American Express 2004 Annual Report Download - page 17

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In 2004, worldwide spending on American Express cards reached an all-time high of $416
billion, up 18 percent from a year ago. This performance exceeded the organic spending
growth of all major card issuers. Our focus on providing premium value to our cardmem-
bers, offering best-in-class rewards programs and expanding the use of American Express
cards in retail and everyday-spend categories fueled strong growth in average spending
per cardmember. In addition to deepening relationships with existing cardmembers, we
also focused on adding new high-spending cardmembers to our franchise. We added a net
total of 4.9 million cards in 2004 — one of our largest annual increases ever — bringing
overall cards-in-force to 65.4 million at year-end.
Our excellent growth in cardmember spending reflects broad-based gains across the con-
sumer, corporate and small business segments in the United States and internationally.
These gains cut across all merchant categories — retail, everyday spending, and travel and
entertainment. For Global Network Services cards, volumes rose more than 30 percent,
reflecting higher growth from existing partnerships and strong performance from partners
added in 2004.
While spending is at the heart of our business model, cardmember lending is an important
complementary activity. Cardmember loans include balances on revolving credit cards as
well as lending features on our charge card products. Although loan growth across the indus-
try slowed from a year ago, our organic growth continued to outpace the industry average.
As I mentioned earlier, credit performance has been a critical element in the strong growth
of our card business. Both in the United States and across international markets, we are at
or near historic lows in both our charge and lending write-off and past-due rates. We have
benefited from generally strong economies, but our achievements go beyond environmen-
tal factors. We have made advances in our information capabilities, our modeling, and in
the business approach we bring to bear on credit decisions — all of which has served to
drive down provision rates, even as we grow our overall business at a rapid pace.
To sustain our momentum and strengthen our competitive position, we introduced a wide
array of new products, services, rewards programs and partnerships around the world in
2004. For example:
We launched a major new card brand advertising campaign in the United States and seven
international markets. “My life. My card.” is our first campaign supporting both the pro-
prietary and network businesses.
AXP
AR.04
—
15
Welcoming New Cardmembers_ We added a net total of
4.9 million American Express cards in 2004. This increase —
one of our largest ever — illustrates the strength of our pro-
prietary card-issuing business and the continued expansion
of Global Network Services.
CARDS-IN-FORCE (in millions)
51.7
54.9 57.0
60.5
65.4