American Express earned $5.42 a share in the third quarter of 2026, up 31 per cent, on revenue of $20.1 billion, up 9 per cent, and raised its full-year earnings forecast, the company said in its third-quarter earnings release on Friday. Strip out a one-off gain and the figure is $4.68, up 13 per cent.
That is a good quarter by any measure the company reports. The more revealing number is not in the headline. Cardholders paid American Express $2.97 billion in annual card fees in the quarter, 16 per cent more than a year earlier, while the amount they charged on their cards rose 8 per cent. The fee is growing twice as fast as the spending it is supposed to unlock.
Where did the extra 74 cents come from?
About 74 cents of the $5.42, by this publication's arithmetic, came from one transaction and one charge, not from cards. American Express sold its equity stake in Global Business Travel Group, the corporate travel management company, and booked a pre-tax gain of $982 million, or $1.11 a share after tax. Management said on the call that it was using part of the gain to fund a $336 million restructuring charge, which cost 37 cents a share after tax. The two items together explain the gap between reported and adjusted earnings.
The restructuring is not small. Management said on the earnings call that the charge is expected to result in the elimination of approximately 5 per cent of the company's positions globally, according to a transcript published by The Motley Fool. The company's Form 10-Q says salaries and benefits rose in the quarter "primarily driven by restructuring costs." The company did not say how many people that covers.
Tax also helped. The effective rate fell to 18.1 per cent from 24.1 per cent, which the release attributes to "discrete tax benefits" from resolving prior-period tax items. Net income rose 28 per cent to $3.7 billion, faster than the 18 per cent rise in pretax income.
Stephen J. Squeri, chairman and chief executive, said in the release that the company is "raising our full-year EPS guidance to between $18.30 and $18.60 ($17.60-$17.90 adjusted)" and is "on track to deliver another year of 10 percent revenue growth."
Why are card fees rising faster than spending?
Mostly because of one product. The refresh of the U.S. Platinum card last year is the main driver the company points to: management linked fee growth to it on the call, according to the transcript, and the 10-Q says the rise in rewards and benefit costs reflected "enhancements we made to the value propositions of our refreshed U.S. Platinum cards last year."
The statistical supplement filed with the results shows the effect card by card. The average annual fee per card was $136 in the third quarter, up from $119 a year earlier and from $122 in the fourth quarter of 2025. Proprietary cards in force grew only 2 per cent, to 87.5 million, so nearly all of the fee growth came from charging each card more, not from issuing more cards.
| Measure (third quarter) | 2026 | 2025 | Change | |---|---|---|---| | Revenue net of interest expense | $20.062 billion | $18.426 billion | up 9% | | Billed business | $454.0 billion | $421.0 billion | up 8% | | Net card fees | $2.969 billion | $2.551 billion | up 16% | | Average fee per card | $136 | $119 | up 14% | | Proprietary cards in force | 87.5 million | 86.0 million | up 2% | | Net write-off rate (consumer and small business, principal) | 1.8% | 1.9% | down |
Source: American Express third-quarter 2026 earnings release and statistical supplement.
Card fees were 14.8 per cent of revenue in the quarter, by our arithmetic, against 13.8 per cent a year earlier. Discount revenue, the fee merchants pay on each transaction and still the largest line, grew 8 per cent, in step with spending.
The customers paying those fees are, so far, still spending. U.S. Consumer Services billed business rose 9 per cent. Travel and entertainment spending, 29 per cent of the total, rose 10 per cent, and goods and services rose 7 per cent. On the call, management put U.S. consumer spending growth at 9.4 per cent and airline spending at 13 per cent, according to the Motley Fool transcript. The company acquired 3.1 million new proprietary cards.
The weak spot is business travel and corporate cards. Commercial Services billed business rose 3 per cent, the slowest of the three card segments and down from 5 per cent in the second quarter.
Is anyone falling behind on payments?
Not at American Express, on its own figures. The consumer and small-business net write-off rate, which counts principal only, fell to 1.8 per cent from 1.9 per cent. Provisions for credit losses fell to $1.0 billion from $1.3 billion because the company released reserves this quarter rather than building them. The credit-loss reserve on card loans fell to $5.63 billion from $6.07 billion a year earlier, even as card balances grew 7 per cent to $221.1 billion. Management said on the call that the quarter's $211 million reserve release was driven by enhancements to its credit-loss models, according to the transcript.
That is a company whose customers are richer than average. It is not evidence about households in general. Lower-income borrowers carry balances on other issuers' cards, and this publication has written before about families putting everyday spending on credit. American Express's results describe the top of that distribution.
Details to note
On 8 October American Express disclosed that it had consented to orders from the Federal Reserve and the Office of the Comptroller of the Currency, the national bank regulator, to resolve reviews of "certain aspects of the Company's financial crimes compliance program." Its bank subsidiary, American Express National Bank, agreed to pay a $350 million civil money penalty to the OCC, part of which had already been reserved. The OCC said deficiencies in the bank's anti-money-laundering program involved inadequate resources, "systemic internal control gaps" and weak independent testing and training. The release says legal reserves rose "for previously-disclosed matters." Management said on the call that the costs of remediation are not expected to affect 2027 guidance, according to the transcript.
Average diluted shares fell 3 per cent to 674 million, which adds to per-share growth independent of profit. The company returned $2.2 billion to shareholders in the quarter, $1.6 billion through buybacks and $0.6 billion in dividends, according to the transcript.
What to watch
The fourth quarter is the first in which the Platinum refresh is in both the current and prior-year figures. The 10-Q says growth in rewards and benefit costs should "moderate next quarter" for that reason, and, in our reading, the same comparison will apply to fees. If average fee per card keeps rising at double digits without a new refresh, cardholders are absorbing price increases on their own. If it flattens to the low single digits, this quarter's fee growth was a one-time step. Management will give 2027 guidance in January.
Sources
- American Express Q3 2026 earnings release (SEC Form 8-K, Exhibit 99.1, 23 October 2026)
- American Express Q3 2026 statistical supplement (SEC Form 8-K, Exhibit 99.2, 23 October 2026)
- American Express Form 10-Q for the quarter ended 30 September 2026
- American Express Form 8-K on Federal Reserve and OCC consent orders, 8 October 2026
- OCC news release 2026-87, 8 October 2026
- Amex (AXP) Q3 2026 earnings call transcript (The Motley Fool, 23 October 2026)
Revenue, earnings, guidance, credit-loss provisions, the write-off rate, the GBTG gain and restructuring charge, and Stephen Squeri's quotations are from American Express's third-quarter 2026 earnings release, filed as Exhibit 99.1 to its Form 8-K on 23 October 2026. Net card fees, average fee per card, billed business by segment, spending categories, cards acquired and reserve balances are from the statistical supplement filed as Exhibit 99.2 the same day. The salaries and Platinum-related expense explanations are from the company's Form 10-Q for the quarter, filed 23 October 2026. The Federal Reserve and OCC consent orders and the $350 million penalty are from the company's Form 8-K of 8 October 2026 and the OCC's announcement the same day. The roughly 5 per cent reduction in positions, the $211 million reserve release, the 9.4 per cent U.S. consumer spending figure, capital returned and management's remarks on fees, remediation costs and 2027 guidance are from a transcript of the earnings call published by The Motley Fool on 23 October 2026, paraphrased. The per-share gain net of charges, the fee share of revenue and the fee-versus-spending comparison are this publication's arithmetic. The analysis is our own.
Topics businessbankingcredit cardsconsumer spendingearnings
