve different purposes. Lounge access encourages you to keep paying the fee. Vacation credits encourage bookings through American. Hotel rewards encourage both booking through American and paying with Citi. Status bonuses make the broader AAdvantage program more attractive. The refresh improved the card’s value for me, but it still earns just one mile per dollar on most purchases. And its Loyalty Point milestone bonuses don’t require that those qualifying points come from spending on this card. So I can keep it for the lounge access and status benefits while putting most spending elsewhere. The Business Card Survey Tries To Address That In January, I covered a proposed $150 business card refresh. Its most interesting feature was making spending by an authorized user earn Loyalty Points for both that person and the primary cardmember (making the current ‘promotion’ a permanent feature of the card). The proposal also offered 4,000 Loyalty Points after four qualifying American flights, up to three times annually, plus credits and a flight discount replacing the companion certificate. That gives a business owner and an employee—or two spouses—a reason to direct spending to the same account. It gives cardmembers a reason to keep flying American. The Regular Consumer Card Is Still Waiting The broad refresh of the Citi AAdvantage Platinum Select dates back to 2018. I covered it at the time: double miles at restaurants and gas stations, plus a $100 flight discount after $20,000 in annual spending and renewal. In May 2019, the discount increased to $125 while the 10% rebate on redeemed miles disappeared. Loyalty Points later changed the value of card spending across AAdvantage. And Globe added another consumer product. Eight years later, it still illustrates the problem I identified then: a card can be worthwhile for its initial bonus, checked bags and boarding benefits without being useful for spend. You might accept lower earning in exchange for credit towards AAdvantage status, but it’s an expensive price to pay. American now has more to gain from a customer moving $30,000 of annual spending onto a Citi card than when the customer just leaves it in a drawer. But the Executive card refresh – while delivering more value to cardmembers – shows they haven’t solved how to incentivize that spending yet. My expectation that will be that the upcoming refreshes don’t do that either. Topics on this page