Reserves for Losses

9 Months Ended

Sep. 30, 2017

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.

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)		2017		2016
Balance, January 1		$	110	$	114
	Provisions		171		101
	Other credits (a)		35		13
	Net write-offs (b)		(142)		(105)
	Other debits (c)		(16)		(17)
Balance, September 30		$	158	$	106

• Primarily reserve balances related to participation interests in Card Member receivables purchased from affiliates. Participation interests in Card Member receivables purchased totaled $6.0 billion and $3.4billion for the nine months endedSeptember 30, 2017 and 2016, respectively.
• Net of recoveries of $70 million and $71 million for the nine months endedSeptember 30, 2017 and 2016, respectively.
• Primarily reserve balances related to participation interests in Card Member receivables sold to an affiliate. Participation interests in Card Member receivables sold totaled $2.6 billion and $4.7 billion for the nine months endedSeptember 30,2017 and 2016, 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)		2017		2016
Balance, January 1		$	5	$	4
	Provisions		5		4
	Net write-offs(a)		(5)		(4)
Balance, September 30		$	5	$	4

Net of recoveries of $1.0 million for both the nine months endedSeptember 30, 2017 and 2016.