American Express Reports 16% Growth in Cardmember Spending
In its third quarter financial results reported this afternoon, American Express reported a 16% increase in Amex cardmember spending over the same quarter last year and a 14% increase in discount revenue paid by card accepting merchants. Amex's average discount rate declined 3 basis points from 2.60% to 2.57% as compared to the same quarter last year.
The spending increase reflected higher average cardmember spending, the continued benefit of rewards programs and a net addition of 4 million cards-in-force. The higher business volumes also reflected growth in the retail, everyday spending, travel and entertainment categories. The benefits of higher cardmember spending were partially offset by a slightly lower average discount rate.
Amex also announced it would be prepaying $500 million to Delta Airlines for future purchases of Delta SkyMiles rewards points and would, in addition, be providing a $100 million loan to Delta. Amex said:
The company’s decision to participate in Delta’s restructuring program reflects its long-term partnership with the airline through its travel business, co-branded cards and the Membership Rewards program. While American Express’ Delta SkyMiles Credit Card co-brand portfolio accounts for less than 10 percent of the company’s total worldwide billed business and less than 15 percent of managed worldwide lending receivables, it represents a very attractive, high-spending, loyal cardmember base with excellent credit quality.
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