Card Member Receivables and Card Member Loans

12 Months Ended

Dec. 31, 2018

Loans Notes Trade And Other Receivables Disclosure [Abstract]

Card Member Receivables and Card Member Loans

Note 2 – Card Member Receivables and Card Member Loans

American Express’ charge and lending payment card products result in the generation of Card Member receivables and Card Member loans, respectively.

Card Member Receivables

Card Member receivables represent amounts due on American Express charge card products. For American Express, the Card Member receivables are recorded at the time a Card Member enters into a point-of-sale transaction with a merchant. Each charge card transaction is authorized based on its likely economics, a Card Member’s most recent credit information and spend patterns. Additionally, global spend limits are established to limit the maximum exposure for American Express. Charge Card Members generally must pay the full amount billed each month.

Credco records these Card Member receivables at the time they are purchased from TRS and certain of its subsidiaries that issue the card (card issuers). Card Member receivable balances are presented on the Consolidated Balance Sheets, net of reserves for losses (refer to Note 3). Card Member receivables also include participation interests purchased from an affiliate. Participation interests in Card Member receivables represent undivided interests in the cash flows of the non-interest-earning Card Member receivables. In conjunction with TRS’ securitization program, Credco, through its wholly owned subsidiary, Credco Receivables Corporation (CRC), purchases participation interests from American Express Receivables Financing Corporation VIII LLC (RFC VIII), a wholly owned subsidiary of TRS that receives undivided, pro rata interests in Card Member receivables transferred to the American Express Issuance Trust (the Charge Trust), by TRS. The Charge Trust is a special purpose entity that is consolidated by TRS.

Card Member receivables as of December 31, 2018 and 2017 consisted of:

(Millions)		2018		2017
Global Consumer Services Group^(a)	$	8,485	$	5,384
Global Commercial Services^(b)		16,111		14,892
Card Member receivables^(c)		24,596		20,276
Less: Reserve for losses		167		145
Card Member receivables, net^(d)	$	24,429	$	20,131

Comprised of U.S. and International Consumer Services.
Comprised of Corporate and Small Business Services.
Net of deferred discount revenue totaling $68 million and $43 million as of December 31, 2018 and 2017, respectively.
Card Member receivables modified in a troubled debt restructuring (TDR) program were immaterial.

Card Member Loans

Card Member loans represent revolving amounts due on American Express cards. For American Express lending card products, these Card Member loans are recorded at the time a Card Member enters into a point-of-sale transaction with a merchant, as well as amounts due from charge Card Members who utilize the Pay Over Time features on their account and elect to revolve a portion of the outstanding balance by entering into a revolving payment arrangement with American Express. These loans have a range of terms such as credit limits, interest rates, fees and payment structures, which can be revised over time based on new information about Card Members and in accordance with applicable regulations and the respective product’s terms and conditions. Card Members holding revolving loans are typically required to make monthly payments based on pre-established amounts and the amounts that Card Members choose to revolve are subject to finance charges.

Credco records these Card Member loans at the time they are purchased from TRS and certain of its subsidiaries that issue the card (card issuers). Card Member loans are presented on the Consolidated Balance Sheets, net of reserves for losses (refer to Note 3), and include principal and any related accrued interest and fees. American Express’ policy generally is to cease accruing interest on a Card Member loan at the time the account is written off, and establish reserves for interest that will not be collected.

Card Member loans as of December 31, 2018 and 2017 consisted of:

(Millions)		2018		2017
Global Consumer Services Group^(a)	$	641	$	561
Less: Reserve for losses		5		5
Card Member loans, net^(b)	$	636	$	556

Comprised of International Consumer Services.
Card Member loans modified in a TDR program were immaterial.

Card Member Receivables and Card Member Loans Aging

Generally, a Card Member account is considered past due if payment is not received within 30 days after the billing statement date. The following table presents the aging of Card Member receivables and Card Member loans as of December 31, 2018 and 2017:

				30-59		60-89
				Days		Days		90+ Days
2018(Millions)		Current		Past Due		Past Due		Past Due		Total
Card Member Receivables:
Global Consumer Services Group	$	8,432	$	17	$	12	$	24	$	8,485
Global Commercial Services
Global Small Business Services		1,787		7		4		7		1,805
Global Corporate Payments^(a)		(b)		(b)		(b)		103		14,306
Card Member Loans:
Global Consumer Services Group	$	636	$	2	$	1	$	2	$	641

				30-59		60-89
				Days		Days		90+ Days
2017(Millions)		Current		Past Due		Past Due		Past Due		Total
Card Member Receivables:
Global Consumer Services Group	$	5,336	$	18	$	11	$	19	$	5,384
Global Commercial Services
Global Small Business Services		1,397		5		4		6		1,412
Global Corporate Payments^(a)		(b)		(b)		(b)		112		13,480
Card Member Loans:
Global Consumer Services Group	$	557	$	1	$	1	$	2	$	561

For Global Corporate Payments Card Member receivables in Global Commercial Services, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if collection procedures are initiated on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b).
Delinquency data for periods other than 90 days past billing is not available due to system constraints. Therefore, such data has not been utilized for risk management purposes. The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.

Credit Quality Indicators for Card Member Receivables and Card Member Loans

The following tables present the key credit quality indicators as of or for the years ended December 31:

	2018				2017
			30+ Days				30+ Days
	Net		Past Due		Net		Past Due
	Write-off		as a % of		Write-off		as a % of
	Rate	^(a)	Total		Rate	^(a)	Total
Card Member Receivables:
Global Consumer Services Group	1.14	%	0.62	%	1.01	%	0.89	%
Global Small Business Services	1.34	%	1.00	%	1.11	%	1.06	%
Card Member Loans:
Global Consumer Services Group	1.03	%	0.78	%	1.24	%	0.71	%

	2018				2017
	Net Loss		90+ Days		Net Loss		90+ Days
	Ratio as a		Past		Ratio as a		Past
	% of		Billing		% of		Billing
	Charge		as a % of		Charge		as a % of
	Volume	^(b)	Receivables		Volume	^(b)	Receivables
Card Member Receivables:
Global Corporate Payments	0.08	%	0.72	%	0.08	%	0.83	%

Represents the amount of Card Member receivables or Card Member loans owned by Credco that are written off, net of recoveries, expressed as a percentage of the average Card Member receivables or Card Member loans balances in each of the periods indicated.
Represents the amount of Card Member receivables owned by Credco that are written off, net of recoveries, expressed as a percentage of the volume of Card Member receivables purchased by Credco in each of the periods indicated.

Refer to Note 3 for additional indicators, including external environmental qualitative factors, management considers in its monthly evaluation process for reserves for losses.