Consumer delinquency rates are rising, impacting investor sentiment as economic worries persist. Visa (NYSE: V) and Mastercard (NYSE: MA) have seen stagnant share prices despite strong earnings, while American Express (NYSE: AXP) outperformed with a Q3 revenue miss. The key to AXP’s success in 2026 depends on consumer behavior.
Recent data from the Federal Reserve shows credit card charge-off rates have decreased to 4.17%, a positive trend from last year. All major credit card companies reported Q3 earnings, showcasing consumer resilience despite economic challenges like tariffs and high rates.
American Express reported a revenue miss but strong EPS beat in Q3, with credit losses down 5% YOY. Visa had an EPS beat and revenue growth of 11% YOY, while Mastercard recorded revenue growth of 15% YOY. Consumer spending remains strong across income levels, benefiting financial companies.
American Express focuses on affluent customers, leading to lower margins but less risk compared to Visa and Mastercard. If economic downturn impacts affluent spenders, AXP could face higher risks due to direct lending practices, unlike its peers.
Visa and Mastercard cater to a broader client base but have higher valuations and revenue reliance on transaction fees. Both are more susceptible to lower-end consumer spending slowdowns compared to American Express, which has a more attractive valuation and stronger metrics.
American Express has outperformed Visa and Mastercard since April, with a 40% increase in shares. Technical data supports continued growth, with a Golden Cross in June and strong support levels. AXP is likely to maintain its lead over V and MA in the near future.
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Read more at Nasdaq: Is American Express the Credit Stock For a K-Shaped Economy?