Despite Economic Fears American Express Sees Strong New Card Acquisition and Spending Growth

American Express enjoyed strong tailwinds in 2022 as the company’s payment volume benefited from a recovery in travel and entertainment spending (roughly 30% of prepandemic billings) while growing momentum with younger demographics drove record new card acquisitions. American Express generates more than 80% of its revenue through noninterest income, with its largest source of revenue being the discount rate charged to merchants when they accept payments. This means that the level of consumer spending has a direct impact on the company’s revenue while new cardholders drive additional revenue, regardless of borrowing habits.