Abel to Hold American Express for Decades Due to Rewards Program Appeal

American Express is a Berkshire Hathaway holding that has been in Warren Buffett's portfolio for nearly four decades. According to a prediction, it will remain under Greg Abel's leadership because of its ability to attract new cardholders from younger generations through its highly appealing rewards program.

The company generates significant revenue from merchant fees and uses this money to offer generous perks to card members that cost nearly twice what members pay in annual fees. This creates a cycle where members are incentivized to rack up as many reward points as possible, boosting discount revenue from merchant fees.

American Express is attracting new card members and guiding for double-digit revenue growth and record earnings in 2026, despite consumer spending being under pressure. The business can thrive regardless of the economic cycle due to its network effects, which incentivize merchants to accept American Express cards even though they tend to have higher fees than Visa and Mastercard.