Credit card earnings season reaches two of the biggest names this week. Capital One reports on Tuesday, October 20, after the market closes, and American Express follows on Friday, October 23, before the open, according to Kiplinger’s earnings calendar, which labels its dates tentative. Neither report will settle whether U.S. households are in good shape. Together, though, they’re about the best look you’ll get this month at how people are using credit, and whether they’re paying it back.
This preview of the credit card earnings covers what analysts expect, what each company reported last quarter, and five numbers worth checking when the results land.
What analysts expect from credit card earnings
Estimates vary by source, and the type of measure matters. Kiplinger lists analyst expectations of $5.50 a share for Capital One and $4.58 for American Express. A separate preview from Hudson Labs, published October 5, puts Capital One’s consensus at $4.52 a share on a GAAP basis, up from $3.57 a year earlier, with revenue of about $16.3 billion and net income near $3.3 billion. The gap between $5.50 and $4.52 most likely reflects adjusted versus reported earnings, so check which one a headline is using before calling a quarter a beat or a miss.
American Express gave a clearer anchor last quarter. In its second-quarter release, filed with the SEC, the company reported revenue of $19.6 billion, up 10 percent, and earnings of $4.53 a share, up 11 percent. It also left its full-year earnings guidance unchanged at $17.30 to $17.90 a share and raised its revenue growth outlook to 10 percent.
Costs are the other half of that picture. Expenses rose 12 percent to $14.5 billion in the quarter, a little faster than revenue, and net income grew 8 percent to $3.1 billion. That’s a healthy result, but it shows why investors pay as much attention to spending on rewards and marketing as they do to sales.
Five numbers to watch
First, the charge-off rate. This is the share of card balances a bank gives up on collecting. According to Hudson Labs, Capital One’s rate was 4.71 percent in the second quarter, and its delinquency rate was 3.39 percent. Both had improved from the first quarter, by 39 and 31 basis points. Management flagged inflation and energy prices as risks. If the rates tick back up this time, that’s the clearest sign yet that higher living costs are reaching card balances. American Express’s write-off rate was 2.0 percent in the second quarter, unchanged from a year earlier.
Second, provisions. Banks set money aside for expected losses, and the size of that cushion shows how worried they are. American Express’s provision fell to $1.1 billion from $1.4 billion a year earlier, partly because it released reserves. A release can’t repeat forever. If either company starts building reserves again, that usually signals it expects more trouble, whatever the current loss rate says.
Third, spending growth. American Express reported billed business of $455.8 billion in the second quarter, up 9 percent. That figure covers what cardholders charged. A slowdown below that pace would suggest consumers are pulling back, while a steady 9 percent would suggest they aren’t.
Fourth, the Discover integration at Capital One. Hudson Labs says Discover card loans fell 1.5 percent from a year earlier in the second quarter, that the front book moved to Capital One’s platform in September, and that the back-book conversion runs through January 2027. About one-third of the $1.5 billion in expected expense savings has been realized, with the rest due by mid-2027. Investors will watch whether loan balances start growing again and whether the savings show up on schedule.
Fifth, capital and buybacks. Capital One spent $2.7 billion on share repurchases in the second quarter, and its common equity tier 1 ratio slipped to 13.7 percent from 14.4 percent in the first quarter. Buybacks use up capital, so the pace this quarter shows how comfortable management feels.
How to read credit card earnings if you’re not an investor
You don’t need a finance degree to get something out of these reports. Skip the headline earnings number at first and go to the credit lines. A charge-off is a balance the lender has given up collecting, a delinquency is a payment that’s late, and a basis point is one hundredth of a percentage point. If delinquencies fall, fewer people are missing payments. If they climb, more are.
The second thing to check is whether a company is talking about reported or adjusted results. Adjusted figures strip out one-time costs, such as the expense of merging two companies. Capital One’s second-quarter efficiency ratio, for example, was 57.05 percent as reported but 51.38 percent adjusted, according to Hudson Labs. Neither number is wrong, but they answer different questions, and the difference can be large.
Other reports to check the same week
Capital One and American Express aren’t the only card lenders on the calendar. Per Kiplinger, Synchrony and Ally Financial both report Tuesday morning, before Capital One does, and their credit numbers can hint at what’s coming. For wider context on the rate backdrop, see our report on the September inflation data and Fed rate-hike odds.
What to watch after the credit card earnings
If charge-offs stay near current levels and spending holds up, the story from these credit card earnings is a consumer who is stretched but paying. If delinquencies rise at Capital One while American Express still shows healthy spending, that could point to a split between households with different credit profiles. Both outcomes are plausible, and neither says much about any one person’s finances. For anyone carrying a balance, the practical takeaway doesn’t change much: our guide to buy now, pay later is a reminder that credit costs money. This article is general information, not investment advice.
Editor’s take
Credit card earnings previews usually overpromise. The useful question this week isn’t whether Capital One or American Express beats a number, but whether the credit improvement Capital One showed in the second quarter keeps going. Watch the charge-off and delinquency lines first, then provisions. If they hold, the second half of the year looks calmer than the headlines about prices and rates suggest. If they don’t, the stress is showing up where it’s hardest to hide.
