American Express: Millennial, Gen Z Card Spend Up Nearly 50%

For American Express, no consumer spending slowdown is in sight.

Second-quarter earnings results the payments giant reported Friday (July 22) reflect a continued surge in use of credit to conduct everyday commerce, and younger consumers, especially, are proving to be resilient as they shop online and in store.

American Express said billed business — the dollar amount of all charges on its cards — was up 30%.

The company also added 3.2 million proprietary cards in the quarter, and during commentary on the conference call, management stated that acquisition of Platinum Gold and Delta co-branded cards were at record highs.

CEO Steve Squeri said that millennial and  Generation Z consumers “are a large part of our existing customer base and our fastest growing age cohort making up 60% of all new consumer card members we’re acquiring and around 75% of new us consumer platinum and goal card members.”

Spending from that cohort was up 48% year on year, outpacing other generations, led in part by the continued growth of eCommerce and the digitization of payments.

Generally speaking, Squeri said on the call, there’s a “long runway for growth” for spending on the part of younger cardholders.

And average cardholder spending year to date through the second quarter of 2022 is up 19% to about $18,200.

Travel Rebound

As has been seen across payment networks in recent quarters, travel and entertainment remain significant verticals where the spending rebound has been most pronounced, and where spending in those categories eclipsed pre-pandemic levels beginning in April of this year.

“It was at 108% of 2019 levels in the quarter,” said Squeri, with a notable tailwind from corporate travel.

However, economic volatility reigns and like other financial services firms, Amex is boosting its provisions for possible loan losses. The company disclosed in supplemental materials that its provision for credit losses stood at $410 million for the quarter, where the release last year had been a benefit of $606 million in the same period last year.

CFO Jeff Campbell noted that spending on goods and services, overall was up 18%, but added that “we expect that our year over year growth rates will moderate as we progress through the rest of 2022.”

But for now, and in evidence of growth, as disclosed in the company’s filings, U.S. consumer volumes were up 27% year on year, international consumer volumes gained 42%, and U.S small and medium-sized business (SMB) volumes swelled by 23%.

And in commentary on B2B initiatives, management noted on the call that 80% of SMB spending is on B2B and the automation of that spending continues to be a “long term play.”