American Express and Costco have outperformed the S&P 500 over the last decade, despite charging annual fees for services that competitors offer for free. Amex keeps attracting new, younger customers and grows card fees, even after increasing annual card costs. Cardholder rewards cost Amex nearly twice as much as it collects in fees, but it makes up the difference through higher merchant fees. Costco, meanwhile, keeps margins low and uses membership fees to maintain customer loyalty, famously holding the hot dog combo at $1.50 for 40 years. Both businesses have strong customer bases, but Amex trades at a far better valuation than Costco. Both remain solid long-term plays, especially for those who value customer loyalty and disciplined management.