Credit card companies American Express (AMEX) and Discover recently released their earnings reports covering the fourth quarter of 2022, with both noting a considerable increase in total network volume.

Amex’s total Q4 network volume was up by 16% year over year (YoY) compared to the 30% it reported during the same time in 2021. Discover, on the other hand, grew its network volume by 6% YoY, considerably lower than the 21% it reported for Q4-2021.

According to experts, both card companies appear to have benefited from increased travel and consumer spending brought about by the year-end holidays.

The 84% YoY increase in domestic flights, as well as the 998% YoY increase for international flights, contributed to the surge as countries reopened their borders after nearly three years of being hampered by restrictions meant to curb the spread of COVID-19 and travel-starved consumers began organizing trips inland and overseas.

Likewise, retail sales over the 2022 Holiday Season grew by 7% YoY, hitting a total of around $1.297 trillion.

How AMEX Performed at the End of 2022

According to AMEX chief executive officer Steve Squeri, billed business accounted for the bulk of total network volume, hitting a record total of $357 billion at year’s end.

Despite the ongoing slump in consumer spending, AMEX was able to bring around three million new customers into its fold throughout Q4-2022 – a sign that the company’s wooing of millennials and Gen Z-ers paid off. Indeed, the segment drove consumer growth thanks to customer spending. This under-35 market represents around 60% of AMEX’s total proprietary consumer card acquisitions for the fourth quarter.

On the business side, however, spending remained within a modest limit as corporate travel has yet to bounce back. Nevertheless, billed business from travel and entertainment grew by about 38% YoY.

Despite this excellent showing for Q4-2023, AMEX executives are still keeping an eye on potential economic upheavals which is why the company increased its reserves by around 25% to serve as a buffer should customers be unable to pay back their loans.

Discover Spends More for Marketing

2022 saw Discover working to grow its consumer card business; indeed, its marketing expenses for promotion were up by 15% YoY. This led to an 8% increase in card sales throughout Q4, a very modest amount compared to the 25% YoY reported during the same period in 2021.

The company’s new accounts increased by 23% YoY in the fourth quarter, while loan receivables – mostly driven by card loans – were up by 20%.

According to Discover chief executive officer Roger Hochschild, the slower growth in sales was offset by a decrease in the payment rate. He added that his company expects payment rates to gradually decrease throughout this year.