Episode summary
Amex Earnings Top Estimates as Platinum Card Demand Surges | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Ben Elliott, Keith Naughton, Rosalind Brewer, Janet Lorin
Summary
American Express’ latest quarter centered on the rollout of its revamped Platinum card, which the analyst said is pulling in strong demand despite a much higher annual fee of $895. The analyst argued that the fee increase should lag the expense hit from richer perks, but over one to two years the higher revenue should more than offset those costs. He also said Amex has an inherent advantage over competitors like Chase because it captures both the card fee and the network swipe fee, while millennials and Gen Z are driving much of the new demand.
The conversation then turned to consumer credit, where the auto reporter said car loans have become the riskiest consumer credit product after delinquencies rose more than 50% over 15 years. He pointed to the average new car price topping $50,000, used-car prices near $30,000, and an average car age above 12 years as signs of worsening affordability. Even so, he said lenders and automakers still see room to push higher-margin vehicles, while some efforts to revive cheaper models have yet to gain traction.
Finally, the higher education discussion focused on Arthur Blank’s $50 million gift to four Atlanta HBCUs. The guest said the money will help Pell-eligible students bridge small funding gaps that often determine whether they finish college, while the interim president argued universities need stronger business discipline, more monetization of programs, and better partnerships.
Key takeaways
- The analyst said American Express’ refreshed Platinum card is drawing about two times as many applications and new card accounts after the fee increase.
- The analyst argued Amex’s network ownership gives it a structural edge because it earns both card fees and swipe fees.
- The auto reporter said car-loan delinquencies have risen more than 50% over 15 years, making auto loans the riskiest consumer credit product.
- The auto reporter said the average new car price has topped $50,000 and the average used car is near $30,000, squeezing mainstream buyers.
- The guest said Arthur Blank’s $50 million HBCU gift is aimed at small grants that can help Pell-eligible students reach graduation.
Notable quotes
“MX says that they're getting two times as many applications and and new card accounts after the refresh”
“the fee sort of advertises in over a year or two. Um but but the growth engine is still there”
“car loans actually the riskiest um consumer credit product uh out there u more so than mortgages, credit cards, and personal loans”
“the average price of a car of a new car is topping $50,000 for the first time”
“And so when you think about that, that's sometimes a non-starter”
How the episode opens
Bloomberg Audio Studios podcasts radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube.
We had some earnings. had American Express and some numbers out there and bringing together the or bringing to the forefront just this whole the credit card business which is such a competitive business in terms of fees and service the premium card space. Exactly.
And kind of what services they provide you. I know people are really aggressive uh in in kind of managing the points uh and really trying to take advantage of that. Ben Elliot, Bloomberg Intelligence, consumer finance analyst.
Uh Ben, talk to us about American Express uh the numbers that they reported today. what did you see and what are some of the takeaways?
So, I think what really jumped out to me today is the their their new platinum card product which um you know made a bunch of headlines for raising the fee. It's like 900 bucks a year now. Uh is getting great traction amongst millennials and Gen Z.
Um MX says that they're getting two times as many applications and and new card accounts after the refresh. So, how that translates to MX's earnings? um you know, you see their expenses go up right away because people get all these new benefits, um all these new credits that they have access to with the new card.
Um but the fee sort of advertises in over a year or two. Um but but the growth engine is still there. People are still clamoring for this card.
Um and the business is is really um sustaining an incredible level of growth.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amex earnings
- platinum card demand
- auto loan delinquencies
- car prices
- family foundation college funding
Companies and tickers mentioned
- AXP
- American Express
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Intelligence
-
Instant Reaction: Nvidia CEO Jensen Huang Ousted by Nvidia Board | Bloomberg Intelligence -
Nvidia’s Huang Ousted by Board in Move That Roils AI Economy | Bloomberg Intelligence -
CoreWeave Shares Soar After AI Computing Firm Eases Debt Fears | Bloomberg Intelligence -
Anthropic Targets $1.4 Trillion Valuation in Blockbuster IPO | Bloomberg Intelligence -
Nvidia Probe Into CEO Affair Raises Thorny Questions for AI | Bloomberg Intelligence -
Election 'Blue Wave' & Your Wallet; Navigating AI-Driven Market Volatility | Bloomberg Intelligence
Bloomberg Intelligence, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
