Life is good when you've got a moat wider than the Amazon river. While the turmoil in the credit market inflicted pain on Citigroup (NYSE:C) and Wachovia (NYSE:WB), American Express (NYSE:AXP) waltzed through its third quarter. Revenue climbed by 11%, and year-over-year income from continuing operations and diluted earnings per share grew by 11% and 14%, respectively.

American Express' wealthy customers, despite the subprime collapse, continue to spend money hand over fist. In its proprietary U.S. card business, consumer spending grew 12%, small-business spending grew 15%, and corporate-services spending grew 9%.

The global network services (GNS) unit continues to go gangbusters. Until 2004, MasterCard (NYSE:MA) and Visa conspired to freeze AmEx and Inside Value pick Discover (NYSE:DFS) out of the big banks, to whom they basically said that if they issued AmEx or Discover cards, they could forget about issuing a Visa or a MasterCard. However, recent legislation broke the collusion, and now Income Investor selection Bank of America (NYSE:BAC) and HSBC are issuing AmEx cards left and right. In the U.S., billed business grew by almost 100% for the quarter in the GNS unit.

The continued rise of emerging markets also gave AmEx some tailwinds. Internationally, billed business grew by 10%, worldwide cards in force grew 11%, and spending per proprietary basic card grew 8%.

However, American Express also faced some headwinds in the quarter. Like Capital One (NYSE:COF) and Discover, credit losses have increased as the credit environment "normalizes" as a result of bankruptcy legislation in 2005. Loss provision grew 25% compared with last year.

In addition, similar to how Southwest's plane fuel hedges eventually wore off, about $11 billion of AmEx's interest-rate hedges expired. As a result, the cost of these funds increased from 3.2% to 5.4%, and that increase raised interest expense $59 million for the quarter.

What's more, despite its strong competitive advantages, AmEx isn't totally immune to the credit environment. The increase in credit spreads caused by the credit troubles increased AmEx's cost of funds. In a nutshell, this decreases the amount of money AmEx makes when it securitizes its credit card receivables, and it limited securitization income growth to 2%.

Nevertheless, the quarter really allowed AmEx to flex its muscle while its competitors struggled mightily. Fools, take note: This wide-moat stock trades at a mere 14.5 times forward earnings estimates. Perhaps now's the time to load up on AmEx.

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