How Risky Is American Express?
Credit card company American Express (NYSE: AXP) endured a difficult 2020, like many in the financial services space, but came through it better than most. The stock price was only down about 1% last year, which is not bad considering that the coronavirus pandemic and its related recession led to a sharp decline in spending and practically shut down the travel industry.
The company is in a much better position to grow in 2021 and beyond, as the stock price is already up over 4% year to date. But that doesn't mean the stock is not without risk. Let's take a look at where the company is headed.
American Express is a credit card company, but unlike Visa and Mastercard, it doesn't issue its credit cards through banks. American Express has its own financial network, lending the money to the card user with repayment due at the end of the month. So, it makes money on member or card user fees, merchant transactions, and interest income.
Source Fool.com
