**American Express Reports 12% Increase in Fourth-Quarter Profit Amid Strong Holiday Spending**

American Express announced a 12% increase in its fourth-quarter profit, driven by heightened consumer spending during the holiday season, particularly in travel and online shopping. The favorable holiday performance, coupled with a declining interest rate environment, enabled AmEx to maintain robust spending volumes. Catering primarily to affluent consumers, AmEx has managed to navigate economic uncertainties more effectively than some competitors, as higher-income individuals tend to be less affected by inflation and rising borrowing costs.

In the fourth quarter, billed business—a key indicator of spending on AmEx cards—rose by 8% to $408.4 billion compared to the previous year. The company’s profit climbed to $2.17 billion, or $3.04 per share, for the three months ending December 31, up from $1.93 billion, or $2.62 per share, a year earlier. CEO Stephen Squeri noted, “We exited the year with increased momentum, with billings growth accelerating to 8 percent in the fourth quarter, driven by stronger spending from our consumer and commercial customers during the holiday season.”

AmEx’s provisions for credit losses decreased to $1.3 billion in the quarter, down from $1.4 billion a year prior. A resilient economy and a series of interest rate cuts by the Federal Reserve have alleviated concerns regarding credit quality. The company’s focus on affluent consumers has also allowed it to reduce loan loss provisions compared to peers that serve a wider customer base.

Based in New York, AmEx reported a 9% increase in revenue, reaching $17.18 billion. Smaller competitors, such as Capital One Financial and Discover Financial Services, also exceeded market expectations for quarterly profits this week, benefiting from strong consumer spending. In 2024, AmEx shares surged by 58.4%, significantly outperforming rivals Mastercard and Visa, which saw gains of 23.5% and 21.4%, respectively.