Reserves for Losses

9 Months Ended

Sep. 30, 2016

Reserves for Losses [Abstract]

Reserves for Losses

3. Reserves for Losses

Reserves for losses relating to Card Member receivables and loans represent management’s best estimate of the probable inherent losses in Credco’s outstanding portfolio of receivables and loans, as of the balance sheet date. Management’s evaluation process requires certain estimates and judgments.

This Note is presented excluding amounts associated with the Card Member receivables HFS as ofDecember 31, 2015; Credco did not have any Card Member receivables HFS as of September 30, 2016.

Changes in Card Member Receivables Reserve for Losses

The following table presents changes in the Card Member receivables reserve for losses for the nine months endedSeptember 30:

(Millions)		2016		2015
Balance, January 1		$	114	$	94
	Provisions		101		116
	Other credits (a)		13		32
	Net write-offs (b)		(105)		(124)
	Other debits (c)		(17)		(9)
Balance, September 30		$	106	$	109

• Primarily reserve balances applicable to new groups of Card Member receivables purchased from TRS and certain of its subsidiaries and participation interests from affiliates. New groups of Card Member receivables purchased totaled $3.4 billion and $5.8 billion for the nine months endedSeptember 30, 2016 and 2015, respectively.
• Net of recoveries of $71 million and $79 million for the nine months endedSeptember 30, 2016 and 2015, respectively.
• Primarily reserve balances applicable to participation interests in Card Member receivables sold to an affiliate. Sale of participation interests totaled $4.7 billion and $1.4 billion for the nine months endedSeptember 30,2016 and 2015, respectively.

Changes in Card Member Loans Reserve for Losses

The following table presents changes in the Card Member loans reserve for losses for the nine months endedSeptember 30:

(Millions)		2016		2015
Balance, January 1		$	4	$	3
	Provisions		4		4
	Net write-offs(a)		(4)		(3)
Balance, September 30		$	4	$	4

Net of recoveries of $1 million for both the nine months endedSeptember 30, 2016 and 2015, respectively.