The largest credit card creditor, American Express, published its Q4 2009 earnings, doubling its profits from the same period in 2008.

The company reported net income as $716-million in Q4, compared to only $240-million in the same period last year. The increase represented a massive 198-percent increase from a year ago.

American Express said in a written statement, “We still face the challenge of high unemployment levels, depressed real estate values, and shrunken household balance sheets, but the overall economy and our company are in stronger shape than they were a year ago.”

The increase in total profits can be attributed to drastic cost-cutting measures implemented by American Express CEO Kenneth Chenault. The financial intermediary also lowered bad debt expenses in the quarter by making it harder for less credit worthy clients to get loans. American Express had the lowest loan losses among other large financial institutions including Bank of America and JPMorgan Chase.

Discretionary spending has also increased as the U.S. economy improves. Discretionary spending is expected to increase in 2010, as consumers will have more disposable income assuming the economy improves as expected.

The American Express stock (NYSE:AXP) is trading about 2.5-percent down in after hours trading.