American Express launches a new credit card for jet-setters — with a $450 annual fee

American Express has a new idea for keeping the jet set happy.

The company AXP, +0.61%  announced a new card Monday, the Starwood Preferred Guest (SPG) American Express Luxury Card. The card is aimed at American Express’s “most premium and often-traveling, globetrotting” customers, said Courtney Kelso, senior vice president of U.S. commercial cards at American Express. It also comes with a hefty annual fee of $450.

The new card arrives as American Express has faced some pressure from competitors, including the Chase Sapphire Reserve card JPM, -0.08%   and the Citi Prestige Card C, -1.32%

In 2016, American Express had 23% of the U.S. market share by credit-card purchase volume, according to The Wall Street Journal, down from 26% in 2011. It has lost several co-branded cards in its portfolio in recent years, including cards with Costco COST, +3.00%  and JetBlue JBLU, +1.33%

One free hotel stay every year

The new card debuts in August and comes with an annual perk designed to make customers loyal: One free hotel stay at participating SPG and Marriott Rewards MAR, +1.84% hotels on the anniversary of the day the customer opened their account. That one night can be at or under the value of 50,000 points.

It also comes with a $300 statement credit each year, which cardholders can use for any purchases at participating SPG and Marriott Rewards hotels, such as dining, spa treatments and merchandise sold at those properties.

Cardholders automatically get American Express “Gold Elite” status and can earn “Platinum Elite” status if they spend $75,000 on the card in a calendar year.

Global entry or TSA Precheck fees are also included, which cost $100 and $85 respectively. It has no foreign transaction fee.

For every dollar spent, cardholders will get:

• 6X points at participating SPG and Marriott Rewards hotels

• 3X points at U.S. restaurants and on flights booked directly with airlines

• 2X points on other eligible purchases

The new card “underscores how popular the premium card space continues to be,” said Kim Palmer, a credit card expert at the personal-finance company NerdWallet. “For guests who are already loyal to Marriott, the new card could be a good option that includes what are now standard luxury card perks, like Global Entry credit and a $300 statement credit for spending at Marriott properties.”

There are several drawbacks to the new Amex card

For starters, there are no sign-up points bonus, Palmer said. Plus, hotel cards can be limiting when it comes to transferring the points to purchase things outside of those hotel chains. Starwood does have airline partners, but a general travel card could be better for someone who wants more flexibility, she said.

The card also comes with a hefty annual APR of 17.24% to 26.24%, which can add up for cardholders who don’t pay their bill in its entirety. The average variable interest rate on all credit cards is currently 16.87%, according to personal-finance company Bankrate.

New benefits for Starwood Preferred Guest cards

American Express also announced new benefits for its SPG consumer and business cards, which will also premiere in August.

The SPG consumer credit card, which has a $95 annual fee, will also give one free annual night for the cardmember’s anniversary, but it must be worth 35,000 points or fewer. It gives 6X points at participating SPG and Marriott Rewards hotels and 2X points on other eligible purchases.

The SPG business card also comes with a $95 annual fee and offers an annual night award of 35,000 points or fewer.

The SPG business card also offers the following points:

• 4X points on everyday business purchases at U.S. restaurants, U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. shipping purchases

• 6X points at participating SPG and Marriott Rewards hotels

• 2X points on other eligible purchases

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