Steve Squeri: Yes. And we tend to get a higher share of their wallet, but they have lower €“ they do have lower spending. And the great part about millennials and Gen Zs is that they are €“ and depending on where you are in millennial. I mean some millennials are 40 now. So, I mean, they are in a different thing. But the reality is the lifetime value of these cardholders is going to be significantly more than the lifetime value of acquiring a boomer or acquiring a Gen Xer right now. And that is €“ that’s very attractive as well. And if you look, again, Rick, on Page 5, you will see that, look, it’s 30% of the business growth. On the other hand, the boomer growth is only 6%. And some of those have been leery to go back travel still. So, we would also expect that to go up.
Operator: Thank you. The next question is coming from Dominick Gabriele of Oppenheimer. Please go ahead.
Dominick Gabriele: Hey. Good morning.
Steve Squeri: Hey Dominick.
Dominick Gabriele: Great results. Good morning. I just want to change the topic a little bit. I just wanted your updated thoughts if you could just remind everybody about your ability to make account-by-account purchase limit authorization decisions given many of the accounts don’t actually have stated line sizes on the charge cards. So, I am just really wondering about severity of loss in the downturn versus the frequency is more based on unemployment, but your ability to really hone in on limiting the severity of loss given your underwriting techniques. Thanks so much guys.
Steve Squeri: I mean I think you just reminded us. The reality is, it’s a couple of things, right. Number one, we constantly go through and look at contingent liability that’s not being utilized. And so if we have somebody that has X for Align and they are only using 25% of X, we may not keep X there that long. We don’t want to be a lender of last resort, right. That’s number one. Number two, we also are €“ for new card members, we are raising those cycles, but raising the limit, the hurdle rate that we acquire card members. But we underwrite every transaction. We make a credit decision not based on the line because most of our card members do not have a line. I mean obviously, traditional lending cards have line. But other than that, we are underwriting every single transaction.
So, we are not letting somebody just run it up because they have run it up in the past. And we are not letting somebody run up to a limit and have that write-off. One of the advantages of our model, and I am not going to get into all the variables underneath for a couple of reasons. Number one, we don’t have time. And number two, it’s very complicated. And number three, I probably don’t fully all understand the whole thing either. But it’s €“ an advantage of this model is that every single transaction is adjudicated on its own merits. It’s not adjudicated based on an open to buy. And that is very important. It also €“ but that’s from a credit perspective, that’s a really reassuring thing. But from a spending perspective, it also enables why you read some of these stories of, hey, I just bought a painting for $75 million.
There is nobody that has a $75 million line, right. Now, those are very difficult underwriting decisions and not for the faint of heart, but it does show that we make those same kind of decisions on a $200 purchase, on a $400 purchase. Every single transaction that comes through this system is adjudicated on its own merits, not on sort of some open to buy, and that gives us great comfort in terms of not having somebody just run something up and then have something written off.
