8-K: Amex Consumer Loan Write-Offs Rise in October

American Express reports an increase in U.S. Consumer Card Member loan write-off rates and delinquencies for October 2025, while overall loan balances grew.

Summary

• U.S. Consumer Card Member total loans increased to $95.2 billion in October 2025, up from $94.1 billion in September 2025.
• The 30 days past due loans for U.S. Consumer Card Members increased to 1.4% in October 2025, up from 1.3% in August 2025.
• The net write-off rate for U.S. Consumer Card Member loans rose to 2.2% in October 2025, compared to 1.9% in September 2025 and 2.0% in August 2025.
• U.S. Small Business Card Member total loans increased to $31.2 billion in October 2025, up from $30.7 billion in September 2025.
• The 30 days past due loans for U.S. Small Business Card Members remained stable at 1.6% across August, September, and October 2025.
• The net write-off rate for U.S. Small Business Card Member loans was 2.6% in October 2025, a slight increase from 2.5% in September 2025 but lower than 2.7% in August 2025.
• Total Card Member loans held for investment (U.S. Consumer and U.S. Small Business) reached $126.4 billion in October 2025, an increase from $124.8 billion in September 2025.
• The American Express Credit Account Master Trust reported an annualized default rate, net of recoveries, of 1.3% for October 2025, up from 1.2% in August 2025.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the notable increase in U.S. Consumer Card Member write-off rates and delinquencies, which are key indicators of asset quality. While overall loan balances grew and small business metrics were relatively stable, the deterioration in the larger consumer segment's credit quality is a concern.

Positives

• Overall U.S. Consumer Card Member total loans grew to $95.2 billion in October 2025.
• U.S. Small Business Card Member total loans increased to $31.2 billion in October 2025.
• 30 days past due rates for U.S. Small Business Card Members remained stable at 1.6%.

Negatives

• U.S. Consumer Card Member net write-off rate increased significantly to 2.2% in October 2025 from 1.9% in September 2025.
• U.S. Consumer Card Member 30 days past due loans increased to 1.4% in October 2025 from 1.3% in August 2025.
• The annualized default rate for the American Express Credit Account Master Trust increased to 1.3% in October 2025 from 1.2% in August 2025.

Risks

• Variability in reported credit performance due to differences in the mix, vintage, and aging of loans.
• Differences in calculation methodologies, such as using end-of-period principal balances versus average loan balances for write-off statistics.
• Impact of additions to the Lending Trust within a particular period on net write-off rates.
• Fluctuations in monthly statistics due to factors like the number of days in a month, timing of holidays and weekends, seasonality, and timing of information from third parties.

Future Outlook

No explicit forward-looking statements or guidance were provided in this filing regarding future credit performance or financial projections.

Industry Context

This filing provides a snapshot of American Express's credit quality trends for its U.S. consumer and small business loan portfolios. These metrics are crucial indicators of the health of the broader credit card industry and the economic well-being of consumers and small businesses, particularly in a period where economic conditions can influence repayment capabilities.

Comparison to Industry Standards

• The filing does not provide specific comparable company or project data to assess these results against global benchmarks. A comprehensive industry comparison would require similar detailed credit performance data from competitors like Visa, Mastercard (for network volumes, though they don't hold loans), JPMorgan Chase, Bank of America, or Discover Financial Services, which are not included in this report.

Stakeholder Impact

• Shareholders may be impacted by potential changes in asset quality and profitability due to rising write-offs, which could affect future earnings and dividend capacity.
• Customers (Card Members) may experience changes in credit terms or availability if credit quality trends continue to deteriorate, potentially leading to tighter lending standards.

Key Dates

Recommendation

The filing presents mixed signals. While American Express continues to grow its loan portfolios, particularly in the U.S. Consumer and Small Business segments, the noticeable increase in U.S. Consumer Card Member write-off rates and delinquencies is a concerning trend for asset quality. The stability in small business credit metrics provides some balance, but the deterioration in the larger consumer segment warrants caution. Investors should monitor future credit performance reports closely, as sustained increases in write-offs could impact profitability. Based solely on this filing, a 'hold' recommendation is appropriate, suggesting investors maintain their current positions while awaiting further clarity on credit trends and broader economic conditions.

Keywords

American Express, AXP, credit performance, delinquency, write-off rates, consumer loans, small business loans, SEC filing, 8-K, financial metrics, credit risk