American Express Posts 8 Percent Growth in U.S. Cards
American Express cardholders in the United States spent 8 percent more on their credit cards in the third quarter versus a year ago, according to the company’s quarterly reports.
Globally, American Express showed a 6 percent increase in card purchases in the third quarter, from $4.1 billion from $3.8 billion.
The company, the largest credit card company in terms of purchases, accounts for 25 percent of spending in credit cards last year, according to the Nilson Report.
American Express posted an overall profit of $1.25 billion in the third quarter, a 1.2 percent increase over last year’s level of $1.24 billion.
“We generated solid results this quarter against the backdrop of a very uneven global economy,” said Chairman and Chief Executive Kenneth Chenault in a statement.
He acknowledged that overall card spending by American Express customers “represents slower growth than we were generating earlier in the year.”
American Express had some noteworthy activity in their card business during this past quarter.
The company joined Walmart to enter the booming prepaid card market with a low-fee card aimed at consumers who are disillusioned or excluded by the rising costs of banking services. The card named Bluebird is positioned as an alternative to debit and checking accounts. With this card, American Express is expanding beyond its traditional affluent cardholder.
On the legal front, American Express will have to pay $112.5 million in fines and refunds to settle regulators’ accusations that the company violated a number of consumer protection laws. It will pay $85 million to customers and pay $27.5 million in civil penalties.