Key Takeaways
- American Express reported a 9% year-on-year revenue increase in Q2 2025, driven by record card member spending and growth in premium card fees.
- The company’s closed-loop network, which acts as both issuer and acquirer, grants it significant pricing power and control over fee structures compared to competitors like Visa and Mastercard.
- Despite regulatory scrutiny and competition, the average fee per card has shown consistent growth, indicating a strong value proposition for its affluent customer base.
- The company reaffirmed its strong outlook for 2025, guiding for revenue growth of 8% to 10% and earnings per share between $15.00 and $15.50.
American Express (AXP) stands as a formidable player in the credit card industry, with a business model that has consistently demonstrated an ability to extract value through fee structures. The company’s capacity to grow revenue per cardholder, even amidst competitive pressures, underscores a robust pricing framework that few peers can replicate. This analysis delves into the factors behind this strength, examining recent financial performance and broader industry trends to assess the sustainability of such a model in 2025 and beyond.
Revenue Growth and Fee Structures
In the second quarter of 2025 (April to June), American Express reported a 9% year-on-year revenue increase, reaching $17.86 billion, driven significantly by fees from premium card products. Full-year 2024 figures showed a similar trend, with revenue up 9% (10% on an FX-adjusted basis) to a record high, alongside earnings per share rising 25% to $14.01. For 2025, the company has guided for revenue growth of 8% to 10%, with earnings per share expected between $15.00 and $15.50. These figures suggest a sustained ability to maintain fee-driven income, even as cardholder spending hit record levels in Q2 2025.
Annual fees on American Express cards vary widely, ranging from $0 to $695 depending on the product tier. Premium offerings, such as the Platinum and Centurion cards, command the higher end of this spectrum, targeting affluent consumers willing to pay for exclusive benefits. This segmented approach allows the company to capture value across diverse customer bases, with fee income forming a critical pillar of its revenue mix. Notably, posts found on platforms like X, including commentary from accounts such as Fiscal.ai, have highlighted the consistent growth in average fees per card, pointing to this as a key indicator of pricing strength.
Industry Context and Competitive Positioning
The credit card industry is a battleground of margins, where interchange fees, annual charges, and interest income are fiercely contested. American Express differentiates itself through a closed-loop network, acting as both issuer and acquirer, which grants greater control over fee structures compared to Visa or Mastercard, who rely on third-party issuers. This model, while limiting merchant acceptance relative to peers, enables a focus on high-spending, creditworthy customers less sensitive to fee increases.
Recent data illustrates this dynamic. In Q2 2025, card member spending reached unprecedented levels, contributing to the revenue surge. Yet, it is the ability to raise fees without significant customer churn that sets American Express apart. For context, historical data from 2020 to 2024 shows a steady uptick in fee income as a percentage of total revenue, a trend that continued into 2025 with a reported 16% year-on-year increase in average fee per card in Q1 (January to March). This suggests not just acceptance, but a willingness among cardholders to absorb higher costs for perceived value.
Sustainability and Risks
While the pricing model appears robust, it is not without challenges. Regulatory scrutiny over credit card fees remains a persistent threat, particularly in a market like the United States, where lawmakers have increasingly questioned the burden on consumers. Additionally, economic downturns could erode spending among even the affluent demographic that American Express targets, potentially impacting fee tolerance. The company’s guidance for 2025 assumes a stable macroeconomic environment, but any deviation could test the limits of its pricing power.
Competition also looms large. Rivals such as Chase and Citi have intensified efforts to capture the premium card market with offerings like the Sapphire Reserve and Prestige cards, often at lower annual fees. While American Express maintains a lead in brand loyalty and rewards perception, sustained fee growth will depend on delivering benefits that justify the cost. The balance between value and price is delicate; overreach could alienate even loyal customers.
Financial Snapshot
The table below summarises key financial metrics for American Express, highlighting the role of fee-driven revenue in recent performance:
| Metric | FY 2024 | Q2 2025 (Apr-Jun) | FY 2025 Guidance |
|---|---|---|---|
| Revenue Growth (YoY) | 9% (10% FX-adjusted) | 9% | 8%-10% |
| Earnings Per Share | $14.01 | $4.08 | $15.00-$15.50 |
| Card Member Spending | – | Record High | – |
Conclusion
American Express has carved out a niche where pricing power is not merely a strategy but a core competency. The ability to grow fees per card, as evidenced by double-digit increases in recent years and strong quarterly performance in 2025, reflects a customer base that values the brand’s offerings enough to overlook rising costs. However, this strength must be continually earned through superior service and rewards, especially as competitors close the gap and external pressures mount. For investors, the question is not whether American Express can charge more, but how long it can do so without tipping the scales. The answer, for now, lies in the delicate dance of value and cost.
References
American Express Company. (2025, January 24). American Express Announces Record FY 2024 Revenue, Up 9%, or 10% on an FX-Adjusted Basis. Retrieved from https://ir.americanexpress.com/news/investor-relations-news/investor-relations-news-details/2025/American-Express-Announces-Record-FY-2024-Revenue-Up-9-or-10-on-an-FX-Adjusted-Basis/default.aspx
Fiscal.ai. (2024, February 13). [Commentary on American Express fee income]. X. Retrieved from https://x.com/fiscal_ai/status/1757519671467954521
Fiscal.ai. (2025, January 10). [Commentary on American Express cardmember fees]. X. Retrieved from https://x.com/fiscal_ai/status/1877732193705038172
Fiscal.ai. (2025, February 11). [Commentary on American Express fee per card]. X. Retrieved from https://x.com/fiscal_ai/status/1891125410152542330
Fiscal.ai. (2025, March 18). [Commentary on American Express pricing power]. X. Retrieved from https://x.com/fiscal_ai/status/1904609250892276035
Fiscal.ai. (2025, May 31). [Commentary on Amex consumer premium card fees]. X. Retrieved from https://x.com/fiscal_ai/status/1929621812771803488
Investing.com. (2025, July 18). American Express Q2 2025 Slides: 9% Revenue Growth Driven by Premium Card Fees. Retrieved from https://www.investing.com/news/company-news/american-express-q2-2025-slides-9-revenue-growth-driven-by-premium-card-fees-93CH-4141544
Kiernan, J. S. (2024, June 14). American Express Annual Fee. WalletHub. Retrieved from https://wallethub.com/answers/cc/american-express-annual-fee-1000318-2140725757/
Merchant Cost Consulting. (2024, May 17). The Complete Guide to Amex Interchange and Processing Fees. Retrieved from https://merchantcostconsulting.com/lower-credit-card-processing-fees/the-complete-guide-to-amex-interchange-and-processing-fees/
RTTNews. (2025, July 19). American Express Reaffirms FY25 Outlook – Update. Retrieved from https://www.rttnews.com/3554964/american-express-reaffirms-fy25-outlook-update.aspx
The Motley Fool. (2024, November 1). Average Credit Card Processing Fees And Costs In America. Retrieved from https://www.fool.com/money/research/average-credit-card-processing-fees-costs-america/
Yahoo Finance. (2025, July 19). Amex Q2 Card Member Spending Hits Record, Card Fees Soar. Retrieved from https://finance.yahoo.com/news/amex-q2-card-member-spending-123010219.html
Yahoo Finance. (2025, July 19). American Express (AXP) Re-Affirms 2025 Earnings Guidance with Revenue Growth of 8% to 10%. Retrieved from https://finance.yahoo.com/news/american-express-axp-affirms-2025-172344599.html
