Core Insights - Making only minimum payments on credit cards can lead to significant long-term debt accumulation, despite providing short-term financial flexibility during hardships [1][4][20] - The percentage of credit card accounts making only minimum payments reached a 12-year high of 11.04% at the end of 2024, indicating a growing trend among consumers [7] Minimum Payment Overview - A minimum credit card payment is typically between 1% to 5% of the statement balance, or a flat dollar amount, depending on the card issuer [3][9] - Paying only the minimum amount due helps avoid late fees but does not prevent debt accumulation, as remaining balances accrue interest [4][21] Financial Strategies - It is advisable to pay more than the minimum whenever possible to avoid high-interest debt [4][8] - In times of financial strain, making minimum payments can provide temporary relief, but consumers should have a plan to return to full payments [5][7] Consequences of Minimum Payments - Paying only the minimum can lead to accruing interest rates as high as 20% to 30% APR, significantly increasing the total debt over time [23] - Missing payments can result in late fees up to $41 and potential damage to credit scores due to reported delinquencies [16][19] Grace Period Implications - Credit cards typically offer a grace period on purchases, which can be lost if the total balance is not paid in full, leading to immediate interest charges on new purchases [24][25]

Core Insights - American Express Company (AXP) is adapting to the Buy Now Pay Later (BNPL) trend by integrating it into its existing card services rather than resisting it [1][4] - The company's 'Plan It' feature allows cardholders to split purchases of $100 or more into manageable monthly payments, enhancing the cardholder experience with rewards and benefits [2][8] - American Express is collaborating with various companies to strengthen its presence in the digital shopping landscape, showcasing that traditional financial institutions can innovate and grow within the BNPL space [3][4] Financial Performance - American Express achieved a 98% spend retention rate, with network volume increasing by 7% year over year in Q2 2025, indicating strong customer loyalty and growth [4][8] - The forward price-to-earnings ratio for American Express is 18.4X, which is lower than the industry average of 20.6, suggesting a potentially attractive valuation [10] - The Zacks Consensus Estimate for American Express' 2025 earnings is projected at $15.26 per share, reflecting a 14.3% increase from the previous year [11] Competitive Landscape - Competitors in the BNPL space include PayPal Holdings, which reported a 6% year-over-year growth in total payment volume and a 2% increase in active accounts to 438 million in Q2 2025 [5] - Affirm Holdings is focusing on higher-ticket purchases and reported a 23% year-over-year increase in active consumers, along with a 36% growth in gross merchandise volume in Q3 2025 [6]