{"id":20769,"date":"2025-07-19T05:36:04","date_gmt":"2025-07-19T05:36:04","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/20769\/"},"modified":"2025-07-19T05:36:04","modified_gmt":"2025-07-19T05:36:04","slug":"american-express-just-offered-a-peek-inside-how-wealthy-americans-are-doing-theyre-thriving-even-the-gen-z-members","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/20769\/","title":{"rendered":"American Express just offered a peek inside how wealthy Americans are doing\u2014they’re thriving, even the Gen Z members"},"content":{"rendered":"

When American Express<\/a> unveiled its second-quarter 2025 results<\/a> on Friday, it didn\u2019t just announce another round of record-breaking earnings. It offered a rare, high-definition snapshot of how affluent Americans, the premium cardholders at the heart of its business, are faring in a constantly shifting economic landscape. The short answer? Quite well, really.<\/p>\n

American Express reported\u00a0record quarterly revenue of $17.9 billion, up 9% year-over-year, as well as total Card Member spending that surged 7% over the same period in 2024 to a new high of\u00a0$416.3 billion. The company\u2019s business model, which heavily skews toward a more affluent customer base<\/a>, renders these numbers a kind of barometer for upper-income Americans\u2019 financial confidence and willingness to spend. <\/p>\n

Not only are these card members spending more, but they\u2019re also showing a renewed appetite for premium products and experiences. Critics<\/a> have long claimed the \u201cpremium card<\/a>\u201d phenomenon to be cyclical<\/a> or overhyped<\/a>, but American Express is plowing forward with more bells and whistles for its affluent customers. <\/p>\n

This leads to a significant caveat:\u00a0expenses rose 14%\u00a0year-over-year, as the company reinvested in technology and expanded risk management. It also cited \u201chigher variable customer engagement costs driven by increased Card Member spending and usage of travel-related benefits,\u201d meaning that the bells and whistles that come with the premium cards are so enticing they\u2019re chipping away at Amex\u2019s margin somewhat. Still, the card issuer reaffirmed its outlook\u00a08%\u201310% revenue growth\u00a0and\u00a0full-year earnings per share of $15-$15.50.<\/p>\n

On the conference call with analysts<\/a> after the release of its earnings, company management dug into this dynamic, with momentum especially strong among millennials and Gen Z who are embracing the brand\u2019s luxury value proposition. They want what the premium cards offer, in other words.<\/p>\n

Despite strong earnings, the share price, which hit a record high earlier in the month, fell 2.6% in afternoon trading. Truist Securities analyst Brian Foran commented in a research note<\/a> that \u201csome investors have moved to a \u2018being good is not good enough\u2019 mindset.\u201d It also suggests that all the perks that come with these premium cards may be attractive for members, but the rising cost of servicing them has the Street worried about how much Amex is betting on its affluent customer base.<\/p>\n

Trends in generational wealth<\/p>\n

Millennial spending rose 10%, while Gen Z cardholders grew their spend at a somewhat astonishing 40% (albeit from a smaller base). This generational shift bodes well for the premium space: not only older, established wealth but younger, upwardly mobile clients are embracing the brand\u2019s luxury value proposition.<\/p>\n

And these new members seem to be using their cards\u2014a lot. Net card fees rocketed up 20% year-over-year (FX-adjusted), reinforcing that more users are opting into premium experiences. Card fee revenues have more than doubled since 2019, with recent refreshes on Gold, Delta, and Hilton<\/a> cards spurring double-digit account growth and 98% retention. CFO Christophe Le Caillec said this validates the firms\u2019 strategy of \u201cfirst acquiring new customers onto fee-based products, then driving strong retention of our customer base, and finally, increasing value through product refreshes and pricing accordingly.\u201d<\/p>\n

To this point, the company is preparing a significant refresh of its U.S. Consumer and Business Platinum Cards this fall\u2014bolstering the luxury perks and rewards that millionaire millennials and aspiring Gen Zers crave. Also, the launch of the new Coinbase<\/a> One Card on the Amex network adds a crypto-forward wrinkle, aimed at younger, high-earning professionals seeking digital assets. Amex is confident it has a \u201clong runway for growth\u201d as the premium segment continues to expand.<\/p>\n

Credit performance \u2018best in class\u2019<\/p>\n

Spending is robust, but so is the financial health of Amex\u2019s clientele. The company boasted the\u00a0lowest projected credit card loss rate\u00a0and the\u00a0highest projected return on assets\u00a0in the Federal Reserve\u2019s 2025 stress tests\u2014a testament to the resilience and stability of its cardholders even in theoretical economic downturns.<\/p>\n

For the second quarter, Amex\u2019s\u00a0net write-off rate inched lower to 2.0%\u00a0(from 2.1% a year ago), meaning bad debts that are uncollectible. It also said overall credit performance remains \u201cbest in class.\u201d These are other ways of saying that the overwhelming majority of customers are not only spending\u2014they\u2019re also reliably paying their bills.<\/p>\n

This goes for the younger card members, too. Lakayak noted on the call that the delinquency rates for U. S. millennial and Gen Z customers aren\u2019t just better than the industry average for those age groups, but they\u2019re also \u201cnearly 40% better than the industry average for older age groups.\u201d<\/p>\n

Comments on the call also extended to the fact that the premium American Express card is offering too much of a good thing, as its airport lounges deal with access and overcrowding issues. There are just too many affluent cardholders who want the lounge experience before they fly. \u201cWe\u2019re trying to make the lounges bigger,\u201d CEO Steve Squeri said in response to a question from an analyst. He also said they have to get \u201cinnovative\u201d because the lounges are just so popular, citing a \u201csidecar\u201d arrangement they used in the Las Vegas airport, \u201cwhich is a more of a small kind of, I don\u2019t know, maybe call it a speakeasy kind of of lounge, where if you just want to go in for a quick drink or grab something quickly, you can do that.\u201d<\/p>\n

The record revenue\u2014and climbing expenses\u2014indicate this will be popular for some time to come. A long runway, indeed.<\/p>\n

American Express declined to comment.<\/p>\n

Correction: This article was updated to correct the spelling, attributable to human error, of American Express\u2019 CFO last name, which is Le Caillec.<\/p>\n

For this story,\u00a0Fortune\u00a0used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"When American Express unveiled its second-quarter 2025 results on Friday, it didn\u2019t just announce another round of record-breaking…\n","protected":false},"author":2,"featured_media":20770,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[12468,28,8084,5411,153,6069],"class_list":{"0":"post-20769","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-american-express","9":"tag-business","10":"tag-earnings","11":"tag-fortune-intelligence","12":"tag-gen-z","13":"tag-millennials"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/20769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=20769"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/20769\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/20770"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=20769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=20769"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=20769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}