Question

Bank of America's annual fees are typically $90, while American Express (AMEX) users pay $120. Generally,...

Bank of America's annual fees are typically $90, while American Express (AMEX) users pay $120. Generally, a generic credit cards' fees are $70.

What is AMEX's Price Premium?

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Answer #1

Compute the AMEX’s price premium, using the equation as shown below:

Price premium = Fees charge by AMEX – General credit card fees

                         = $120 - $70

                         = $50

Hence, AMEX’s price premium is $50.

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