American Express Card Spending Is Growing at Its Fastest Pace in 3 Years. Can the Affluent Consumer Keep It Up?

This year hasn't been a smooth ride for American Express (NYSE: AXP) investors. The credit card company's shares are down about 16% in 2026, lagging the overall S&P 500 index by a wide margin.

But investors shouldn't let the financial stock's disappointing performance overshadow its underlying fundamental strength. American Express saw its billed business, a measure of card spending, jump 10% year over year in the first quarter. This was the fastest pace of growth in three years.

Can affluent consumers keep it up and continue driving the company's success?

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Spending activity remains strong

During the three-month period that ended March 31, American Express reported billed business of $428 billion. Of note, retail spending overall increased 11%, while spending at luxury retail merchants was up 18%. These trends clearly aren't representative of typical consumer behavior, as many households are concerned about the state of the economy right now.

Attention should go to the Platinum Card, which posted an acceleration in spending growth during Q1. The leadership team highlighted strong retention rates, even with a higher annual fee being introduced last year.

And across the entire product portfolio, 73% of new card accounts were for fee-paying products. There remains robust demand for American Express's premium offerings, especially among the Millennial and Gen Z cohorts.

Inflation continues to be a notable macro story

The Consumer Price Index rose 3.8% year over year in April, a nearly three-year high. Consequently, the biggest question shareholders probably have, particularly for a company that's dependent on the health of the consumer, centers around the impact of inflation on the spending behavior of American Express's card members.

In 2022, the last time inflation was surging, American Express registered year-over-year growth in billed business of 25%, leading to a 25% net revenue gain. Inflation these days isn't nearly at the same level as it was earlier this decade.

"While the macro and geopolitical environment remains uncertain, we believe we are well positioned to continue delivering strong results given our focus on premium customers, our spend‑ and fee‑centric model, and very strong portfolio quality," said CEO Stephen Squeri on the Q1 2026 earnings call.

That portfolio quality is supported by a net write-off rate of 2% in the first quarter. This was an improvement from 2.1% in the year-ago period.

For now, investors should have confidence that the fundamentals will remain intact. As the current valuation looks reasonable, American Express's stock performance shouldn't be negatively impacted by inflationary pressures. That's the benefit of targeting an affluent customer base.

American Express is an advertising partner of Motley Fool Money. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express. The Motley Fool has a disclosure policy.