Reserves for Losses

6 Months Ended

Jun. 30, 2018

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 six months endedJune 30:

(Millions)		2018		2017
Balance, January 1		$	145	$	110
	Provisions		119		113
	Other credits (a)		32		33
	Net write-offs (b)		(119)		(94)
	Other debits (c)		(20)		(16)
Balance, June 30		$	157	$	146

• 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 $5.5 billion and $ 6.0 billion for the six months endedJune 30, 2018 and 2017, respectively.
• Net of recoveries of $55 million and $45 million for the six months endedJune 30, 2018 and 2017, respectively.
• Primarily reserve balances related to participation interests in Card Member receivables sold to an affiliate. Participation interests in Card Member receivables sold totaled $3.4billion and $ 2.6 billion for the six months endedJune 30,2018 and 2017, respectively.

Changes in Card Member Loans Reserve for Losses

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

(Millions)		2018		2017
Balance, January 1		$	5	$	5
	Provisions		3		3
	Net write-offs(a)		(3)		(3)
Balance, June 30		$	5	$	5

Net of recoveries of $ 1.0 million for each of the six months endedJune 30, 2018 and 2017.