American Express reported a notable uptick in cardholder spending during the final quarter of 2024, driven largely by millennials and Gen Z, according to Chief Financial Officer Christophe Le Caillec. This increase marked a shift in consumer behavior, with younger generations leading the charge in spending on experiences like travel and entertainment.
Spending on American Express cards grew by 8% year over year in the fourth quarter, showing a marked improvement from the 6% growth rate recorded during the second and third quarters. The company highlighted this rebound during its earnings presentation, noting that younger users in particular contributed to the surge.
“Younger generations, especially millennials and Gen Z, have exhibited a clear preference for experiences over material goods, which significantly boosted spending at the close of the year,” Le Caillec shared in an interview with CNBC.
Affluent Cardholders Resume Confident Spending
While younger demographics played a pivotal role, American Express also noted that affluent cardholders became more comfortable with discretionary spending late in the year. After a period of caution during mid-2024, this group resumed spending freely, helping to solidify the company’s performance in sectors such as hospitality, dining, and travel.
The rebound comes amidst a challenging economic backdrop where inflation and fluctuating interest rates have affected consumer behavior. Despite these challenges, American Express has maintained its stronghold among high-income users, particularly those seeking premium experiences.
Travel and Entertainment See a Boom
Travel and entertainment emerged as the top categories for millennial and Gen Z cardholders. This trend aligns with broader shifts in consumer priorities, where experiences are increasingly valued over physical goods. Analysts have noted that the post-pandemic era has driven a greater emphasis on making up for lost time, especially among younger consumers.
American Express’ premium offerings, including travel benefits and entertainment perks, have made the company particularly attractive to this demographic. With continued growth in these areas, the company is well-positioned to capture further spending momentum.
Looking Ahead
As the company enters 2025, American Express plans to build on the fourth-quarter momentum by targeting younger consumers and enhancing its travel and experience-focused rewards. Le Caillec expressed optimism about the company’s trajectory, citing a strong pipeline of opportunities in key growth sectors.
The results from late 2024 demonstrate that American Express continues to benefit from its positioning as a premium card provider, particularly as millennials and Gen Z increasingly prioritize lifestyle-oriented spending.