The owners of American Express American Express credit cards are industry -scale trends concerning budgetary responsibility, said AMEX CEO Stephen Sueri.
Sueri said in a call for results on Thursday, in which the company exceeded the expectations of Wall Street, That millennium and generation Z clients “work much better, both from the point of view of the Fico and from the point of view of delinquency than the industry”.
Studies have shown that the young generation accumulates the historical levels of credit cards debt. A transunion study showed that the average debt of the credit card held by 22 to 24 years was $ 2,834, an increase of 26% compared to the millennials when they were the same age ten years ago.
Christophe Le Caillec, financial director of Amex, said that the average Fico score of its Customers Gen Z and Millennial was 750.
In February of last year, Credit Karma Intuit data revealed that a generation Z and the generation Y in three had a subprime credit rating of less than 600. This is associated with the young generation’s growing will to open more credit lines.
“It is normal for young people enough to borrow a lot during the first years of their career, and we are certainly seeing this happening right now with Gen Z and Millennials,” said Business Insider before.
Generation Z and generation Y were a boon for Amex’s affairs.
“As in the last quarters, consumers of the millennium and generation Z represented more than 60% of the new consumer accounts acquired worldwide in the first quarter,” said Sueri when the profits were called, which made the costs increase.
But where the trend diverges for young Amex holders compared to the rest of the industry, it is how they use their cards and their desire to keep the debt, said the CEO and the financial director.
Sueri said that the millennium and generation Z segments represent approximately 35% of overall expenses. Part of this comes from restaurant expenses, because AMEX offers a system of rewards of competitive points for catering.
But, according to the Calec, the millennium and the “combined” Z generation customers have always spent about 20% less than their older Amex counterparts.
He added that they also turned a little less, which is the stipade of the industry to reimburse their entire balance each billing cycle.
The financial health of young Amex card holders could be explained in part by the type of customers that the card attracts.
The lowest cards offer of Amex requires annual fees of $ 95 after a first price of $ 0 for the first year. Companies like Chase and Citi offer cards with a money back on purchases and at no annual expenses.
A Spokesman of Amex did not respond to a request for comments.
businessinsider
