Card member spending rose 9 percent globally to $258 billion (£152.26 billion), after adjusting for foreign currency, compared to 7 percent growth in the preceding quarter and 8 percent growth in the second quarter last year.

Growth in billed business volumes was encouraging, Keefe Bruyette & Woods analyst Sanjay Sakhrani said. "We are starting to see some traction in the United States as well as in Europe."

American Express Chief Financial Officer Jeffrey Campbell said on a conference call that spending levels of its customers indicated higher confidence about the economy.

The rise in consumer confidence also helped smaller rivals Capital One Financial Corp and Discover Financial Services post better-than-expected results.

American Express, which mostly issues its own cards unlike Visa Inc and Mastercard Inc that work through banks, benefits from its largely affluent customers' consistent spending and low rates of default.

However, single-digit growth in spending by the company's card users for nine straight quarters has pushed American Express to launch new products such as a fee-free card that targets a wider range of customers.

PROFIT BOOST

AmEx's net income rose to $1.53 billion, or $1.43 per share, for the second quarter ended June 30, from $1.41 billion, or $1.27 per share, a year earlier.

Total revenue, net of interest expense, rose 5 percent to $8.66 billion.

"The strong underlying performance this quarter reflected a continuation of some familiar themes: higher card member spending, credit metrics at or near their historic lows, a modest increase in loan balances," Chief Executive Kenneth Chenault said in a statement.

Net income for the second quarter included a gain of $626 million from the spinoff of AmEx's business travel operations.

Excluding the gain, the company's earnings were $1.38, which were in line average analyst estimate, according to Thomson Reuters I/B/E/S.

Total expenses rose 2 percent to $5.86 billion, partly due to a rise in marketing costs.

AmEx's worldwide card member loan balances rose 5 percent to $66.3 billion from a year earlier.

AmEx shares closed at $91.71 on Tuesday on the New York Stock Exchange. They have gained about 6 percent in the past six months.

(Reporting by Avik Das in Bangalore; Editing by Don Sebastian)

By Avik Das