American Express reported an uptick in cardholder spending late last year, driven by millennials and Gen Z customers. In the fourth quarter, spending on AmEx cards grew 8% year-over-year, rebounding from slower growth earlier in the year. The first quarter had seen a 7% increase, while the second and third quarters registered 6% growth. This upward trend brings optimism for continued growth in 2025, according to Chief Financial Officer Christophe Le Caillec.
The 16% transaction volume increase among millennials and Gen Z in the fourth quarter was a significant acceleration from the 12% growth seen in the previous quarter. Meanwhile, spending by older generations grew more moderately. Gen X cardholders increased their spending by 7%, and baby boomers saw a 4% rise in billings.
Elevated transaction volumes have carried over into the early weeks of 2025, reflecting growing consumer confidence and a return to discretionary spending. Younger cardholders, in particular, are prioritizing experiences over material goods. This trend was evident in the breakdown of spending categories: travel and entertainment saw an 11% increase, compared with an 8% rise in goods and services. Airline spending was a notable highlight, growing 13% year-over-year, with a 19% surge in business class and first-class airfare purchases.
American Express, known for its high-end credit card offerings, continues to dominate the premium credit card market alongside its main competitors. The company’s strategic focus on travel and lifestyle benefits appears to resonate strongly with younger consumers, positioning it well for sustained growth in these segments.
Despite strong spending trends, AmEx shares declined by more than 2% following the release of its earnings report, which met analysts’ expectations but didn’t exceed them. However, analysts remain optimistic about the company’s future, emphasizing that accelerating billings growth will play a key role in achieving its long-term revenue targets.
American Express enters 2025 with a robust trajectory, buoyed by strong consumer activity in key segments. The focus on experiences and travel, particularly among younger generations, positions the company to capitalize on shifting consumer preferences in the premium credit card market.
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