American Express’ affluent cardholders are continuing to spend at a steady pace, with younger customers driving growth in first-quarter transaction volumes, according to Chief Financial Officer Christophe Le Caillec. Billed business on AmEx cards rose 6% in the period, or 7% when adjusted for the impact of the leap year. This indicates that the increase in spending seen late last year has carried over into 2025.
Despite concerns about President Donald Trump’s tariff policies potentially causing a recession, AmEx cardholders have shown resilience in their spending habits. The company’s wealthier customer base seems to be less affected by worries about tariffs and inflation, as evidenced by the positive trends in spending.
In contrast, Synchrony Financial, which offers store cards for various retailers, has warned of a spending slowdown among its customer base. This highlights the difference in consumer behavior between AmEx’s affluent clientele and other credit card holders.
Le Caillec noted that growth at AmEx was driven by younger cardholders, with millennials and Gen Z members spending 14% more in the quarter. In comparison, Gen X and Baby Boomer cardholders showed more caution with 5% and 1% increases, respectively.
The CFO mentioned that it’s unclear whether cardholders are accelerating their purchases due to the looming tariffs, potentially artificially boosting purchase volumes. However, some small businesses may be stocking up on inventory in anticipation of increased costs from the tariffs.
One positive indicator of the strength of AmEx’s cardmember base is the 8% increase in restaurant spending. This discretionary expense reflects the confidence that cardholders have in their financial stability and suggests that the spending trends may be sustainable.
While airline transactions saw a slower growth rate in the first quarter, AmEx remains optimistic about its financial outlook. The company maintained its guidance for revenue growth of 8% to 10% and earnings of $15 to $15.50 per share for the year. However, the company added a new caveat to its guidance, stating that it is subject to the macroeconomic environment.
Overall, AmEx’s performance in the first quarter demonstrates the resilience of its affluent customer base and the company’s ability to weather economic uncertainties. The positive spending trends among younger cardholders and the stability in restaurant spending indicate a strong foundation for future growth.
