American Express: Card Fee Growth Matters More Than Spending This Quarter

As American Express (AXP) prepares to report its second-quarter 2026 earnings on July 24, analysts are shifting their focus from total cardmember spending to a metric that may better reflect the company's evolving business model: card fee growth. Historically, spending volume was the key driver of revenue, but Amex is increasingly resembling a subscription business, making recurring card fees a more stable and predictable indicator of financial health.

Why Card Fee Growth Matters More

American Express has been transforming its business model to emphasize subscription-like features, offering premium benefits such as airport lounge access, travel credits, and loyalty rewards in exchange for annual fees. This model provides recurring revenue that is less sensitive to economic cycles compared to transaction-based income from spending.

Total spending, while still important, can be volatile due to macroeconomic factors like inflation, consumer confidence, and seasonal trends. In contrast, card fee growth signals customer willingness to pay for value-added services and reflects the strength of Amex's brand loyalty.

What Analysts Are Watching

Analysts expect American Express to report card fee growth of 10-12% year-over-year, driven by new card acquisitions and price increases on premium products. Key metrics to watch include:

• New cardmember additions.
• Retention rates.
• The proportion of revenue from card fees versus transaction fees.

Broader Context

American Express faces increasing competition from fintech companies offering no-fee cards, but its focus on high-income consumers who value exclusivity gives it a defensive moat. The company's ability to grow card fees will be a test of its premium positioning.

What This Means for Investors

Strong card fee growth in Q2 would reinforce the narrative that American Express is successfully transitioning to a subscription-like model, potentially supporting a higher valuation multiple. Conversely, weak fee growth could raise concerns about competitive pressures or customer pushback on pricing.