The "Don't leave home without it" slogan by American Express (NYSE:AXP) must be hitting home with consumers. The New York-based charge-card company reported record card-member billings, strong growth in lending balances and higher client assets during its third quarter. Its third quarter revenues rose 9% over last year to $6.4 billion, in spite of continued lethargy in the travel industry.

But can this spending spree by consumers last? American Express reported that its credit quality remains strong. It's total provision for losses declined 7%. But with finance charges rising 18% in the year, the company is essentially betting that the good times will continue apace. Other companies in the sector have been nailed in the past for insufficient reserving policies. American Express has a history of maintaining relatively tight requirements for credit on its customers, but as we saw in 2000, things can change in a hurry.

In its most recent quarter, American Express' net income totaled $770 million, up 12% from $687 million last year. Diluted earnings per share rose to $0.59, up 13% from $0.52. Some of the components of American Express clearly benefited from the rocketing stock market. Its Financial Advisory Group, bedeviled in the past few years by massive losses due to write downs in its junk bond portfolio, turned in revenues 10% higher due to higher average asset levels among customers, which result in higher fees for the advisors.

The number of American Express cards on the marketplace rose 6% to 59.6 million during the latest quarter. American Express also continues to push more card-members to use its cards for day-to-day purchases such as gasoline and groceries -- its partnership with Costco (NASDAQ:COST) continues to generate massive volumes for the company.

Despite this promising outlook, I'm concerned that consumers will eventually be tapped out. If businesses don't start spending with gusto soon, consumers won't be able to continue with their current buying spree. Someone will have to pay, eventually, for the debt that is being racked up.

Despite the good numbers, American Express dropped 1.83% to close at $46.75 on Monday. It could be that the numbers were simply not as good as people had hoped, or that the company didn't guide substantially higher. But the fact that earnings were assisted by lower loss provision allocations, and that the amount of financing rose faster than net billings for the card division, coupled with continued weakness at the travel division, may indicate that such rises are not sustainable.

There's nothing really bad here -- AmEx's earnings were quite good, and we look forward to seeing the cash flow statement in the 10-Q in a few weeks. But sometimes investors are looking for stellar, and it wasn't here.

Brian R. Hook is publisher at He can be reached by email at