Don't look for American Express (AXP)'s better-than-expected third-quarter results, announced Thursday, to presage a turnaround for other big card issuers. Most are getting socked by mounting loan losses, as cardholders contend with rising unemployment and falling home prices. And as consumers deleverage, they're spending less on credit cards and paying down balances, which means less revenue from interest and fees.

It's a different story for American Express. For the fifth straight month, the company wrote off fewer bad loans to cardholders in September. What's more, purchases on its charge cards -- which must be paid off at the end of every month -- are growing faster than those on its credit cards for the first time in at least two years.
All things considered, AmEx is "more of a payment processor than a lender" and looks poised to benefit from consumers' ever-increasing preference for cards over cash at the register, William Blair & Co. analyst David Long wrote in a note to clients. He expects the company's stock to outperform the broader market over the next year.

Big credit-card issuers saw their third-quarter earnings punished by higher loan losses. At JPMorgan Chase (JPM), credit-card losses totaled $700 million; Bank of America (BAC) card income fell $426 million from a year ago.

In addition to falling behind on their loans, consumers are also borrowing less. The Federal Reserve reported earlier this month that credit card balances fell 13 percent in September on an annualized basis. And Visa (V) and Mastercard (MA), the two biggest card networks, have seen a big shift toward debit cards from credit as beleaguered consumers become more wary of debt.

Analysts are universal in praising American Express. Brad Ball, an analyst with boutique investment firm Ladenburg Thalmann, said American Express's results were "more a reflection of the extremely weak spending environment over the past 12 months, as opposed to any rebound in the consumer economy."

And American Express has seen eight consecutive quarters of falling profits, so the company is hardly in the clear. But if it can lean on its seemingly rebounding charge card business, it may be better positioned than its credit card–dependent rivals.

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