By the numbers: American Express’ total net revenues increased 8% YoY in Q3, per its earnings release.

Higher net interest income and loan volume, card member spending, and card fee revenues drove growth.

Diving into card growth: Card fee revenues jumped up 18% YoY thanks to higher spend and account openings from Gen Z and millennials.

Card spend increased 6% YoY. Growth was even across both goods and services (G&S) and travel and entertainment (T&E). We forecast Amex’s full-year card transaction value will increase 10.4% YoY.

• Spend was boosted by Gen Z and millennials: Their billed business grew 12% YoY, compared with just 4% for Gen X and flat growth for baby boomers.
• Amex said new benefits in popular categories like dining fueled growth among younger consumers.

Amex also acquired 3.3 million new cardholders during the quarter. Millennials and Gen Zers made up 80% of new accounts for the US Consumer Gold Card.

Why it matters: Amex has conducted 40 product refreshes since the start of the year, the company said. And given this quarter’s results, they seem to be paying off.

• For example, Amex bumped up the Gold Card’s annual fee from $250 to $325. Customers also got added dining credits and wider hotel benefits.
• Amex also raised fees across its six Delta SkyMiles credit cards and updated their rewards programs in February. It added new statement credits, new rewards categories, and an enhanced companion certificate.

How did this affect expenses? These product updates and acquisition efforts weren’t cheap.

• Card member reward expenses increased 10% YoY, compared to 6% YoY last year.
• Marketing spend increased 19% YoY, a big change from the 15% drop last year.

Our take: Amex risked scaring away consumers with higher annual fees. And while some fee hikes have only just kicked in, it seems that the risk will pay off.

Many consumers, especially millennials and Gen Zers, view Amex’s cards as status symbols and are willing to pay the price upfront for the value they can get in the end.