AmEx spending picked up at year-end, thanks to younger cardholders

American Express Wealthy cardholders were comfortable spending more freely at the end of last year, Chief Financial Officer Christophe Le Caillec he told CNBC.

Spending on AmEx cards jumped 8% year over year in the fourth quarter after slowing from a 7% growth rate earlier in the year to 6% during the second and third quarters, according to the firm. gain presentation

While the year-end pickup was seen across all customer segments and geographies, it was mostly fueled by millennials and Gen Z users, where transaction volumes jumped 16%, up from 12% in the third trimester.

Older groups were more restricted with their cards; Gen X customers spent 7% more in the fourth quarter, while baby boomers saw their bills rise just 4%.

“We had very strong growth from Gen Z and millennials, and that acceleration of 2 percentage points gives us a lot of optimism for 2025,” said Le Caillec.

High transaction levels continued in the first three weeks of this year, he added.

It is said that young Americans spend more on experiences than on goods, and this is reflected in the results of AmEx, which together with the issuer of rival cards. JPMorgan Chase dominates the high-end credit card market.

The travel and entertainment bill increased 11% in the quarter, compared with 8% for goods and services. The increase in travel came from airline spending, which rose 13%, with spending on business class and first class air tickets up 19%, according to Le Caillec.

Shares of AmEx fell more than 2% in midday trading Friday after the company reported earnings and revenue that were roughly in line with analyst expectations. The New York company’s shares have been on a tear over the past year, hitting a 52-week high on Thursday.

“We are encouraged by the acceleration in billings growth because we believe it will be a key factor for Amex to meet its aspirational goal of at least 10% revenue growth,” analyst William Blair led by Christopher Kennedy wrote on Friday in a research note. “We are buyers in every pullback.”