Reserves for Losses

9 Months Ended

Sep. 30, 2019

Reserves for Losses

Reserves for losses relating to Card Member receivables and Card Member 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 ended September 30:


(Millions)	2019		2018
Balance, January 1	$	167	$	145
Provisions	160		186
Other credits ^(a)	13		51
Net write-offs ^(b)	(166)		(173)
Other debits ^(c)	(6)		(26)
Balance, September 30	$	168	$	183

(a)Primarily reserve balances related to new groups of, and participation interests in, Card Member receivables purchased from affiliates, totaling $2.7 billion and $9.7 billion for the nine months ended September 30, 2019 and 2018, respectively.

(b)Net of recoveries of $94 million and $84 million for the nine months ended September 30, 2019 and 2018, respectively.

(c)Primarily reserve balances related to participation interests in Card Member receivables sold to an affiliate. Participation interests in Card Member receivables sold totaled $1.1 billion and $4.5 billion for the nine months ended September 30, 2019 and 2018, 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 ended September 30:


(Millions)	2019		2018
Balance, January 1	$	5	$	5
Provisions	10		4
Net write-offs ^(a)	(7)		(4)
Balance, September 30	$	8	$	5

(a)Net of recoveries of $1.0 million for both the nine months ended September 30, 2019 and 2018.