American Express Earnings Up 31% as Cardholders Spend More

American Express Co. is spending money to make money. From its latest quarterly report, it seems that strategy is working.

Cardholder spending during the second quarter rose to an all-time high of $207.6 billion, an increase of 18% over the prior year quarter, the credit card issuer said Wednesday. On average, cardholders spent $3,767, a 15% increase over the second quarter of last year.

That helped drive net income up 31% to $1.33 billion, or $1.10 a share, from $1.02 billion, or 84 cents per share, a year earlier. Total revenue climbed 12% to $7.62 billion.

Expenses also rose, increasing 21% to $5.5 billion as the company invested more resources into its business and enhanced its rewards programs to encourage more cardholder spending. Money spent on cardholder rewards and services jumped 35% to $1.79 billion, the company said.

Amex, long recognized as the card brand for the well-heeled set, has been making a concerted effort in recent months to move beyond its traditional customer base. Namely, it's been reaching out to a younger, more technology-savvy consumer by expanding its online capabilities through applications on Facebook and Foursquare.