How Millennials and Gen Z Are Powering Credit Card Spending Growth

The latest earnings report from American Express (Amex) underscores a major trend in consumer spending: Millennials and Gen Z are leading the way. According to the company’s Q4 results, spending by these younger generations grew by a remarkable 16% year-over-year, significantly outpacing older cohorts, whose spending increased by mid-single-digit percentages. This surge has played a crucial role in maintaining strong credit card usage trends.

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A Look at the Numbers

American Express reported that total billed business, representing cardmember spending and transactions, grew 8% year-over-year, reaching $376.7 billion on an FX-adjusted basis. U.S. consumer spending outpaced this figure, increasing by 9%, with Millennials and Gen Z accounting for 34% of that spending.

Commercial spending also saw steady growth, with a 4% year-over-year increase. Specifically, U.S. small- to medium-sized businesses (SMBs) increased their spending by 3%, while large and global businesses saw a 7% rise.

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What’s Driving the Growth?

American Express CEO Steve Squeri attributes this spending boom to a strong holiday shopping season, consumer confidence, and a growing preference for premium credit cards. The company holds a 25% market share in fee-based consumer premium cards, which are particularly attractive to younger generations looking for added perks and rewards.

Moreover, Amex’s Chief Financial Officer Christophe Le Caillec highlighted that spending was broad-based, spanning travel, entertainment, goods, and services. The company’s loan and card receivables increased by 9%, and credit performance remains strong, with stable delinquency and write-off rates.

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What This Means for Businesses

The data highlights the importance of adapting to the spending habits of younger consumers. With Millennials and Gen Z driving significant growth, businesses should prioritize payment solutions that cater to their preferences—fast, digital, and reward-driven transactions.

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Looking to improve your payment processing solutions? Contact our team today at mike.clements@kuberapayments.com or call us at 604-484-9297. We’re here to help your business succeed!

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