American Express profits surge 16% in Q3, driven by wealthy card members

NEW YORK (AP) — Credit card giant American Express posted a 16% jump in third-quarter profits on Friday, helped by increased card spending, particularly among its wealthiest card members. The company raised its full-year profit forecasts as a result.

The New York-based company said it earned $2.9 billion in the quarter, up 16% from $2.51 billion in the same period a year earlier. On a per-share basis, the company earned $4.14, compared to $3.49 a year earlier. The results beat analysts’ expectations.

Once again, AmEx benefited from increased spending on its cards across all its products in the quarter. The company last month refreshed its iconic Platinum Card, increasing the perks and rewards earned on the card but also increasing the annual fee to $895.

The high net worth credit card market has become a hotbed of competition, particularly this summer and fall when the major credit card companies launched new products or refreshed existing cards in order to entice customers to spend on their products. JPMorgan Chase revamped the Chase Sapphire Reserve Card in June, and Citigroup launched Citi Strata in September.

AmEx shared data with investors that indicate customers were not turned off by the higher annual fee and increased competition from new products. The company got 500,000 requests from customers to convert their card to the new mirrored finish in three weeks, which company executives expected to get 500,000 requests by year-end.

“The initial customer demand and engagement exceeded our expectations, with new U.S. Platinum account acquisitions doubling compared to pre-refresh levels,” said Steve Squeri, CEO and chairman, in a statement.

Average spend on AmEx cards in the quarter was $6,387, the company said, up 5% from a year earlier. Card members continue to increasingly carry a balance on their cards as well, with the company now reporting $138.95 billion in loans, up 8% from a year earlier.

American Express now expects to post earnings per share of $15.20 to $15.50 for the full year.