10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File No. 1-6908

AMERICAN EXPRESS CREDIT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	11-1988350
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
World Financial Center
200 Vesey Street
New York, New York	10285
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number including area code: (866) 572-4944

None

(Former name, former address and former fiscal year, if changed since last report.)

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND HAS THEREFORE OMITTED CERTAIN ITEMS FROM THIS REPORT IN ACCORDANCE WITH THE REDUCED DISCLOSURE FORMAT PERMITTED UNDER GENERAL INSTRUCTIONS H(2).

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at November 9, 2011
Common Stock (par value $.10 per share)	1,504,938 Shares

AMERICAN EXPRESS CREDIT CORPORATION

FORM 10-Q

INDEX

Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income and Retained Earnings — Three and Nine Months Ended September 30, 2011 and 2010	1
Consolidated Balance Sheets — September 30, 2011 and December 31, 2010	2
Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2011 and 2010	3
Notes to Consolidated Financial Statements
Note 1 — Basis of Presentation	4
Note 2 — Fair Values	4
Note 3 — Cardmember Receivables and Loans	7
Note 4 — Reserves for Losses	9
Note 5 — Comprehensive Income (Loss)	11
Note 6 — Derivatives and Hedging Activities	11
Note 7 — Variable Interest Entity	16
Note 8 — Income Taxes	16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 4. Controls and Procedures	28
Part II. Other Information
Item 1A. Risk Factors	29
Item 6. Exhibits	29
Signatures	30
Exhibit Index	E-1
EX-12.1
EX-12.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN EXPRESS CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

AND RETAINED EARNINGS

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Millions)	2011			2010			2011			2010
Revenues
Discount revenue earned from purchased cardmember receivables and loans	$	88		$	87		$	321		$	319
Interest income from affiliates		128			119			376			339
Interest income from investments		2			9			4			28
Finance revenue		9			10			28			30
Total revenues		227			225			729			716
Expenses
Provisions for losses		(8	)		11			43			85
Interest expense		181			158			510			416
Interest expense to affiliates		2			4			9			12
Other, net		(49	)		(20	)		(107	)		(50	)
Total expenses		126			153			455			463
Pretax income		101			72			274			253
Income tax benefit		(18	)		(10	)		(21	)		(16	)
Net income		119			82			295			269
Retained earnings at beginning of period		3,515			3,500			3,496			3,408
Dividends		(607	)		(92	)		(764	)		(187	)
Retained earnings at end of period	$	3,027		$	3,490		$	3,027		$	3,490

See Notes to Consolidated Financial Statements.

1

AMERICAN EXPRESS CREDIT CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,
(Millions, except share data)	2011			2010
Assets
Cash and cash equivalents	$	52		$	988
Cardmember receivables, less reserves: 2011, $72; 2010, $112		12,595			12,261
Cardmember loans, less reserves: 2011, $6; 2010, $9		382			371
Loans to affiliates		10,185			10,987
Deferred charges and other assets		388			627
Due from affiliates		6,446			3,987
Total assets	$	30,048		$	29,221
Liabilities and Shareholder’s Equity
Liabilities
Short-term debt	$	839		$	645
Short-term debt to affiliates		3,916			3,781
Long-term debt		20,953			18,983
Total debt		25,708			23,409
Due to affiliates		779			1,742
Accrued interest and other liabilities		467			507
Total liabilities		26,954			25,658
Shareholder’s Equity
Common stock, $.10 par value, authorized 3 million shares; issued and outstanding 1.5 million shares		—			—
Additional paid-in-capital		162			162
Retained earnings		3,027			3,496
Accumulated other comprehensive income (loss):
Foreign currency translation adjustments, net of tax: 2011, $11; 2010, $49		(94	)		(95	)
Net unrealized derivative losses, net of tax: 2011, $—; 2010, $—		(1	)		—
Total accumulated other comprehensive income (loss)		(95	)		(95	)
Total shareholder’s equity		3,094			3,563
Total liabilities and shareholder’s equity	$	30,048		$	29,221

See Notes to Consolidated Financial Statements.

2

AMERICAN EXPRESS CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended September 30 (Millions)	2011			2010
Cash Flows from Operating Activities
Net income	$	295		$	269
Adjustments to reconcile net income to net cash provided by operating activities:
Provisions for losses		43			85
Amortization and other		3			23
Deferred taxes		(22	)		100
Changes in operating assets and liabilities:
Due from affiliates, net		25			(43	)
Other operating assets and liabilities		372			154
Net cash provided by operating activities		716			588
Cash Flows from Investing Activities
Net increase in cardmember receivables and loans		(343	)		(2,975	)
Maturities of investments		—			175
Net decrease (increase) in loans to affiliates		689			(1	)
Net (increase) decrease in due from affiliates		(3,505	)		209
Net cash used in investing activities		(3,159	)		(2,592	)
Cash Flows from Financing Activities
Net increase in short-term debt to affiliates		127			1,100
Net increase (decrease) in short-term debt		197			(90	)
Issuance of long-term debt		7,322			2,396
Principal payments on long-term debt		(5,371	)		(1,515	)
Dividends paid		(764	)		(187	)
Net cash provided by financing activities		1,511			1,704
Effect of exchange rate changes on cash and cash equivalents		(4	)		4
Net decrease in cash and cash equivalents		(936	)		(296	)
Cash and cash equivalents at beginning of period		988			304
Cash and cash equivalents at end of period	$	52		$	8

See Notes to Consolidated Financial Statements.

3

AMERICAN EXPRESS CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

American Express Credit Corporation (Credco), together with its subsidiaries, is a wholly-owned subsidiary of American Express Travel Related Services Company, Inc. (TRS), which is a wholly-owned subsidiary of American Express Company (American Express). American Express charge cards and American Express credit cards are collectively referred to herein as the Card.

Credco is engaged in the business of financing non-interest-bearing cardmember receivables arising from the use of the American Express^® Card, the American Express^® Gold Card, Platinum Card^®, Corporate Card and other American Express cards issued in the United States and in certain countries outside the United States. Credco also finances certain interest-bearing and discounted revolving loans generated by cardmember spending on American Express credit cards issued in non-U.S. markets, although interest-bearing and revolving loans are primarily funded by subsidiaries of TRS other than Credco.

Credco executes material transactions with its affiliates. The agreements between Credco and its affiliates provide that the parties intend that the transactions thereunder be conducted on an arm’s length basis; however, there can be no assurance that the terms of these arrangements are the same as would be negotiated between independent, unrelated parties.

American Express provides Credco with financial support with respect to maintenance of its minimum overall 1.25 fixed charge coverage ratio, which is achieved by adjusting the discount rates on the purchases of receivables Credco makes from, and the interest rates on the loans Credco provides to, TRS and other American Express subsidiaries. Each monthly period, the discount and interest rates are adjusted to generate income for Credco that is sufficient to maintain its minimum fixed charge coverage ratio.

The accompanying Consolidated Financial Statements should be read in conjunction with the financial statements included in the Annual Report on Form 10-K (Form 10-K) of Credco for the year ended December 31, 2010. Significant accounting policies disclosed therein have not changed.

The interim consolidated financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial position and the consolidated results of operations for the interim periods have been made. All adjustments made were of a normal, recurring nature. Results of operations reported for interim periods are not necessarily indicative of results for the entire year.

Accounting estimates are an integral part of the Consolidated Financial Statements. These estimates are based, in part, on management’s assumptions concerning future events. Among the more significant assumptions are those that relate to reserves for cardmember losses relating to cardmember receivables and loans, fair value measurement and income taxes. These accounting estimates reflect the best judgment of management, but actual results could differ.

2. Fair Values

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date, and is based on Credco’s principal or most advantageous market for the specific asset or liability.

U.S. generally accepted accounting principles (GAAP) provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

• Level 1 — Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

- Quoted prices for similar assets or liabilities in active markets

- Quoted prices for identical or similar assets or liabilities in markets that are not active

- Inputs other than quoted prices that are observable for the asset or liability

- Inputs that are derived principally from or corroborated by observable market data by correlation or other means

4

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

• Level 3 — Inputs that are unobservable and reflect Credco’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).

Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes Credco’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by GAAP’s valuation hierarchy as Level 2 (as described in the preceding paragraphs), as of September 30, 2011 and December 31, 2010:

(Millions)	2011		2010
Assets:
Derivatives(a)	$	668	$	498
Total assets	$	668	$	498
Liabilities:
Derivatives(a)	$	127	$	81
Total liabilities	$	127	$	81

(a) Refer to Note 6 for the fair values of derivative assets and liabilities on a further disaggregated basis as well as the netting of both (i) cash collateral received or posted under credit support agreements and (ii) derivative assets and derivative liabilities under master netting agreements. These balances have been presented gross in the table above.

Credco did not measure any financial instruments at fair value using significantly unobservable inputs (Level 3) during the nine months ended September 30, 2011 or during the year ended December 31, 2010 nor were there transfers between levels of the valuation hierarchy during those periods.

GAAP requires disclosure of the estimated fair value of all financial instruments. A financial instrument is defined as cash, evidence of an ownership in an entity, or a contract between two entities to deliver cash or another financial instrument or to exchange other financial instruments. The disclosure requirements for the fair value of financial instruments exclude leases, equity method investments, affiliate investments, pension and benefit obligations, insurance contracts and all non-financial instruments.

Valuation Techniques Used in Measuring Fair Value

For the financial assets and liabilities measured at fair value on a recurring basis (categorized in the valuation hierarchy table above), Credco applies the following valuation techniques to measure fair value:

Derivative Financial Instruments

The fair value of Credco’s derivative financial instruments, which could be presented as either assets or liabilities on the Consolidated Balance Sheets, is estimated either by third-party valuation services that use proprietary pricing models or by internal pricing models. The pricing models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgment, and inputs to those models are readily observable from actively quoted markets. The pricing models used are consistently applied and reflect the contractual terms of the derivatives, including the period of maturity, and market-based parameters such as interest rates, foreign exchange rates, equity indices or prices, and volatility.

Credit valuation adjustments are necessary when the market parameters, such as a benchmark curve, used to value derivatives are not indicative of the credit quality of Credco or its counterparties. Credco considers the counterparty credit risk by applying an observable forecasted default rate to the current exposure, which is adjusted by agreements to exchange collateral and/or net derivative assets and derivative liabilities, as applicable. Refer to Note 6 for additional fair value information.

5

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Financial Assets and Financial Liabilities Carried at Other Than Fair Value

The following table discloses the estimated fair value for Credco’s financial assets and financial liabilities that are not carried at fair value as of September 30, 2011 and December 31, 2010:

	2011				2010
	Carrying		Fair		Carrying		Fair
(Billions)	Value		Value		Value		Value
Financial Assets:
Assets for which carrying values equal or approximate fair value	$	19	$	19	$	18	$	18
Loans to affiliates	$	10	$	10	$	11	$	11
Financial Liabilities:
Liabilities for which carrying values equal or approximate fair value	$	6	$	6	$	7	$	7
Long-term debt	$	21	$	21	$	19	$	19

The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as of September 30, 2011 and December 31, 2010, and require management judgment. These figures may not be indicative of their future fair values. The fair value of Credco cannot be reliably estimated by aggregating the amounts presented.

The following methods were used to determine estimated fair values:

Financial Assets for Which Carrying Values Equal or Approximate Fair Value

Financial assets for which carrying values equal or approximate fair value include cash and cash equivalents, cardmember receivables, cardmember loans, due from affiliates, accrued interest and certain other assets. For these assets, the carrying values approximate fair value because they are short term in duration or variable rate in nature.

Financial Assets Carried at Other Than Fair Value

Loans to affiliates

Loans to affiliates are recorded at historical cost on the Consolidated Balance Sheets. Fair value is estimated based on either the fair value of the underlying collateral or the terms implicit in the loan agreements as compared with current market terms for similar loans.

Financial Liabilities for Which Carrying Values Equal or Approximate Fair Value

Financial liabilities for which carrying values equal or approximate fair value include short-term debt, short-term debt to affiliates, accrued interest, and certain other liabilities for which the carrying values approximate fair value because they are short term in duration, variable rate in nature or have no defined maturity.

Financial Liabilities Carried at Other Than Fair Value

Long-term debt

Long-term debt is recorded at historical issuance cost on the Consolidated Balance Sheets. Fair value is estimated using either quoted market prices or discounted cash flows based on Credco’s current borrowing rates for similar types of borrowings.

6

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

3. Cardmember Receivables and Loans

Cardmember Receivables

Cardmember receivables representing amounts due from American Express charge payment product customers, are recorded at the time a cardmember enters into a point-of-sale transaction with a merchant. Each charge card transaction is authorized based on its likely economics reflecting a cardmember’s most recent credit information and spend patterns. Global limits are established to limit the maximum exposure for American Express from high risk and some high spend charge cardmembers and accounts of high risk, out of pattern charge cardmembers can be monitored even if they are current. Charge card customers generally must pay the full amount billed each month.

Credco records these cardmember receivables at the time they are purchased from TRS and certain of its subsidiaries that issue the Card (card issuers). Cardmember receivable balances are presented on the Consolidated Balance Sheets, net of reserves for losses (refer to Note 4), and typically include principal and any related accrued fees. Cardmember receivables also include participation interests purchased from an affiliate. Participation interests in cardmember receivables represent undivided interests in the cash flows of the non-interest-bearing cardmember receivables and are purchased without recourse by Credco Receivables Corporation (CRC), which is a wholly-owned subsidiary of Credco, from American Express Receivables Financing Corporation V LLC (RFC V). As of September 30, 2011 and December 31, 2010, CRC owned approximately $3.2 billion and $3.7 billion, respectively, of participation interests in cardmember receivables purchased from RFC V.

Cardmember receivables as of September 30, 2011 and December 31, 2010 consisted of:

(Millions)	2011		2010
U.S. Consumer and Small Business Services	$	2,974	$	3,497
International and Global Commercial Services(a)		9,693		8,876
Cardmember receivables, gross		12,667		12,373
Less: Cardmember receivables reserve for losses		72		112
Cardmember receivables, net(b)	$	12,595	$	12,261

(a)	International is comprised of consumer and small business services.
(b)	Cardmember receivables modified in a troubled debt restructuring (TDR) program were immaterial.

Cardmember Loans

Cardmember loans represent amounts due from customers of American Express and certain of its affiliates’ lending payment products. For American Express, these cardmember loans are recorded at the time a cardmember enters into a point-of-sale transaction with a merchant or when a charge card customer enters into an extended payment arrangement. American Express’ lending portfolios primarily include revolving loans to cardmembers obtained through either credit card accounts or the lending on charge feature of their charge card accounts. These loans have a range of terms such as credit limits, interest rates, fees and payment structures, which can be adjusted over time based on new information about cardmembers and in accordance with applicable regulations and the respective product’s terms and conditions. Cardmembers holding revolving loans are typically required to make monthly payments greater than or equal to certain pre-established amounts. The amounts that cardmembers choose to revolve are subject to finance charges. When cardmembers fall behind on their required payments, their accounts are monitored.

Credco records these cardmember loans at the time they are purchased from TRS and certain of its affiliates. Cardmember loans are presented on the Consolidated Balance Sheets, net of reserves for cardmember losses and include accrued interest and fees receivable. Credco’s policy generally is to cease accruing for interest receivable on a cardmember loan at the time the account is written off. Credco establishes reserves for interest that Credco believes will not be collected.

7

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Cardmember loans, consisting of loans in the International card services portfolio, as of September 30, 2011 and December 31, 2010 were as follows:

(Millions)	2011		2010
Cardmember loans, gross	$	388	$	380
Less: Cardmember loans reserve for losses		6		9
Cardmember loans, net(a)	$	382	$	371

(a) Cardmember loans modified in a troubled debt restructuring (TDR) program were immaterial.

Cardmember Receivables and Cardmember Loans Aging

Generally, a cardmember account is considered past due if payment is not received within 30 days after the billing statement date. The following table represents the aging of cardmember receivables and cardmember loans as of September 30, 2011 and December 31, 2010:

				30-59			60-89
				Days			Days			90+ Days
2011 (Millions)	Current			Past Due			Past Due			Past Due		Total
Cardmember Receivables:
U.S. Consumer and Small Business Services	$	2,923		$	24		$	9		$	18	$	2,974
International and Global Commercial Services (a)		(b	)		(b	)		(b	)		72		9,693
Cardmember Loans:
International Card Services (c)	$	377		$	6		$	2		$	3	$	388

				30-59			60-89
				Days			Days			90+ Days
2010 (Millions)	Current			Past Due			Past Due			Past Due		Total
Cardmember Receivables:
U.S. Consumer and Small Business Services	$	3,453		$	18		$	8		$	18	$	3,497
International and Global Commercial Services (a)		(b	)		(b	)		(b	)		76		8,876
Cardmember Loans:
International Card Services (c)	$	367		$	7		$	2		$	4	$	380

(a)	For cardmember receivables in International and Global Commercial Services, delinquency data is tracked based on days past billing status rather than days past due. A cardmember account is considered 90 days past billing if payment has not been received within 90 days of the cardmember’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 cardmember receivable balance is considered as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes.
(b)	Historically, data for periods prior to 90 days past billing are not available due to system constraints. Therefore, it 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.
(c)	Cardmember loans over 90 days past due continue to accrue interest.

8

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Credit Quality Indicators for Cardmember Receivables and Cardmember Loans

The following tables present the key credit quality indicators as of or for the nine months ended September 30:

	2011						2010
				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
U.S. Consumer and Small Business Services — Cardmember Receivables		1.36	%		1.70	%		1.48	%		1.53	%
International Card Services — Cardmember Loans		0.57	%		2.84	%		2.39	%		3.69	%
	2011						2010
	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)(c)	Receivables			Volume		(b)(c)	Receivables
International and Global Commercial Services — Cardmember Receivables		0.04	%		0.74	%		0.13	%		0.80	%

(a)	Credco’s write-offs, net of recoveries, represent the amount of cardmember receivables or cardmember loans owned by Credco that are written off, consisting of principal, interest and/or fees, expressed as a percentage of the average cardmember receivables or cardmember loans balances during the period.
(b)	Credco’s write-offs, net of recoveries, represent the amount of cardmember receivables owned by Credco that are written off, consisting of principal and fees, expressed as a percentage of the volume of cardmember receivables purchased by Credco during the period.
(c)	Effective January 1, 2010, American Express revised the time period in which past due cardmember receivables for its International Card Services and Global Commercial Services segments are written off to 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Consumer and Small Business receivables in the fourth quarter of 2008. Previously, these cardmember receivables were written off when 360 days past billing. Therefore, the net write-offs for the first quarter of 2010 include net write-offs resulting from this write-off methodology change, which decreased the 90 days past billing metrics and increased net loss ratios, but did not have a significant impact on provisions for losses.

Refer to Note 4 for other factors, including external environmental factors, that management considers as part of its evaluation of reserves for losses.

4.	Reserves for Losses
	Reserves for Losses — Cardmember Receivables and Loans
	Reserves for losses relating to cardmember receivables and loans represent management’s best estimate of the losses inherent in Credco’s outstanding portfolios. Credco’s total provisions for losses were $43 million and $85 million for the nine months ended September 30, 2011 and 2010, respectively. Management’s evaluation process requires certain estimates and judgments.
	Reserves for these losses are primarily based upon models that analyze portfolio performance and reflect management’s judgment regarding overall reserve adequacy. The analytic models take into account several factors, including average losses and recoveries over an appropriate historical period. Management considers whether to adjust the analytic models for specific factors such as increased risk in certain portfolios, impact of risk management initiatives on portfolio performance and concentration of credit risk based on factors such as tenure, industry or geographic regions. In addition, management adjusts the reserves for losses on cardmember loans for other external environmental factors including leading economic and market indicators, such as the unemployment rate, Gross Domestic Product (GDP), home price indices, non-farm payrolls, personal consumption expenditures index, consumer confidence index, purchasing managers index, bankruptcy filings and the legal and regulatory environment. Generally, due to the short-term nature of cardmember receivables, the impact of additional external factors on the inherent losses within the

9

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

cardmember receivables portfolio is not significant. As part of this evaluation process, management also considers various reserve coverage metrics, such as reserves as a percentage of past-due amounts, reserves as a percentage of cardmember receivables or loans and net write-off coverage.

Cardmember loans and receivables balances are written off when management deems amounts to be uncollectible and is generally determined by the number of days past due, which is generally no later than 180 days past due. Cardmember loans and receivables in bankruptcy or owed by deceased individuals are written off upon notification. Recoveries are recognized on a cash basis.

Changes in Cardmember Receivables Reserve for Losses

The following table presents changes in the cardmember receivables reserve for losses for the nine months ended September 30:

(Millions)	2011			2010
Balance, January 1	$	112		$	141
Additions:
Cardmember receivables provisions(a)		45			82
Other credits(b)		23			26
Deductions:
Cardmember receivables net write-offs(c)		(92	)		(142	)
Other debits(d)		(16	)		(1	)
Balance, September 30(e)	$	72		$	106

(a)	Represents loss provisions for cardmember receivables consisting of principal (resulting from authorized transactions) and fee reserve components.
(b)	Primarily represents reserve balances applicable to participation interests in cardmember receivables purchased from an affiliate. Participation interests in cardmember receivables purchased from an affiliate totaled $2.7 billion and $2.6 billion for the nine months ended September 30, 2011 and 2010, respectively.
(c)	Represents write-offs consisting of principal (resulting from authorized transactions) and fee components, less recoveries of $74 million and $83 million for the nine months ended September 30, 2011 and 2010, respectively.
(d)	Primarily relates to reserves for losses attributable to participation interests in cardmember receivables sold to an affiliate. Participation interests in cardmember receivables sold to an affiliate totaled $2.2 billion and nil for the nine months ended September 30, 2011 and 2010, respectively.
(e)	Volume of receivables purchased was $130 billion and $115 billion for the nine months ended September 30, 2011 and 2010, respectively.

Changes in Cardmember Loans Reserve for Losses

The following table presents changes in the cardmember loans reserve for losses for the nine months ended September 30:

(Millions)	2011			2010
Balance, January 1	$	9		$	19
Additions:
Cardmember loans provisions(a)		(2	)		3
Deductions:
Cardmember loans net write-offs(b)		(1	)		(9	)
Other debits(c)		—			(3	)
Balance, September 30(d)	$	6		$	10

(a)	Represents loss provisions for cardmember loans consisting of principal (resulting from authorized transactions), interest and fee reserves components.
(b)	Cardmember loans net write-offs include recoveries of $5 million and $7 million for the nine months ended September 30, 2011 and 2010, respectively.
(c)	These amounts include foreign currency translation adjustments.
(d)	Volume of loans purchased was $2 billion for both the nine months ended September 30, 2011 and 2010.

10

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

5.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income and changes in accumulated other comprehensive income (loss) (AOCI), which is a balance sheet item in the Shareholder’s Equity section of Credco’s Consolidated Balance Sheets. AOCI is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. The components of comprehensive income (loss), net of tax, were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Millions)	2011			2010			2011			2010
Net income	$	119		$	82		$	295		$	269
Other comprehensive income (loss):
Net unrealized securities losses		—			(4	)		—			(12	)
Net unrealized derivatives (loss) gains		(1	)		2			(1	)		3
Foreign currency translation adjustments		(150	)		357			1			67
Total	$	(32	)	$	437		$	295		$	327

6.	Derivatives and Hedging Activities
	Credco uses derivative financial instruments (derivatives) to manage exposure to various market risks. Market risk is the risk to earnings or value resulting from movements in market prices. Credco’s market risk exposure is primarily generated by:

• Interest rate risk in its funding activities; and

• Foreign exchange risk in its operations outside the United States.

General principles and the overall framework for managing market risk across American Express and its subsidiaries, including Credco, are defined in the Market Risk Policy, which is the responsibility of the Asset-Liability Committee (ALCO). Market risk limits and escalation triggers in that policy are approved by the ALCO and by the Enterprise-wide Risk Management Committee (ERMC). Market risk is centrally monitored for compliance with policy and limits by the Market Risk Committee, which reports into the ALCO and is chaired by the Chief Market Risk Officer of American Express. Market risk management is also guided by policies covering the use of derivatives, funding and liquidity and investments.

Derivatives derive their value from an underlying variable or multiple variables, including interest rate and foreign exchange rate. These instruments enable end users to increase, reduce or alter exposure to various market risks and, for that reason, are an integral component of Credco’s market risk management. Credco does not engage in derivatives for trading purposes.

Interest rate exposure within Credco’s charge card and fixed-rate lending products is managed by varying the proportion of total funding provided by short-term and variable-rate debt compared to fixed-rate debt. In addition, interest rate swaps are used from time to time to synthetically convert fixed-rate debt obligations to variable-rate obligations or to convert variable-rate debt obligations to fixed-rate obligations. Credco may change the mix between variable-rate and fixed-rate funding based on changes in business volumes and mix, among other factors.

Foreign exchange risk is generated by (i) funding foreign currency cardmember receivables and loans with U.S. dollars and (ii) foreign subsidiary equity and foreign currency earnings in units outside the United States. Credco hedges this market exposure to the extent it is economically justified through various means, including the use of derivatives such as foreign exchange forwards and cross-currency swap contracts, which can help “lock-in” the value of Credco’s exposure to specific currencies. Exposures from foreign subsidiary equity in Credco’s units outside the United States are hedged through various means, including the use of foreign currency debt and foreign exchange forwards executed either by Credco or TRS.

Derivatives may give rise to counterparty credit risk, which is the risk that a derivative counterparty will default on, or otherwise be unable to perform pursuant to, an uncollateralized derivative exposure. Credco manages this risk by considering the current exposure, which is the replacement cost of contracts on the measurement date, as well as

11

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

estimating the maximum potential value of the contracts over the next 12 months, considering such factors as the volatility of the underlying or reference index. To mitigate derivative credit risk, counterparties are required to be pre-approved and rated as investment grade. Counterparty risk exposures are monitored by American Express’ Institutional Risk Management Committee (IRMC). The IRMC formally reviews large institutional exposures to ensure compliance with American Express’ ERMC guidelines and procedures and determines the risk mitigation actions, when necessary. Additionally, in order to mitigate the bilateral counterparty credit risk associated with derivatives, Credco has in certain instances entered into master netting agreements with its derivative counterparties that provide a right of offset for certain exposures between the parties. To further mitigate bilateral counterparty credit risk, during the third quarter of 2011 Credco exercised its rights under executed credit support agreements with certain of its derivative counterparties. These agreements require that, in the event the fair value change in the net derivatives position between the two parties exceeds certain dollar thresholds, the party in the net liability position posts collateral to its counterparty.

In relation to Credco’s credit risk, under the terms of the derivative agreements it has with its various counterparties, Credco is not required to either immediately settle any outstanding liability balances or post collateral upon the occurrence of a specified credit risk-related event. As of September 30, 2011 and December 31, 2010, the counterparty credit risk associated with Credco’s derivatives was not significant.

Credco’s derivatives are carried at fair value on the Consolidated Balance Sheets. The accounting for changes in fair value depends on the instruments’ intended use and the resulting hedge designation, if any, as discussed below. Refer to Note 2 for a description of Credco’s methodology for determining the fair value of its derivatives.

The following table summarizes the total gross fair value, excluding interest accruals, of derivative assets and liabilities as of September 30, 2011 and December 31, 2010:

	Deferred Charges and						Accrued Interest and
	Other Assets						Other Liabilities
	Fair Value						Fair Value
(Millions)	2011			2010			2011			2010
Derivatives designated as hedging instruments:
Interest rate contracts
Fair value hedges	$	530		$	444		$	2		$	38
Cash flow hedges		—			2			1			2
Foreign exchange contracts
Net investment hedges		79			—			—			16
Total derivatives designated as hedging instruments	$	609		$	446		$	3		$	56
Derivatives not designated as hedging instruments:
Interest rate contracts	$	1		$	1		$	3		$	3
Foreign exchange contracts		58			51			121			22
Total derivatives not designated as hedging instruments	$	59		$	52		$	124		$	25
Total derivatives gross	$	668		$	498		$	127		$	81
Cash collateral netting(a)		(345	)		—			—			—
Derivative asset and derivative liability netting(a)		(11	)		(1	)		(11	)		(1	)
Total derivatives, net	$	312		$	497		$	116		$	80

(a) As permitted under GAAP, balances represent the netting of cash collateral received and posted under credit support agreements, and the netting of derivative assets and derivative liabilities under master netting agreements.

Derivative Financial Instruments that Qualify for Hedge Accounting

Derivatives executed for hedge accounting purposes are documented and designated as such when Credco enters into the contracts. In accordance with its risk management policies, Credco structures its hedges with very similar terms to the hedged items. Credco formally assesses, at inception of the hedge accounting relationship and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the fair value or cash flows of the hedged

12

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

items. These assessments usually are made through the application of a regression analysis method. If it is determined that a derivative is not highly effective as a hedge, Credco will discontinue the application of hedge accounting.

Fair Value Hedges

A fair value hedge involves a derivative designated to hedge Credco’s exposure to future changes in the fair value of an asset or a liability, or an identified portion thereof that is attributable to a particular risk. Credco is exposed to interest rate risk associated with its fixed-rate long-term debt. Credco uses interest rate swaps to synthetically convert certain fixed-rate long-term debt obligations to floating-rate obligations at the time of issuance. As of September 30, 2011 and December 31, 2010, Credco hedged $10.6 billion and $8.9 billion, respectively, of its fixed-rate debt to floating-rate debt using interest rate swaps.

To the extent the fair value hedge is effective, the gain or loss on the hedging instrument offsets the loss or gain on the hedged item attributable to the hedged risk. Any difference between the changes in the fair value of the derivative and the hedged item is referred to as hedge ineffectiveness and is reflected in earnings as a component of other, net expenses. Hedge ineffectiveness may be caused by differences between the debt’s interest coupon and the benchmark rate, which are primarily due to credit spreads at inception of the hedging relationship that are not reflected in the valuation of the interest rate swap. Furthermore, hedge ineffectiveness may be caused by changes in the relationship between 3-month LIBOR and 1-month LIBOR rates, as these so-called basis spreads may impact the valuation of the interest rate swap without causing an offsetting impact in the value of the hedged debt. If a fair value hedge is de-designated or no longer considered to be effective, changes in fair value of the derivative continue to be recorded through earnings but the hedged asset or liability is no longer adjusted for changes in fair value due to changes in interest rates. The existing basis adjustment of the hedged asset or liability is then amortized or accreted as an adjustment to yield over the remaining life of that asset or liability.

The following table summarizes the impact on the Consolidated Statements of Income and Retained Earnings associated with Credco’s hedges of fixed-rate long-term debt:

For the Three Months Ended September 30:

(Millions)	Gains (losses) recognized in income
	Derivative contract					Hedged item							Net hedge
		Amount					Amount						ineffectiveness
Derivative Relationship	Location	2011		2010		Location	2011			2010			2011		2010
Interest rate contracts	Other, net expenses	$	108	$	100	Other, net expenses	$	(97	)	$	(106	)	$	11	$	(6	)

For the Nine Months Ended September 30:

(Millions)	Gains (losses) recognized in income
	Derivative contract					Hedged item							Net hedge
		Amount					Amount						ineffectiveness
Derivative Relationship	Location	2011		2010		Location	2011			2010			2011		2010
Interest rate contracts	Other, net expenses	$	121	$	300	Other, net expenses	$	(118	)	$	(286	)	$	3	$	14

Credco also recognized a net reduction in interest expense on long-term debt and other of $65 million and $63 million for the three months ended September 30, 2011 and 2010, respectively, primarily related to the net settlements (interest accruals) on Credco’s interest rate derivatives designated as fair value hedges. For the nine months ended September 30, 2011 and 2010, the impact on interest expense was a net reduction in interest expense on long-term debt and other of $191 million and $192 million, respectively.

13

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Cash Flow Hedges

A cash flow hedge involves a derivative designated to hedge Credco’s exposure to variable future cash flows attributable to a particular risk. Such exposures may relate to either an existing recognized asset or liability, or a forecasted transaction. Credco hedges existing long-term variable-rate debt, the rollover of short-term borrowings and the anticipated forecasted issuance of additional funding through the use of derivatives, primarily interest rate swaps. These derivative instruments synthetically convert floating-rate debt obligations to fixed-rate obligations for the duration of the instrument. As of September 30, 2011 and December 31, 2010, Credco hedged $0.3 billion and $0.8 billion, respectively, of its floating-rate debt using interest rate swaps.

For derivatives designated as cash flow hedges, the effective portion of the gain or loss on the derivatives is recorded in AOCI and reclassified into earnings when the hedged cash flows are recognized in earnings. The amount that is reclassified into earnings is presented in the Consolidated Statements of Income and Retained Earnings in the same line item in which the hedged instrument or transaction is recognized, primarily in interest expense. Any ineffective portion of the gain or loss on the derivatives is reported as a component of other, net expenses. If a cash flow hedge is de-designated or terminated prior to maturity, the amount previously recorded in AOCI is recognized into earnings over the period that the hedged item impacts earnings. If a hedge relationship is discontinued because it is probable that the forecasted transaction will not occur according to the original strategy, any related amounts previously recorded in AOCI are recognized into earnings immediately.

In the normal course of business, as the hedged cash flows are recognized into earnings, Credco expects to reclassify $1 million of net pretax losses on derivatives from AOCI into earnings during the next 12 months.

The following table summarizes the impact of cash flow hedges on the Consolidated Statements of Income and Retained Earnings:

For the Three Months Ended September 30:

(Millions)	Gains (losses) recognized in income
		Amount
		reclassified from						Net hedge
		AOCI into income						ineffectiveness
	Location	2011		2010			Location	2011		2010
Cash flow hedges:(a)
Interest rate contracts	Interest expense	$	—	$	(1	)	Other, net expenses	$	—	$	—

For the Nine Months Ended September 30:

(Millions)	Gains (losses) recognized in income
		Amount
		reclassified from							Net hedge
		AOCI into income							ineffectiveness
	Location	2011			2010			Location	2011		2010
Cash flow hedges:(a)
Interest rate contracts	Interest expense	$	(1	)	$	(3	)	Other, net expenses	$	—	$	—

(a) During the three and nine months ended September 30, 2011 and 2010, there were no forecasted transactions that were considered no longer probable to occur.

Net Investment Hedges

A net investment hedge is used to hedge future changes in currency exposure of a net investment in a foreign operation. Credco primarily designates foreign currency derivatives, typically foreign exchange forwards, and on occasion foreign currency denominated debt, as hedges of net investments in certain foreign operations. These instruments reduce exposure to changes in currency exchange rates on Credco’s investments in non-U.S. subsidiaries. The effective portion of the gain or loss on net investment hedges recorded in AOCI, as part of the cumulative translation adjustment, was $64 million and $(18) million for the three months ended September 30, 2011 and 2010, respectively. For the nine months ended September 30, 2011 and 2010, the effective portion of the gain or loss on net

14

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

investment hedges was $26 million and $(47) million, respectively. Any ineffective portion of the gain or loss on net investment hedges is recognized in other, net expenses during the period of change. No ineffectiveness or other amounts were reclassified from AOCI into income for the nine months ended September 30, 2011 or 2010.

Derivatives Not Designated as Hedges

Credco has derivatives that act as economic hedges, but are not designated for hedge accounting purposes. Foreign currency transactions and non-U.S. dollar cash flow exposures from time to time may be partially or fully economically hedged through foreign currency contracts, primarily foreign exchange forwards, options and cross-currency swaps. These hedges generally mature within one year. Foreign currency contracts involve the purchase and sale of a designated currency at an agreed upon rate for settlement on a specified date. The changes in the fair value of the derivatives effectively offset the related foreign exchange gains or losses on the underlying balance sheet exposures. From time to time, Credco may enter into interest rate swaps to specifically manage funding costs related to American Express’ proprietary card business.

For derivatives that are not designated as hedges, changes in fair value are reported in current period earnings.

The following table summarizes the impact of derivatives not designated as hedges on the Consolidated Statements of Income and Retained Earnings:

For the Three Months Ended September 30:

(Millions)	Gains (losses) recognized in income
		Amount
	Location	2011			2010
Foreign exchange contracts	Other, net expenses	$	(6	)	$	105
Total		$	(6	)	$	105

For the Nine Months Ended September 30:

(Millions)	Gains (losses) recognized in income
		Amount
	Location	2011		2010
Interest rate contracts	Other, net expenses	$	—	$	1
Foreign exchange contracts	Other, net expenses		6		83
	Interest expense		—		43
Total		$	6	$	127

15

AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

7.

Variable Interest Entity

Credco has established a variable interest entity (VIE), American Express Canada Credit Corporation (AECCC), used primarily to loan funds to affiliates. Credco has a shelf registration in Canada for a medium-term note program providing for the issuance of notes by AECCC. All notes issued under this program are fully guaranteed by Credco. These medium-term note issuances are the primary source of financing loans to the Canadian affiliate. Credco is considered the primary beneficiary of the entity and owns all of the outstanding voting interests and therefore, consolidates the entity in accordance with accounting guidance governing consolidation of VIEs. Total assets as of both September 30, 2011 and December 31, 2010 were $2.4 billion and are eliminated in consolidation. Total liabilities as of both September 30, 2011 and December 31, 2010 were $2.3 billion and are primarily recorded in long-term debt. As of September 30, 2011 and December 31, 2010, $123 million and $501 million, respectively, of liabilities were eliminated in consolidation. The assets of the VIE are not used solely to settle the obligations of the VIE. The note holders of the VIE have recourse to Credco.

8.	Income Taxes
	The results of operations of Credco are included in the consolidated U.S. federal income tax return of American Express. Under an agreement with TRS, provision for income taxes is recognized on a separate company basis. If benefits for net operating losses, future tax deductions and foreign tax credits cannot be recognized on a separate company basis, such benefits are then recognized based upon a share, derived by formula, of those deductions and credits that are recognizable on a TRS consolidated reporting basis.
	American Express is under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which American Express has significant business operations. The tax years under examination and open for examination vary by jurisdiction. In June 2008, the IRS completed its field examination of American Express’ federal tax returns for the years 1997 through 2002. In July 2009, the IRS completed its field examination of American Express’ federal tax returns for the years 2003 and 2004. In April 2011, unagreed issues for 1997-2004 were resolved at IRS Appeals. Additional refund claims for those years continue to be reviewed by the IRS. In addition, American Express is currently under examination by the IRS for the years 2005 through 2007.
	Credco believes it is reasonably possible that the unrecognized tax benefits could decrease within the next 12 months by as much as $590 million principally as a result of potential resolutions of prior years’ tax items with various taxing authorities. Of the $590 million of unrecognized tax benefits, approximately $580 million relate to amounts recorded to equity that, if recognized, would not impact the effective rate. With respect to the remaining $10 million, it is not possible to quantify the impact such changes may have on the effective tax rate and net income due to the inherent complexities and the number of tax years currently under examination. Resolution of the prior years’ items that comprise this remaining amount could have an impact on the effective tax rate and on net income, either favorably (principally as a result of settlements that are less than the liability for unrecognized tax benefits) or unfavorably (if such settlements exceed the liability for unrecognized tax benefits).
	The following table summarizes Credco’s effective tax rate:

	Three Months Ended			Nine Months Ended			Year ended
	September 30, 2011			September 30, 2011			December 31, 2010
Effective tax rate(a) (b)		(17.8)	%		(7.7)	%		(7.4	)%

(a)	Each of the periods reflects recurring, permanent tax benefits in relation to the level of pretax income and geographic mix of business.
(b)	The income tax provision for the three and nine months ended September 30, 2011, includes the impact of certain discrete state tax items and the impact of the favorable resolution of certain prior years’ tax items. In addition, the income tax provision for the three months ended September 30, 2011, includes the impact of a federal discrete item.

16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

American Express Credit Corporation (Credco), together with its subsidiaries, is a wholly-owned subsidiary of American Express Travel Related Services Company, Inc. (TRS), a wholly-owned subsidiary of American Express Company (American Express).

Credco is engaged in the business of financing non-interest-bearing cardmember receivables arising from the use of the American Express^® Card, the American Express^® Gold Card, Platinum Card^®, Corporate Card and other American Express cards issued in the United States and in certain countries outside the United States. Credco also finances certain interest-bearing and discounted revolving loans generated by cardmember spending on American Express credit cards issued in non-U.S. markets, although interest-bearing and revolving loans are primarily funded by subsidiaries of TRS other than Credco. American Express charge cards and American Express credit cards are collectively referred to herein as the Card.

Certain of the statements in this Form 10-Q report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Refer to the “Forward-Looking Statements” section.

Current Business Environment/Outlook

Credco’s results for the third quarter of 2011 continued to reflect strong spending growth and improved credit performance of the underlying cardmember receivables and loan portfolios at American Express. During the quarter cardmember spending volumes grew both in the United States and outside the United States, and across all of American Express’ businesses, despite a challenging economic environment and when being compared to relatively strong prior year performance.

The improving credit trends contributed to a reduction in write-offs and in loss reserve levels over the course of the third quarter of 2011 when compared to 2010. Reserve coverage ratios remain at appropriate levels.

Despite the continued momentum across American Express’ businesses, the economic environment remains uncertain. The uncertain environment includes questions about the creditworthiness of sovereign issuers within Europe and the strength of the European banking system. Sovereign defaults or the continued concerns about European fiscal policy and unity could lead to disruptions in capital markets and increase borrowing costs for consumers and companies in Europe and the United States.

Results of Operations for the Nine Months Ended September 30, 2011 and 2010

Pretax income depends primarily on the volume of cardmember receivables and loans purchased, the discount factor used to determine purchase price, interest earned, interest expense and the collectibility of cardmember receivables and loans purchased.

Credco’s consolidated net income increased $26 million or 10 percent for the nine months ended September 30, 2011 as compared to the same period in 2010. The year-over-year increase is due to higher interest income from affiliates, lower provision for losses and gains from forward points of foreign exchange contracts, offset by lower interest income from investments and higher interest expenses.

17

The following table summarizes the changes attributable to the increase (decrease) in key revenue and expense accounts for the nine months ended September 30:

(Millions)	2011			2010
Discount revenue earned from purchased cardmember receivables and loans:
Volume of receivables and loans purchased	$	43		$	203
Discount rates		(41	)		(408	)
Total	$	2		$	(205	)
Interest income from affiliates:
Average loans to affiliates	$	28		$	(23	)
Interest rates		9			42
Total	$	37		$	19
Interest income from investments:
Average investments outstanding	$	(21	)	$	(59	)
Interest rates		(3	)		14
Total	$	(24	)	$	(45	)
Finance revenue:
Average cardmember loans outstanding	$	(6	)	$	(1	)
Interest rates		4			(6	)
Total	$	(2	)	$	(7	)
Interest expense:
Average debt outstanding	$	—		$	(23	)
Interest rates		94			(11	)
Total	$	94		$	(34	)
Interest expense to affiliates:
Average debt outstanding	$	(1	)	$	(19	)
Interest rates		(2	)		(7	)
Total	$	(3	)	$	(26	)

Discount revenue earned from purchased cardmember receivables and loans

Discount revenue increased $2 million to $321 million for the nine months ended September 30, 2011, as compared to $319 million for the same period in 2010, due to an increase in the volume of receivables purchased, partially offset by a decrease in discount rates. Volume of receivables purchased for the nine months ended September 30, 2011 increased 13 percent from $115 billion for the same period in 2010 to $130 billion, primarily due to increased cardmember spending. Discount rates, which vary over time due to changes in market interest rates or changes in the collectability of cardmember receivables, decreased an average of 3 basis points from 0.28 percent for the nine months ended September 30, 2010 to 0.25 percent for the nine months ended September 30, 2011.

18

Interest income from affiliates

Interest income from affiliates increased 11 percent or $37 million to $376 million for the nine months ended September 30, 2011, as compared to $339 million for the same period in 2010. The average loan balances with affiliates were $10.8 billion and $10.0 billion for the nine months ended September 30, 2011 and 2010, respectively. The effective annualized interest rate charged to affiliates increased by 12 basis points from 4.52 percent for the nine months ended September 30, 2010 to 4.64 percent for the nine months ended September 30, 2011. The rate increase is driven by an increase in interest rates in the Australian market, a primary component in the rate used in Credco’s loan to its Australian affiliate.

Interest income from investments

Interest income from investments decreased 86 percent or $24 million to $4 million for the nine months ended September 30, 2011, as compared to $28 million for the same period in 2010. The decrease was driven by the maturity of the available-for-sale securities in 2010 and the decrease in interest rates. The total average investment balances, including time deposits, were $0.5 billion and $2.1 billion in the nine months ended September 30, 2011 and 2010, respectively. The effective annual interest rate on investments decreased 75 basis points from 1.76 percent for the nine months ended September 30, 2010 to 1.01 percent for the nine months ended September 30, 2011.

Finance revenue

Finance revenue decreased 7 percent or $2 million to $28 million for the nine months ended September 30, 2011, as compared to $30 million for the same period in 2010. The year-over-year decrease was driven by a decrease in the average loan balance outstanding, partially offset by an increase in average interest rates.

Provisions for losses

The provisions for losses decreased 49 percent or $42 million to $43 million for the nine months ended September 30, 2011, as compared to $85 million for the same period in 2010. The decrease was primarily driven by a change in accounting estimate for certain charge card products.

Interest expense

Interest expense increased 23 percent or $94 million to $510 million for the nine months ended September 30, 2011, as compared to $416 million for the same period in 2010. The increase was primarily driven by an increase in the effective annualized interest rates on long-term debt and by forward points gain of $43 million, which was recorded in interest expense for the first six months in 2010. Effective third quarter of 2010, the forward points gain is recorded in other, net expenses.

Interest expense to affiliates

Interest expense to affiliates decreased 25 percent or $3 million to $9 million for the nine months ended September 30, 2011, as compared to $12 million for the same period in 2010, due to a decrease in interest rates. In addition, average debt outstanding to affiliates decreased by 4 percent to $4.7 billion for the nine months ended September 30, 2011, as compared to $4.9 billion for the same period in 2010. The effective annualized interest rate on average debt due to affiliates as of September 30, 2011 decreased 6 basis points from 0.32 percent in 2010 to 0.26 percent in 2011.

Other, net expenses

Other, net expenses, which was a benefit of $107 million for the nine months ended September 30, 2011, increased $57 million from the previous year’s benefit of $50 million. The increase was primarily due to the reclassification of forward points gain, which was recorded in interest expense for the first six months of 2010. The additional impact of forward points gain for 2011 was $78 million in other, net expenses, offset by a lower hedge ineffectiveness gain of $3 million in 2011, as compared to a gain of $14 million in 2010, and a gain of $10 million in 2010 as a result of recoveries from the investment in the Reserve Primary Fund.

Income taxes

Credco’s effective tax rate for the nine months ended September 30, 2011 and 2010 was (7.7) percent and (6.3) percent, respectively. Each of the periods reflects recurring permanent tax benefits in relation to the level of pretax income. The effective tax rate for the nine months ended September 30, 2011 also includes the impact of certain discrete state tax items, partially offset by the favorable resolution of certain prior years’ tax items. Credco’s effective tax rate reflects the favorable impact of the consolidated tax benefit related to its ongoing funding activities outside the United States.

19

Cardmember Receivables and Cardmember Loans

As of September 30, 2011 and December 31, 2010, Credco owned $12.7 billion and $12.4 billion of gross cardmember receivables, respectively. Cardmember receivables represent amounts due from charge card customers and are recorded at the time they are purchased from the seller. Included in cardmember receivables are Credco Receivable Corporation’s (CRC) purchases of the participation interests from American Express Receivables Financing Corporation V LLC (RFC V) in conjunction with TRS’ securitization program. As of September 30, 2011 and December 31, 2010, CRC owned approximately $3.2 billion and $3.7 billion, respectively, of such participation interests.

Cardmember receivables owned as of September 30, 2011 increased approximately $294 million from December 31, 2010, primarily as a result of an increase in cardmember receivables purchased driven by an increase in average cardmember spending during the nine months ended September 30, 2011.

As of September 30, 2011 and December 31, 2010, Credco owned gross cardmember loans totaling $388 million and $380 million, respectively. These loans consist of certain interest-bearing receivables comprised of American Express and American Express joint venture credit card receivables.

The following table summarizes selected information related to the cardmember receivables portfolio as of or for the nine months ended September 30:

(Millions, except percentages)	2011			2010
Total gross cardmember receivables	$	12,667		$	12,689
Loss reserves — cardmember receivables	$	72		$	106
Loss reserves as a % of receivables		0.6	%		0.8	%
Average life of cardmember receivables (in days)(a)		30			29
U.S. Consumer and Small Business gross cardmember receivables	$	2,974		$	4,003
30 days past due as a % of total		1.7	%		1.5	%
Average receivables	$	3,740		$	3,634
Write-offs, net of recoveries	$	38		$	40
Net write-off rate (b)		1.4	%		1.5	%
International and Global Commercial gross cardmember receivables	$	9,693		$	8,686
90 days past billing as a % of total		0.7	%		0.8	%
Write-offs, net of recoveries (c)	$	54		$	102
Net loss ratio (c)(d)		0.04	%		0.13	%

(a)	Represents the average life of cardmember receivables owned by Credco, based upon the ratio of the average amount of both billed and unbilled receivables owned by Credco at the end of each month, during the years indicated, to the volume of cardmember receivables purchased by Credco.
(b)	Credco’s write-offs, net of recoveries, represent the amount of cardmember receivables owned by Credco that are written off, consisting of principal and fees, expressed as a percentage of the average cardmember receivables balance during the period.
(c)	Effective January 1, 2010, American Express revised the time period in which past due cardmember receivables for its International Card Services and Global Commercial Services segments are written off to 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Consumer and Small Business receivables in the fourth quarter of 2008. Previously, these cardmember receivables were written off when 360 days past billing. Therefore, the net write-offs for the first quarter of 2010 include net write-offs resulting from this write-off methodology change, which decreased the 90 days past billing metrics and increased net loss ratios, but did not have a significant impact on provisions for losses.
(d)	Credco’s write-offs, net of recoveries, represent the amount of cardmember receivables owned by Credco that are written off, consisting of principal and fees, expressed as a percentage of the volume of cardmember receivables purchased by Credco during the period.

20

Reserves for Cardmember Receivables and Cardmember Loans

The following is an analysis of the reserves for cardmember receivables and cardmember loans for the nine months ended September 30:

(Millions)	2011			2010
Balance, January 1	$	121		$	160
Provisions for losses		43			85
Accounts written-off(a)(b)		(93	)		(151	)
Other(c)		7			22
Balance, September 30	$	78		$	116

(a)	Includes recoveries on accounts previously written off of $79 million and $90 million during the nine months ended September 30, 2011 and 2010, respectively.
(b)	Includes $92 million of cardmember receivables net write-offs and $1 million of cardmember loans net write-offs during the nine months ended September 30, 2011. Includes $142 million of cardmember receivable net write-offs and $9 million of cardmember loan net write-offs during the nine months ended September 30, 2010.
(c)	Primarily includes reserve balances applicable to net purchases of participation interests in cardmember receivables purchased from an affiliate.

Loans to Affiliates

Credco’s loans to affiliates represent fixed and floating rate interest-bearing intercompany borrowings by other wholly-owned subsidiaries of TRS. Components of loans to affiliates as of September 30, 2011 and December 31, 2010 were as follows:

(Millions)	2011		2010
TRS Subsidiaries:
American Express Australia Limited	$	3,692	$	3,935
American Express Services Europe Limited		2,815		2,698
Amex Bank of Canada		2,440		2,969
American Express International, Inc.		405		519
American Express Co. (Mexico) S.A. de C.V.		465		483
American Express Bank (Mexico) S.A.		368		383
Total	$	10,185	$	10,987

Due to/from Affiliates

As of September 30, 2011 and December 31, 2010, amounts due to affiliates were $779 million and $1.7 billion, respectively. As of September 30, 2011 and December 31, 2010, amounts due from affiliates were $6.4 billion and $4.0 billion, respectively. These amounts relate primarily to timing differences resulting from the purchase of cardmember receivables and loans, net of remittances from TRS and certain of its subsidiaries, as well as operating activities charged to and by affiliates.

21

Short-term Debt to Affiliates

Short-term debt to affiliates consists primarily of master note agreements for which there is no stated term. Credco does not expect any changes to its short-term funding strategies with affiliates.

Components of short-term debt to affiliates as of September 30, 2011 and December 31, 2010 were as follows:

(Millions)	2011		2010
AE Exposure Management Ltd	$	1,499	$	2,789
American Express Europe Limited		790		100
American Express Company		738		11
American Express Holdings (Netherlands) C.V.		295		295
American Express Swiss Holdings		249		191
National Express Company, Inc.		157		158
Other		188		237
Total	$	3,916	$	3,781

Service Fees to Affiliates

Certain affiliates do not explicitly charge Credco a servicing fee for the servicing of receivables purchased. Instead Credco receives a lower discount rate on the receivables sold to Credco than would be the case if servicing fees were charged explicitly, as the discount rate on receivables purchased by Credco is adjusted to generate income for Credco that is sufficient to maintain its minimum fixed charge coverage ratio. If a servicing fee were charged by these other affiliates from which Credco purchases receivables, servicing fees to affiliates would have been higher by approximately $95 million and $72 million for the nine months ended September 30, 2011 and 2010, respectively. Correspondingly, discount revenue would have increased by approximately the same amounts in these periods.

Capital Resources and Liquidity

Credco’s balance sheet management objectives are to maintain:

• A broad, deep and diverse set of funding sources to finance its assets and meet operating requirements; and

• Liquidity programs that enable Credco to satisfy all maturing financing obligations for at least a 12-month period should some or all of its funding sources become inaccessible.

Funding Strategy

American Express has in place an enterprise-wide Funding Policy. The principal funding objective is to maintain broad and well-diversified funding sources to allow American Express, including Credco, to meet its maturing obligations, cost-effectively finance current and future asset growth, as well as to maintain a strong liquidity profile. The diversity of funding sources by type of debt instrument, by maturity and by investor base, among other factors, provides additional insulation from the impact of disruptions, or from any one type of debt, maturity, or investor. The mix of Credco’s funding in any period will seek to achieve cost-efficiency consistent with both maintaining diversified sources and achieving its liquidity objectives. Credco’s funding strategy and activities are integrated into its asset-liability management activities.

Credco, like many financial services companies, has historically relied on the debt capital markets to fulfill a substantial amount of its funding needs. It has a variety of funding sources available to access the debt capital markets, including senior unsecured debentures and commercial paper. One of the principal tenets of Credco’s funding strategy is to issue debt with a wide range of maturities to distribute its refinancing requirements across future periods. Credco continues to assess its funding needs and investor demand and could change the mix of its existing sources as well as add new sources to its funding mix. Credco’s funding plan is subject to various risks and uncertainties, such as the disruption of financial markets or market capacity and demand for securities offered by Credco as well as any regulatory changes or changes in its long-term or short-term credit ratings. Many of these risks and uncertainties are beyond Credco’s control.

Credco’s funding strategy for 2011 is to raise funds to meet short-term borrowings outstanding, which includes seasonal and other working capital needs and changes in receivables and other asset balances, while maintaining access to a sufficient amount of its own and its affiliates’ cash and readily-marketable securities that are easily

22

convertible to cash, in order to meet the scheduled maturities of all long-term funding obligations for a 12-month period. Credco has $2.6 billion of unsecured long-term debt that will mature during the next 12 months.

Credco’s funding strategy is designed, among other things, to maintain appropriate and stable unsecured debt ratings from the major credit rating agencies, including Moody’s, S&P, Fitch Ratings (Fitch) and Dominion Bond Rating Service (DBRS). Such ratings support Credco’s access to cost effective unsecured funding as part of its overall financing programs.

Credco’s short-term ratings, long-term ratings and outlook as disclosed by the four major credit rating agencies are as follows:

Credit	Short-Term	Long-Term
Agency	Ratings	Ratings	Outlook
DBRS	R-1 (middle)	A (high)	Stable
Fitch	F1	A+	Stable
Moody’s	Prime-1	A2	Stable
S&P	A-2	BBB+	Stable

A downgrade in Credco’s debt rating could result in higher interest expense on Credco’s unsecured debt, as well as higher fees related to borrowings under its unused lines of credit. In addition to increased funding costs, a decline in credit debt ratings could also reduce Credco’s borrowing capacity in the unsecured term debt and commercial paper markets. The overall level of the funding provided by Credco to other American Express affiliates is impacted by a variety of factors, among them Credco’s ratings. To the extent Credco is subject to a higher cost of funds, whether due to an adverse ratings action or otherwise, the affiliates could continue to use, or could increase their use of, alternative sources of funding for their receivables that offer better pricing. However, downgrades to certain of Credco’s unsecured debt ratings that have occurred over the last several years have not caused a permanent increase in Credco’s borrowing costs or a reduction in its borrowing capacity.

Short-term Funding Programs

Credco’s issuance and sale of commercial paper is utilized for working capital needs, such as managing seasonal variations in receivables balances. The amount of short-term borrowings issued in the future will depend on Credco’s funding strategy, its needs and market conditions. Credco’s commercial paper outstandings were fairly stable throughout 2011. As of September 30, 2011 and December 31, 2010, Credco had $0.8 billion and $0.6 billion of commercial paper outstanding, respectively. The average commercial paper outstanding was $0.7 billion and $0.9 billion during the nine months ended September 30, 2011 and the year ended December 31, 2010, respectively.

Credco’s total back-up liquidity coverage, which includes its undrawn committed bank facilities, was in excess of its net short-term borrowings by 60 percent and 100 percent as of September 30, 2011 and December 31, 2010, respectively. The undrawn committed bank credit facilities were $2.9 billion as of September 30, 2011.

23

The following table presents information relating to Credco’s commercial paper outstanding as of:

(Billions)
Period	Ending		Average		Minimum		Maximum
Q1’11	$	0.8	$	0.7	$	0.4	$	0.9
Q2’11		0.7		0.7		0.5		0.8
Q3’11		0.8		0.7		0.4		0.9
Q1’10		0.9		0.8		0.6		1.0
Q2’10		1.4		0.9		0.8		1.4
Q3’10		0.9		1.0		0.8		1.2
Q4’10		0.6		0.8		0.5		1.0
Q1’09		1.8		3.7		1.4		7.4
Q2’09		1.4		1.5		1.2		2.0
Q3’09		1.1		1.1		0.9		1.3
Q4’09		1.0		0.8		0.6		1.1

Long-term Debt Programs

Long-term debt is raised through the offering of debt securities in the United States and capital markets outside the United States. Long-term debt is generally defined as any debt with an original maturity greater than 12 months.

Credco had the following long-term debt outstanding as of September 30, 2011 and December 31, 2010:

(Billions)	2011		2010
Long-term debt outstanding	$	21.0	$	19.0
Average long-term debt	$	19.1	$	19.0

Credco has the ability to issue debt securities under shelf registrations filed with the Securities and Exchange Commission (SEC). The latest shelf registration statement filed with the SEC is for an unspecified amount of debt securities to be issued. For the nine months ended September 30, 2011, Credco issued $1.9 billion of senior unsecured debt from its U.S. shelf registration, which included $1.3 billion of notes issued during the third quarter of 2011, with a maturity of five years and a coupon of 2.8 percent. As of September 30, 2011 and December 31, 2010, Credco had $11.3 billion and $10.5 billion of debt securities outstanding, respectively, issued under the SEC registration statement.

Credco has established a program for the issuance of debt instruments outside the United States, which is listed on the Luxembourg Stock Exchange. The prospectus for this program was renewed in January 2011 and allows for a maximum aggregate principal amount of debt instruments outstanding at any one time of $50 billion. During the nine months ended September 30, 2011, no notes were issued under this program. As of September 30, 2011 and December 31, 2010, $2.2 billion and $2.6 billion, respectively, were outstanding under this program, of which $2.2 billion and $2.1 billion were issued by Credco, respectively.

Credco has also established a program in Australia for the issuance of debt securities of up to approximately $6.0 billion. During the nine months ended September 30, 2011, no notes were issued under this program. As of September 30, 2011 and December 31, 2010, approximately $5.5 billion and $5.6 billion of notes, respectively, were available for issuance under this program and $447 million and $456 million of notes were outstanding, respectively.

As of September 30, 2011, Credco maintained a shelf registration in Canada for a medium-term note program providing for the issuance, when necessary, of up to approximately $3.4 billion of notes by American Express Canada Credit Corporation (AECCC), an indirect wholly-owned subsidiary of Credco. All notes issued under this shelf registration are guaranteed by Credco. For the nine months ended September 30, 2011, Credco issued C$725 million of senior unsecured debt from its Canadian shelf registration. In addition, on October 4, 2011, Credco issued an incremental C$200 million of senior unsecured debt as part of a reopening of existing C$400 million notes that were issued during the second quarter of 2011, raising the amount of the total note to C$600 million, with a maturity of five

24

years and a coupon of 3.6 percent. As of September 30, 2011 and December 31, 2010, AECCC had $2.1 billion and $1.8 billion, respectively, outstanding under this program. The financial results of AECCC are included in the consolidated financial results of Credco.

The most restrictive limitation on Credco’s ability to pay dividends to its parent imposed by the covenants of debt instruments issued by Credco is the requirement that Credco maintain a minimum consolidated net worth of $50 million. As of September 30, 2011, management believes Credco is in compliance with all restrictive covenants contained in its debt agreements. During the nine months ended September 30, 2011, Credco paid $764 million cash dividends to TRS. There are no significant covenant restrictions on the ability of Credco to obtain funds from its subsidiaries by dividend or loan. Additionally, there are no limitations on the amount of debt that can be issued by Credco, provided it maintains the minimum required fixed charge coverage ratio of 1.25.

Liquidity

General principles and the overall framework for managing liquidity risk across American Express on an enterprise-wide basis are set out in American Express’ Liquidity Risk Policy. The liquidity objective is to maintain access to a diverse set of on and off-balance sheet sources of liquidity, such that American Express and its subsidiaries, including Credco, can continuously meet expected financing obligations and business requirements, even in the event they are unable to raise new funds under their regular funding programs.

Credco manages this objective by regularly accessing capital through its various funding programs, as well as by maintaining a variety of contingent sources of cash and financing, such as access to securitizations of cardmember receivables through sales of receivables to TRS for securitization by RFC V and AEIT, as well as committed bank facilities.

Credco incurs and accepts liquidity risk arising in the normal course of its activities. The liquidity risks that American Express, including Credco, is exposed to can arise from a variety of sources, and thus the enterprise-wide liquidity management strategy includes a variety of parameters, assessments and guidelines, including but not limited to:

• Maintaining a diversified set of funding sources (refer to the Funding Strategy section for more detail);

• Maintaining unencumbered liquid assets and off-balance sheet liquidity sources; and

• Projecting cash inflows and outflows from a variety of sources and under a variety of scenarios.

Credco’s current liquidity target is to maintain adequate liquidity in the form of cash and readily-marketable securities that are easily convertible into cash, as well as access to additional liquidity through intercompany borrowing arrangements, to satisfy all maturing funding obligations for a period of 12 months, while continuing to maintain access to significant additional contingency liquidity sources. As of September 30, 2011, Credco had $2.6 billion of unsecured long-term debt that will mature within 12 months.

As of September 30, 2011, Credco had cash and cash equivalents of approximately $52 million. In addition to its actual holdings of cash and cash equivalents, Credco maintains access to additional liquidity, in the form of cash and cash equivalents held by certain affiliates, through intercompany loan agreements.

The yield Credco receives on its cash and cash equivalents is generally less than the interest expense on the sources of funding for these balances. Thus, Credco incurs substantial interest costs on these amounts. The level of net interest costs will be dependent on the amount of its cash and cash equivalents, as well as the difference between its cost of funding these amounts and their investment yields.

Committed Bank Credit Facilities

Credco maintained the following committed bank credit facilities as of September 30, 2011:

	American
(Billions)	Express		Credco		Total
Committed	$	0.8	$	6.6	$	7.4	(a)
Outstanding	$	—	$	4.5	$	4.5

(a) Credco has the right to borrow a maximum amount of $7.4 billion with a commensurate maximum $0.8 billion reduction in the amount available to American Express.

25

Credco’s remaining committed bank credit facilities expire as follows:

(Billions)
2012	$	2.9
2014 (a)		2.0
2016 (a)		2.5
Total	$	7.4

(a) On August 3, 2011, Credco repaid AUD $4.1 billion on its Australian Syndicated Credit Facility and on the same day entered into a new Credit Facility agreement for AUD $4.5 billion, which was fully drawn.

The availability of the credit lines is subject to Credco’s compliance with certain financial covenants that require maintenance of a 1.25 ratio of earnings to fixed charges. The ratio of earnings to fixed charges for Credco was 1.53 for the nine months ended September 30, 2011. The ratio of earnings to fixed charges for American Express for the nine months ended September 30, 2011 was 3.89.

Committed bank credit facilities do not contain material adverse change clauses that would preclude borrowing under the credit facilities. Additionally, the facilities may not be terminated should there be a change in Credco’s credit rating.

In consideration of all its funding sources, Credco believes it would have the liquidity to satisfy all maturing obligations for at least a 12-month period in the event that access to the secured and unsecured fixed income capital markets is completely interrupted for that length of time. These events are not considered likely to occur.

26

Cautionary Note Regarding Forward-Looking Statements

Various statements have been made in this Quarterly Report on this Third Quarter 2011 Form 10-Q that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may also be made in Credco’s other reports filed with or furnished to the Securities and Exchange Commission (SEC) and in other documents. In addition, from time to time, Credco, through its management, may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties, including those identified above and below, which could cause actual results to differ materially from such statements. The words “believe,” “expect,” “estimate,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions are intended to identify forward-looking statements. Credco cautions you that the risk factors described above and other factors described below are not exclusive. There may also be other risks that Credco is unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Credco undertakes no obligation to update or revise any forward-looking statements.

Factors that could cause actual results to differ materially from Credco’s forward-looking statements include, but are not limited to:

• changes in global economic and business conditions, including consumer and business spending, the availability and cost of credit, unemployment and political conditions, all of which may significantly affect spending on American Express cards, delinquency rates, loan balances and other aspects of Credco’s business and results of operations;

• changes in capital and credit market conditions, including sovereign creditworthiness, which may significantly affect Credco’s ability to meet its liquidity needs, access to capital and cost of capital, including changes in interest rates; changes in market conditions affecting the valuation of Credco’s assets; or any reduction in Credco’s credit ratings or those of its subsidiaries, which could materially increase the cost and other terms of Credco’s funding, restrict its access to the capital markets or result in contingent payments under contracts;

• the effectiveness of Credco’s risk management policies and procedures, including Credco’s ability to accurately estimate the provisions for losses in Credco’s outstanding portfolio of cardmember receivables and loans;

• fluctuations in foreign currency exchange rates;

• changes in laws or government regulations affecting American Express’ business, including the potential impact of regulations adopted by federal bank regulators relating to certain credit and charge card practices, the impact of the CARD Act, and the impact of the Dodd-Frank Reform Act, which is subject to further extensive rulemaking, the implications of which are not fully known at this time; or potential changes in the Federal tax system that could substantially alter, among other things, the taxation of American Express’ international businesses or the allowance of deductions for significant expenses;

• the impact on American Express’ business that could result from litigation such as class actions or proceedings brought by governmental and regulatory agencies (including the lawsuit filed against American Express by the DOJ and certain state attorneys general); and

• Credco’s ability to satisfy its liquidity needs and execute on its funding plans, which will depend on, among other things, Credco’s future business growth, Credco’s credit ratings, market capacity and demand for securities offered by Credco, performance by Credco’s counterparties under its bank credit facilities and other lending facilities, and regulatory changes.

27

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Credco’s management, with the participation of Credco’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Credco’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, Credco’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, Credco’s disclosure controls and procedures are effective and designed to ensure that the information required to be disclosed in Credco’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and communicated to Credco’s management, including Credco’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have not been any changes in Credco’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during Credco’s fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, Credco’s internal control over financial reporting.

28

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

For a discussion of Credco’s risk factors, see Part I, Item 1A. “Risk Factors” of Credco’s Annual Report on Form 10-K for the year ended December 31, 2010. There are no material changes from the risk factors set forth in such Annual Report on Form 10-K. However, the risks and uncertainties that Credco faces are not limited to those set forth in the 2010 Form 10-K. Additional risks and uncertainties not presently known to Credco or that it currently believes to be immaterial may also adversely affect Credco’s business.

ITEM 6. EXHIBITS

The exhibits required to be filed with this report are listed on page E-1 hereof, under “Exhibit Index,” which is incorporated herein by reference.

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN EXPRESS CREDIT CORPORATION
(Registrant)

Date: November 9, 2011	By	/s/ David L. Yowan
		David L. Yowan
		Chief Executive Officer
Date: November 9, 2011	By	/s/ Kimberly R. Scardino
		Kimberly R. Scardino
		Vice President and Chief Accounting Officer

30

EXHIBIT INDEX

Pursuant to Item 601 of Regulation S-K

Exhibit No.	Description	How Filed
Exhibit 10.1	Syndicated Facility Subscription Agreement dated as of August 3, 2011.	Incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q (Commission File No. 1-6908) for the quarter ended June 30, 2011.
Exhibit 12.1	Computation in Support of Ratio of Earnings to Fixed Charges of American Express Credit Corporation.	Electronically filed herewith.
Exhibit 12.2	Computation in Support of Ratio of Earnings to Fixed Charges of American Express Company.	Electronically filed herewith.
Exhibit 31.1	Certification of David L. Yowan, Chief Executive Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.	Electronically filed herewith.
Exhibit 31.2	Certification of Anderson Y. Lee, Chief Financial Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.	Electronically filed herewith.
Exhibit 32.1	Certification of David L. Yowan, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Electronically filed herewith.
Exhibit 32.2	Certification of Anderson Y. Lee, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Electronically filed herewith.
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

* These interactive data files are furnished and deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

E-1

EX-12.1

EXHIBIT 12.1

AMERICAN EXPRESS CREDIT CORPORATION
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)

	Nine Months
	Ended			Years Ended December 31,
	September 30, 2011			2010			2009		2008		2007
Earnings:
Net income	$	295		$	348		$	362	$	864	$	725
Income tax (benefit) provision		(21	)		(24	)		8		132		60
Interest expense		519			598			629		1,618		2,046
Total earnings (a)	$	793		$	922		$	999	$	2,614	$	2,831
Fixed charges — Interest expense (b)	$	519		$	598		$	629	$	1,618	$	2,046
Ratio of earnings to fixed charges (a/b)		1.53			1.54			1.59		1.62		1.38

Interest expense does not include interest on liabilities recorded in accordance with GAAP governing unrecognized tax benefits. Credco’s policy is to classify such interest in income tax provision in the Consolidated Statements of Income and Retained Earnings.

EX-12.2

EXHIBIT 12.2

AMERICAN EXPRESS COMPANY
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)

	Nine Months
	Ended		Years Ended December 31,
	September 30, 2011		2010		2009		2008		2007
Earnings:
Pretax income from continuing operations	$	5,208	$	5,964	$	2,841	$	3,581	$	5,694
Interest expense (a)		1,745		2,423		2,208		3,628		4,525
Other adjustments (b)		89		126		129		144		143
Total earnings	$	7,042	$	8,513	$	5,178	$	7,353	$	10,362
Fixed charges:
Interest expense	$	1,745	$	2,423	$	2,208	$	3,628	$	4,525
Other adjustments (c)		64		85		121		114		106
Total fixed charges	$	1,809	$	2,508	$	2,329	$	3,742	$	4,631
Ratio of earnings to fixed charges		3.89		3.39		2.22		1.96		2.24

(a)	Included in interest expense is interest expense related to the cardmember lending activities, international banking operations, and charge card and other activities in the Consolidated Statements of Income. Interest expense does not include interest on liabilities recorded under GAAP governing accounting for uncertainty in income taxes. American Express’ policy is to classify such interest in income tax provision in the Consolidated Statements of Income.
(b)	For purposes of the “earnings” computation, “other adjustments” include adding the amortization of capitalized interest, the net loss of affiliates accounted for under the equity method whose debt is not guaranteed by American Express, the noncontrolling interest in the earnings of majority-owned subsidiaries with fixed charges, and the interest component of rental expense, and subtracting undistributed net income of affiliates accounted for under the equity method.
(c)	For purposes of the “fixed charges” computation, “other adjustments” include capitalized interest costs and the interest component of rental expense.

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David L. Yowan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Express Credit Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2011	/s/ David L. Yowan
	David L. Yowan
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Anderson Y. Lee, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Express Credit Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2011	/s/ Anderson Y. Lee
	Anderson Y. Lee
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of American Express Credit Corporation (the “Company”) for the quarterly period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), David L. Yowan, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David L. Yowan
Name:	David L. Yowan
Title:	Chief Executive Officer
Date:	November 9, 2011

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-Q or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.1 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of American Express Credit Corporation (the “Company”) for the quarterly period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Anderson Y. Lee, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Anderson Y. Lee
Name:	Anderson Y. Lee
Title:	Chief Financial Officer
Date:	November 9, 2011

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-Q or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.2 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Consolidated Balance Sheets (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 52	$ 988
Cardmember receivables, less reserves	12,595	12,261
Cardmember loans, less reserves	382	371
Loans to affiliates	10,185	10,987
Deferred charges and other assets	388	627
Due from affiliates	6,446	3,987
Total assets	30,048	29,221
Liabilities
Short-term debt	839	645
Short-term debt to affiliates	3,916	3,781
Long-term debt	20,953	18,983
Total debt	25,708	23,409
Due to affiliates	779	1,742
Accrued interest and other liabilities	467	507
Total liabilities	26,954	25,658
Shareholder's Equity
Common stock, $.10 par value, authorized 3 million shares; issued and outstanding 1.5 million shares	0	0
Additional paid-in-capital	162	162
Retained earnings	3,027	3,496
Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax	(94)	(95)
Net unrealized derivative losses, net of tax	(1)	0
Total accumulated other comprehensive income (loss)	(95)	(95)
Total shareholder's equity	3,094	3,563
Total liabilities and shareholder's equity	$ 30,048	$ 29,221

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data	Sep. 30, 2011	Dec. 31, 2010
Assets
Cardmember receivables, reserves	$ 72	$ 112
Cardmember loans, reserves	6	9
Shareholder's Equity
Common shares, par value	$ 0.10	$ 0.10
Common shares, authorized	3	3
Common shares, issued	1.5	1.5
Common shares, outstanding	1.5	1.5
Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, tax	11	49
Net unrealized derivatives losses, tax	$ 0	$ 0

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2011	Nov. 09, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	AMERICAN EXPRESS CREDIT CORPORATION
Entity Central Index Key	0000004969
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,504,938

XML

Variable Interest Entity

9 Months Ended

Sep. 30, 2011

Variable Interest Entity [Abstract]

Variable Interest Entity

7. Variable Interest Entity

Credco has established a variable interest entity (VIE), American Express Canada Credit Corporation (AECCC), used primarily to loan funds to affiliates. Credco has a shelf registration in Canada for a medium-term note program providing for the issuance of notes by AECCC. All notes issued under this program are fully guaranteed by Credco. These medium-term note issuances are the primary source of financing loans to the Canadian affiliate. Credco is considered the primary beneficiary of the entity and owns all of the outstanding voting interests and therefore, consolidates the entity in accordance with accounting guidance governing consolidation of VIEs. Total assets as ofboth September 30, 2011 and December 31, 2010 were$2.4 billion and are eliminated in consolidation. Total liabilities as of both September 30, 2011 and December 31, 2010 were $2.3 billionand are primarily recorded in long-term debt. As of September 30, 2011 and December 31, 2010, $123 million and $501 million, respectively, of liabilities were eliminated in consolidation. The assets of the VIE are not used solely to settle the obligations of the VIE. The note holders of the VIE have recourse to Credco.

XML

Cardmember Receivables and Loans

9 Months Ended

Sep. 30, 2011

Cardmember Receivables and Loans [Abstract]

Cardmember Receivables and Loans

3.Cardmember Receivables and Loans

Cardmember Receivables

Cardmember receivables representing amounts due from American Express charge payment product customers, are recorded at the time a cardmember enters into a point-of-sale transaction with a merchant. Each charge card transaction is authorized based on its likely economics reflecting a cardmember's most recent credit information and spend patterns. Global limits are established to limit the maximum exposure for American Express from high risk and some high spend charge cardmembers andaccounts of high risk, out of pattern charge cardmembers can be monitored even if they are current. Charge card customers generally must pay the full amount billed each month.

Credco records these cardmember receivables at the time they are purchased from TRS and certain of its subsidiaries that issue the Card (card issuers). Cardmember receivable balances are presented on the Consolidated Balance Sheets, net of reserves for losses (refer to Note 4), and typically include principal and any related accrued fees. Cardmember receivables also include participation interests purchased from an affiliate. Participation interests in cardmember receivables represent undivided interests in the cash flows of the non-interest-bearing cardmember receivables and are purchased without recourse by Credco Receivables Corporation (CRC), which is a wholly-owned subsidiary of Credco, from American Express Receivables Financing Corporation V LLC (RFC V). As of September 30, 2011and December 31, 2010, CRC owned approximately $3.2 billion and $3.7 billion, respectively, of participation interests in cardmember receivables purchased from RFCV.

Cardmember receivables as ofSeptember 30, 2011 and December 31, 2010 consisted of:

(Millions)			2011		2010
U.S. Consumer and Small Business Services		$	2,974	$	3,497
International and Global Commercial Services(a)			9,693		8,876
Cardmember receivables, gross			12,667		12,373
Less: Cardmember receivables reserve for losses			72		112
	Cardmember receivables, net(b)	$	12,595	$	12,261

(a) International is comprised of consumer and small business services.

(b) Cardmember receivables modified in a troubled debt restructuring (TDR) program were immaterial.

Cardmember Loans

Cardmember loans represent amounts due from customers of American Express and certain of its affiliates' lending payment products. For American Express, these cardmember loansare recorded at the time a cardmember enters into a point-of-sale transaction with a merchant or when a charge card customer enters into an extended payment arrangement. American Express' lending portfolios primarily include revolving loans to cardmembers obtained through either credit card accounts or the lending oncharge feature of their charge card accounts. These loans have a range of terms such as credit limits, interest rates, fees and payment structures, which can be adjusted over time based on new information about cardmembers and in accordance with applicable regulations and the respective product's terms and conditions. Cardmembers holding revolving loans are typically required to make monthly payments greater than or equal to certain pre-established amounts. The amounts that cardmembers choose to revolve are subject to finance charges. When cardmembers fall behind on their required payments, their accounts are monitored.

Credco records these cardmember loans at the time they are purchased from TRS and certain of its affiliates. Cardmember loans are presented on the Consolidated Balance Sheets, net of reserves for cardmember losses and include accrued interest and fees receivable. Credco's policy generally is to cease accruing for interest receivable on a cardmember loan at the time the account is written off. Credco establishes reserves for interest that Credco believes will not be collected.

Cardmember loans, consisting of loans in the International card services portfolio, as ofSeptember 30, 2011 and December 31, 2010were as follows:

(Millions)			2011		2010
Cardmember loans, gross		$	388	$	380
Less: Cardmember loans reserve for losses			6		9
	Cardmember loans, net(a)	$	382	$	371

• Cardmember loans modified in a troubled debt restructuring (TDR) program were immaterial.

Cardmember Receivables and Cardmember Loans Aging

Generally, a cardmember account is considered past due if payment is not received within 30 days after the billing statement date. The following table represents the aging of cardmember receivables and cardmember loansas of September 30, 2011 and December 31, 2010:

• Cardmember loans modified in a troubled debt restructuring (TDR) program were immaterial.

Cardmember Receivables and Cardmember Loans Aging

Generally, a cardmember account is considered past due if payment is not received within 30 days after the billing statement date. The following table represents the aging of cardmember receivables and cardmember loansas of September 30, 2011 and December 31, 2010:

				30-59		60-89
				Days		Days		90+ Days
2011 (Millions)		Current		Past Due		Past Due		Past Due		Total
Cardmember Receivables:
U.S. Consumer and Small Business Services	$	2,923	$	24	$	9	$	18	$	2,974
International and Global Commercial Services(a)		(b)		(b)		(b)		72		9,693
Cardmember Loans:
International Card Services(c)	$	377	$	6	$	2	$	3	$	388
				30-59		60-89
				Days		Days		90+ Days
2010 (Millions)		Current		Past Due		Past Due		Past Due		Total
Cardmember Receivables:
U.S. Consumer and Small Business Services	$	3,453	$	18	$	8	$	18	$	3,497
International and Global Commercial Services(a)		(b)		(b)		(b)		76		8,876
Cardmember Loans:
International Card Services(c)	$	367	$	7	$	2	$	4	$	380

• For cardmember receivables in International and Global Commercial Services, delinquency data is tracked based on days past billing status rather than days past due. A cardmember account is considered 90 days past billing if payment has not been received within 90 days of the cardmember's billing statement date. In addition, ifcollection procedures are initiated on an account prior to the account becoming 90 days past billing, the associated cardmember receivable balance is considered as 90 days past billing. These amounts are shown above as 90+Days Past Due for presentation purposes.
• Historically, data for periods prior to 90 days past billing are not available due to system constraints. Therefore, it 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.
• Cardmember loans over 90 days past due continue to accrue interest.

Credit Quality Indicators for Cardmember Receivables and CardmemberLoans

The following tables present the key credit quality indicators as of orfor the nine months ended September 30:

		2011				2010
				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
U.S. Consumer and Small Business Services ―
	Cardmember Receivables	1.36	%	1.70	%	1.48	%	1.53	%
International Card Services ― Cardmember Loans		0.57	%	2.84	%	2.39	%	3.69	%
		2011				2010
		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)(c)	Receivables		Volume	(b)(c)	Receivables
International and Global Commercial Services ―
	Cardmember Receivables	0.04	%	0.74	%	0.13	%	0.80	%

• Credco's write-offs, net of recoveries, represent the amount of cardmember receivables or cardmember loans owned by Credco that are written off, consisting of principal, interest and/or fees, expressed as a percentage of the average cardmember receivables or cardmember loans balances during the period.
• Credco's write-offs, net of recoveries, represent the amount of cardmember receivables owned by Credco that are written off, consisting of principal and fees, expressed as a percentage of the volume of cardmember receivables purchased by Credco during the period.
• Effective January 1, 2010, American Express revised the time period in which past due cardmember receivables for its International Card Services and Global Commercial Services segments are written off to 180 days past due or earlier, consistent with applicable bank regulatory guidance and the write-off methodology adopted for U.S. Consumer and Small Business receivables in the fourth quarter of 2008. Previously, these cardmember receivables were written off when 360 days past billing. Therefore, the net write-offs for the first quarter of 2010 include net write-offs resulting from this write-off methodology change, which decreased the 90 days past billing metrics and increased net loss ratios, but did not have a significant impact on provisions for losses.

Refer to Note 4 for other factors, including external environmental factors, that management considers as part of its evaluation of reserves for losses.

XML

Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

• Income Taxes

The results of operations of Credco are included in the consolidated U.S. federal income tax return of American Express. Under an agreement with TRS, provision for income taxes is recognized on a separate company basis. If benefits for net operating losses, future tax deductions and foreign tax credits cannot be recognized on a separate company basis, such benefits are then recognized based upon a share, derived by formula, of those deductions and credits that are recognizable on a TRS consolidated reporting basis.

American Express is under continuous examination by the Internal Revenue Service (IRS) and tax authorities in other countries and states in which American Express has significant business operations. The tax years under examination and open for examination vary by jurisdiction. In June 2008, the IRS completed its field examination of American Express' federal tax returns for the years 1997 through 2002. In July 2009, the IRS completed its field examination of American Express' federal tax returns for the years 2003 and 2004. In April 2011, unagreed issues for 1997-2004 were resolved at IRS Appeals. Additional refund claims for those years continue to be reviewed by the IRS. In addition, American Express is currently under examination by the IRS for the years 2005 through 2007.

Credco believes it is reasonably possible that the unrecognized tax benefits could decrease within the next 12 monthsby as much as $590 million principally as a result of potential resolutions of prior years' tax items with various taxing authorities. Of the $590 million of unrecognized tax benefits, approximately $580 million relate to amounts recorded to equity that, if recognized, would not impact the effective rate. With respect to the remaining $10 million, it is not possible to quantify the impact such changes may have on the effective tax rate and net income due to the inherent complexities and the number of tax years currently under examination. Resolution of the prior years' items that comprise this remaining amount could have an impact on the effective tax rate and on net income, either favorably (principally as a result of settlements that are less than the liability for unrecognized tax benefits) or unfavorably (if such settlements exceed the liability for unrecognized tax benefits).

The following table summarizes Credco's effective tax rate:

	Three Months Ended		Nine Months Ended		Year ended
	September 30, 2011		September 30, 2011		December 31, 2010
Effective tax rate(a) (b)	(17.8)	%	(7.7)	%	(7.4)	%

• Each of the periods reflects recurring, permanent tax benefits in relation to the level of pretax income and geographic mix of business.
• The income tax provision for the three and nine months ended September 30, 2011, includes the impact of certain discrete state tax items and the impact of the favorable resolution of certain prior years' tax items. In addition, the income tax provision for the three months ended September 30, 2011, includes the impact of a federal discrete item.

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2011

Basis of Presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

American Express Credit Corporation (Credco), together with its subsidiaries, is a wholly-owned subsidiary of American Express Travel Related Services Company, Inc. (TRS), which is a wholly-owned subsidiary of American Express Company (American Express). American Express charge cards and American Express credit cards are collectively referred to herein as the Card.

Credco is engaged in the business of financing non-interest-bearing cardmember receivables arising from the use of the American Express® Card, the American Express® Gold Card, Platinum Card®, Corporate Card and other American Express cards issued in the United States and in certain countries outside the United States. Credco also finances certain interest-bearing and discounted revolving loans generated by cardmember spending on American Express credit cards issued in non-U.S. markets, although interest-bearing and revolving loans are primarily funded by subsidiaries of TRS other than Credco.

Credco executes material transactions with its affiliates. The agreements between Credco and its affiliates provide that the parties intend that the transactions thereunder be conducted on an arm's length basis; however, there can be no assurance that the terms of these arrangements are the same as would be negotiated between independent, unrelated parties.

American Express provides Credco with financial support with respect to maintenance of its minimum overall 1.25 fixed charge coverage ratio, which is achieved by adjusting the discount rates on the purchases of receivables Credco makes from, and the interest rates on the loans Credco provides to, TRS and other American Express subsidiaries. Each monthly period, the discount and interest rates are adjusted to generate income for Credco that is sufficient to maintain its minimum fixed charge coverage ratio.

The accompanying Consolidated Financial Statements should be read in conjunction with the financial statements included in the Annual Report on Form 10-K (Form 10-K) of Credco for the year ended December 31, 2010. Significant accounting policies disclosed therein have not changed.

The interim consolidated financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial position and the consolidated results of operations for the interim periods have been made. All adjustments made were of a normal, recurring nature. Results of operations reported for interim periods are not necessarily indicative of results for the entire year.

Accounting estimates are an integral part of the Consolidated Financial Statements. These estimates are based, in part, on management's assumptions concerning future events. Among the more significant assumptions are those that relate to reserves for cardmember losses relating tocardmember receivables and loans, fair value measurement and income taxes. These accounting estimates reflect the best judgment of management, but actual results could differ.

XML

Reserves for Losses

9 Months Ended

Sep. 30, 2011

Reserves for Losses [Abstract]

Reserves for Losses

Reserves for Losses

Reserves for Losses – Cardmember Receivables and Loans

Reserves for losses relating to cardmember receivables and loans represent management's best estimate of the losses inherent in Credco's outstanding portfolios. Credco's total provisions for losses were $43 million and $85 million for the nine months ended September 30, 2011 and 2010, respectively.Management's evaluation process requires certain estimates and judgments.

Reserves for these losses are primarily based upon models that analyze portfolio performance and reflect management's judgment regarding overall reserve adequacy. The analytic models take into account several factors, including average losses and recoveries over an appropriate historical period. Management considers whether to adjust the analytic models for specific factors such as increased risk in certain portfolios, impact of risk management initiatives on portfolio performance and concentration of credit risk based on factors such as tenure, industry or geographic regions. In addition, management adjusts the reserves for losses on cardmember loans for other external environmental factors including leading economic and market indicators, such as the unemployment rate, Gross Domestic Product (GDP), home price indices, non-farm payrolls, personal consumption expenditures index, consumer confidence index, purchasing managers index, bankruptcy filings and the legal and regulatory environment. Generally, due to the short-term nature of cardmember receivables, the impact of additional external factors on the inherent losses within the cardmember receivables portfolio is not significant. As part of this evaluation process, management also considers various reserve coverage metrics, such as reserves as a percentage of past-due amounts, reserves as a percentage of cardmember receivables or loans and net write-off coverage.

Cardmember loans and receivablesbalances are written off when management deems amounts to be uncollectible and is generally determined by the number of days past due, which is generally no later than 180 days past due. Cardmember loans and receivables in bankruptcy or owed by deceased individuals are written off upon notification. Recoveries are recognized on a cash basis.

Changes in Cardmember Receivables Reserve for Losses

The following table presents changes in the cardmember receivables reserve for losses for the nine months ended September 30:

(Millions)		2011		2010
Balance, January 1		$	112	$	141
Additions:
	Cardmember receivables provisions(a)		45		82
	Other credits(b)		23		26
Deductions:
	Cardmember receivables net write-offs(c)		(92)		(142)
	Other debits(d)		(16)		(1)
Balance, September 30(e)		$	72	$	106

(a)       Represents loss provisions for cardmember receivables consisting of principal (resulting from authorized transactions) and fee reserve components.

(b)       Primarily represents reserve balances applicable to participation interests in cardmember receivables purchased from an affiliate. Participation interests in cardmember receivables purchased from an affiliate totaled $2.7 billion and $2.6 billion for the nine months ended September 30, 2011 and 2010, respectively.

(c)       Represents write-offs consisting of principal (resulting from authorized transactions) and fee components, lessrecoveries of $74 million and $83 million for the nine months ended September 30, 2011 and 2010, respectively.

(d) Primarily relates to reservesfor losses attributable to participation interestsin cardmember receivables sold to an affiliate.Participation interests in cardmember receivables sold to an affiliate totaled $2.2 billion and nil for the nine months ended September 30, 2011 and 2010, respectively.

(e) Volume of receivables purchased was $130 billion and $115 billion for the nine months ended September 30, 2011 and 2010, respectively.

Changes in Cardmember Loans Reserve for Losses

The following table presents changes in the cardmember loans reserve for losses for the nine months ended September 30:

(Millions)		2011		2010
Balance, January 1		$	9	$	19
Additions:
	Cardmember loans provisions(a)		(2)		3
Deductions:
	Cardmember loans net write-offs(b)		(1)		(9)
	Other debits(c)		0		(3)
Balance, September 30(d)		$	6	$	10

• Represents loss provisions for cardmember loans consisting of principal (resulting from authorized transactions), interest and fee reserves components.
• Cardmember loans net write-offs include recoveries of $5 million and $7 million forthe nine months ended September 30, 2011 and 2010, respectively.
• These amounts include foreign currency translation adjustments.
• Volume of loans purchased was $2 billionfor both the nine months ended September 30, 2011 and 2010.

XML

Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2011

Comprehensive Income (Loss) [Abstract]

Comprehensive Income (Loss)

5. Comprehensive Income (Loss)

Comprehensive income (loss) includes net income and changes in accumulated other comprehensive income (loss) (AOCI), which is a balance sheet item in the Shareholder's Equity section of Credco's Consolidated Balance Sheets. AOCI is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. The components of comprehensive income (loss), net of tax, were as follows:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(Millions)		2011		2010		2011		2010
Net income		$	119	$	82	$	295	$	269
Other comprehensive income (loss):
	Net unrealized securities losses		―		(4)		―		(12)
	Net unrealized derivatives (loss) gains		(1)		2		(1)		3
	Foreign currency translation adjustments		(150)		357		1		67
Total		$	(32)	$	437	$	295	$	327

XML

Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2011

Derivatives and Hedging Activities [Abstract]

Derivatives and Hedging Activities

6.Derivatives and Hedging Activities

Credco uses derivative financial instruments (derivatives) to manage exposure to various market risks. Market risk is the risk to earnings or value resulting from movements in market prices. Credco's market risk exposure is primarily generated by:

• Interest rate risk in its funding activities; and
• Foreign exchange risk in its operations outside the United States.

General principles and the overall framework for managing market risk across American Express and its subsidiaries, including Credco, are defined in the Market Risk Policy, which is the responsibility of the Asset-Liability Committee (ALCO). Market risk limits and escalation triggers in that policy are approved by the ALCO and by the Enterprise-wide Risk Management Committee (ERMC). Market risk is centrally monitored for compliancewith policy and limits by the Market Risk Committee, which reports into the ALCO and is chaired by the Chief Market Risk Officer of American Express. Market risk management is also guided by policies covering the use of derivatives, funding and liquidity and investments.

Derivatives derive their value from an underlying variable or multiple variables, including interest rate and foreign exchange rate. These instruments enable end users to increase, reduce or alter exposure to various market risks and, for that reason, are an integral component of Credco's market risk management. Credco does not engage in derivatives for trading purposes.

Interest rate exposure within Credco's charge card and fixed-rate lending products is managed by varying the proportion of total funding provided by short-term and variable-rate debt compared to fixed-rate debt. In addition, interest rate swaps are used from time to time to synthetically convert fixed-rate debt obligations to variable-rate obligations or to convert variable-rate debt obligations to fixed-rate obligations. Credco may change the mix between variable-rate and fixed-rate funding based on changes in business volumes and mix, among other factors.

Foreign exchange risk is generated by (i) funding foreign currency cardmember receivables and loans with U.S. dollars and (ii) foreign subsidiary equity and foreign currency earnings in units outside the United States. Credco hedges this market exposure to the extent it is economically justified through various means, including the use of derivatives such as foreign exchange forwards and cross-currency swap contracts, which can help “lock-in” the value of Credco's exposure to specific currencies. Exposures from foreign subsidiary equity in Credco's units outside the United States are hedged through various means, including the use of foreign currency debt and foreign exchange forwards executed either by Credco or TRS.

Derivatives may give rise to counterparty credit risk, which is the risk that a derivative counterparty will default on, or otherwise be unable to perform pursuant to, an uncollateralized derivative exposure. Credco manages this risk by considering the current exposure, which is the replacement cost of contracts on the measurement date, as well as estimating the maximum potential value of the contracts over the next 12 months, considering such factors as the volatility of the underlying or reference index. To mitigate derivative credit risk, counterparties are required to be pre-approved and rated as investment grade. Counterparty risk exposures are monitored by American Express' Institutional Risk Management Committee (IRMC). The IRMC formally reviews large institutional exposures to ensure compliance with American Express' ERMC guidelines and procedures and determines the risk mitigation actions, when necessary. Additionally, in order to mitigate the bilateral counterparty credit risk associated with derivatives, Credco has in certain instances entered into master netting agreements with its derivative counterparties thatprovide a right of offset for certain exposures between the parties.To further mitigate bilateral counterparty credit risk, during the third quarter of 2011 Credco exercised its rights under executed credit support agreements with certain of its derivative counterparties. These agreements require that, in the event the fair value change in the net derivatives position between the two parties exceeds certain dollar thresholds, the party in the net liability position posts collateral to its counterparty.

In relation to Credco's credit risk, under the terms of the derivative agreements it has with its various counterparties, Credco is not required to either immediately settle any outstanding liability balances or post collateral upon the occurrence of a specified credit risk-related event. As of September 30, 2011 and December 31, 2010, the counterparty credit risk associated with Credco's derivatives was not significant.

Credco's derivatives are carried at fair value on the Consolidated Balance Sheets. The accounting for changes in fair value depends on the instruments' intended use and the resulting hedge designation, if any, as discussed below. Refer to Note 2 for a description of Credco's methodology for determining the fair value of its derivatives.

The following table summarizes the total gross fair value, excluding interest accruals, of derivative assets and liabilities as of September 30, 2011 and December 31, 2010:

			Deferred Charges and Other Assets				Accrued Interest and Other Liabilities
			Fair Value				Fair Value
(Millions)			2011		2010		2011		2010
Derivatives designated as hedging instruments:
	Interest rate contracts
		Fair value hedges	$	530	$	444	$	2	$	38
		Cash flow hedges		―		2		1		2
	Foreign exchange contracts
		Net investment hedges		79		―		―		16
Total derivatives designated as hedging instruments			$	609	$	446	$	3	$	56
Derivatives not designated as hedging instruments:
	Interest rate contracts		$	1	$	1	$	3	$	3
	Foreign exchange contracts			58		51		121		22
Total derivatives not designated as hedging instruments			$	59	$	52	$	124	$	25
Total derivatives gross			$	668	$	498	$	127	$	81
Cash collateral netting(a)				(345)		―		―		―
Derivative asset and derivative liability netting(a)				(11)		(1)		(11)		(1)
Total derivatives, net			$	312	$	497	$	116	$	80

• As permitted under GAAP,balances represent the netting of cash collateral received and posted under credit support agreements, and the netting of derivative assets and derivative liabilities under master netting agreements.

Derivative Financial Instruments that Qualify for Hedge Accounting

Derivatives executed for hedge accounting purposes are documented and designated as such when Credco enters into the contracts. In accordance with its risk management policies, Credco structures its hedges with very similar terms to the hedged items. Credco formally assesses, at inception of the hedge accounting relationship and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the fair value or cash flows of the hedged items. These assessments usually are made through the application of a regression analysis method. If it is determined that a derivative is not highly effective as a hedge, Credco will discontinue the application of hedge accounting.

Fair Value Hedges

A fair value hedge involves a derivative designated to hedge Credco's exposure to future changes in the fair value of an asset or a liability, or an identified portion thereof that is attributable to a particular risk. Credco is exposed to interest rate risk associated with its fixed-rate long-term debt. Credco uses interest rate swaps to synthetically convert certain fixed-rate long-term debt obligations to floating-rate obligations at the time of issuance. As ofSeptember 30, 2011 and December 31, 2010, Credco hedged $10.6 billion and$8.9 billion, respectively, of its fixed-rate debt to floating-rate debt using interest rate swaps.

To the extent the fair value hedge is effective, the gain or loss on the hedging instrument offsets the loss or gain on the hedged item attributable to the hedged risk. Any difference between the changes in the fair value of the derivative and the hedged item is referred to as hedge ineffectiveness and is reflected in earnings as a component of other, net expenses. Hedge ineffectiveness may be caused by differences between the debt's interest coupon and the benchmark rate, which are primarily due to credit spreads at inception of the hedging relationship that are not reflected in the valuation of the interest rate swap. Furthermore, hedge ineffectiveness may be caused by changes in the relationship between 3-month LIBOR and 1-month LIBOR rates, as these so-called basis spreads may impact the valuation of the interest rate swap without causing an offsetting impact in the value of the hedged debt. If a fair value hedge is de-designated or no longer considered to be effective, changes in fair value of the derivative continue to be recorded through earnings but the hedged asset or liability is no longer adjusted for changes in fair value due to changes in interest rates. The existing basis adjustment of the hedged asset or liability is then amortized or accreted as an adjustment to yield over the remaining life of that asset or liability.

The following table summarizes the impact on the Consolidated Statements of Income and Retained Earnings associated with Credco's hedgesof fixed-rate long-term debt:

• As permitted under GAAP,balances represent the netting of cash collateral received and posted under credit support agreements, and the netting of derivative assets and derivative liabilities under master netting agreements.

Derivative Financial Instruments that Qualify for Hedge Accounting

Derivatives executed for hedge accounting purposes are documented and designated as such when Credco enters into the contracts. In accordance with its risk management policies, Credco structures its hedges with very similar terms to the hedged items. Credco formally assesses, at inception of the hedge accounting relationship and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the fair value or cash flows of the hedged items. These assessments usually are made through the application of a regression analysis method. If it is determined that a derivative is not highly effective as a hedge, Credco will discontinue the application of hedge accounting.

Fair Value Hedges

A fair value hedge involves a derivative designated to hedge Credco's exposure to future changes in the fair value of an asset or a liability, or an identified portion thereof that is attributable to a particular risk. Credco is exposed to interest rate risk associated with its fixed-rate long-term debt. Credco uses interest rate swaps to synthetically convert certain fixed-rate long-term debt obligations to floating-rate obligations at the time of issuance. As ofSeptember 30, 2011 and December 31, 2010, Credco hedged $10.6 billion and$8.9 billion, respectively, of its fixed-rate debt to floating-rate debt using interest rate swaps.

To the extent the fair value hedge is effective, the gain or loss on the hedging instrument offsets the loss or gain on the hedged item attributable to the hedged risk. Any difference between the changes in the fair value of the derivative and the hedged item is referred to as hedge ineffectiveness and is reflected in earnings as a component of other, net expenses. Hedge ineffectiveness may be caused by differences between the debt's interest coupon and the benchmark rate, which are primarily due to credit spreads at inception of the hedging relationship that are not reflected in the valuation of the interest rate swap. Furthermore, hedge ineffectiveness may be caused by changes in the relationship between 3-month LIBOR and 1-month LIBOR rates, as these so-called basis spreads may impact the valuation of the interest rate swap without causing an offsetting impact in the value of the hedged debt. If a fair value hedge is de-designated or no longer considered to be effective, changes in fair value of the derivative continue to be recorded through earnings but the hedged asset or liability is no longer adjusted for changes in fair value due to changes in interest rates. The existing basis adjustment of the hedged asset or liability is then amortized or accreted as an adjustment to yield over the remaining life of that asset or liability.

The following table summarizes the impact on the Consolidated Statements of Income and Retained Earnings associated with Credco's hedgesof fixed-rate long-term debt:

For the Three Months Ended September 30:
(Millions)	Gains (losses) recognized in income
	Derivative contract					Hedged item					Net hedge
		Amount					Amount				ineffectiveness
Derivative Relationship	Location	2011		2010		Location	2011		2010		2011		2010
Interest rate contracts	Other, net expenses	$	108	$	100	Other, net expenses	$	(97)	$	(106)	$	11	$	(6)
For the Nine Months Ended September 30:
(Millions)	Gains (losses) recognized in income
	Derivative contract					Hedged item					Net hedge
		Amount					Amount				ineffectiveness
Derivative Relationship	Location	2011		2010		Location	2011		2010		2011		2010
Interest rate contracts	Other, net expenses	$	121	$	300	Other, net expenses	$	(118)	$	(286)	$	3	$	14

Credco also recognized a net reduction in interest expense on long-term debt and other of $65 million and $63 million for the three months ended September 30, 2011 and 2010, respectively, primarily related to the net settlements (interest accruals) on Credco's interest rate derivatives designated as fair value hedges.For the nine months ended September 30, 2011 and 2010, the impact on interest expense was a net reduction in interest expense on long-term debt and other of $191 million and $192 million, respectively.

Cash Flow Hedges

A cash flow hedge involves a derivative designated to hedge Credco's exposure to variable future cash flows attributable to a particular risk. Such exposures may relate to either an existing recognized asset or liability, or a forecasted transaction. Credco hedges existing long-term variable-rate debt, the rollover of short-term borrowings and the anticipated forecasted issuance of additional funding through the use of derivatives, primarily interest rate swaps. These derivative instruments synthetically convert floating-rate debt obligations to fixed-rateobligations for the duration of the instrument. As ofSeptember 30, 2011 and December 31, 2010, Credco hedged $0.3 billion and $0.8 billion, respectively, of its floating-rate debt using interest rate swaps.

For derivatives designated as cash flow hedges, the effective portion of the gain or loss on the derivatives is recorded in AOCI and reclassified into earnings when the hedged cash flows are recognized in earnings. The amount that is reclassified into earnings is presented in the Consolidated Statements of Income and Retained Earningsin the same line item in which the hedged instrument or transaction is recognized, primarily in interest expense. Any ineffective portion of the gain or loss on the derivatives is reported as a component of other, net expenses. If a cash flow hedge is de-designated or terminated prior to maturity, the amount previously recorded in AOCI is recognized into earnings over the period that the hedged item impacts earnings. If a hedge relationship is discontinued because it is probable that the forecasted transaction will not occur according to the original strategy, any related amounts previously recorded in AOCI are recognized into earnings immediately.

In the normal course of business, as the hedged cash flows are recognized into earnings, Credco expects to reclassify $1 million of net pretax losses on derivatives from AOCI into earnings during the next 12 months.

The following table summarizes the impact of cash flow hedges on the Consolidated Statements of Income and Retained Earnings:

For the Three Months Ended September 30:
(Millions)		Gains (losses) recognized in income
				Amount
				reclassified from					Net hedge
				AOCI into income					ineffectiveness
			Location	2011		2010		Location	2011		2010
Cash flow hedges:(a)
	Interest rate contracts		Interest expense	$	—	$	(1)	Other, net expenses	$	—	$	—
For the Nine Months Ended September 30:
(Millions)			Gains (losses) recognized in income
				Amount
				reclassified from					Net hedge
				AOCI into income					ineffectiveness
			Location	2011		2010		Location	2011		2010
Cash flow hedges:(a)
	Interest rate contracts		Interest expense	$	(1)	$	(3)	Other, net expenses	$	—	$	—

• During the three and nine months ended September 30, 2011 and 2010, there were no forecasted transactions that were considered no longer probable to occur.

Net Investment Hedges

A net investment hedge is used to hedge future changes in currency exposure of a net investment in a foreign operation. Credco primarily designates foreign currency derivatives, typically foreign exchange forwards, and on occasion foreign currency denominated debt, as hedges of net investments in certain foreign operations. These instruments reduce exposure to changes in currency exchange rates on Credco's investments in non-U.S. subsidiaries. The effective portion of the gain or loss on net investment hedges recorded in AOCI, as part of the cumulative translation adjustment, was $64 million and $(18) million for the three months ended September 30, 2011 and 2010, respectively. For the nine months ended September 30, 2011and 2010, the effective portion of the gain or loss on net investment hedges was $26 million and $(47) million, respectively. Any ineffective portion of the gain or loss on net investment hedges is recognized in other, net expenses during the period of change. No ineffectiveness or otheramounts were reclassified from AOCI into income for the nine months ended September 30, 2011 or2010.

Derivatives Not Designated as Hedges

Credco has derivatives that act as economic hedges, but are not designated for hedge accounting purposes. Foreign currency transactions and non-U.S. dollar cash flow exposures from time to time may be partially or fully economically hedged through foreign currency contracts, primarily foreign exchange forwards, options and cross-currency swaps. These hedges generally mature within one year. Foreign currency contracts involve the purchase and sale of a designated currency at an agreed upon rate for settlement on a specified date. The changes in the fair value of the derivatives effectively offset the related foreign exchange gains or losses on the underlying balance sheet exposures. From time to time, Credco may enter into interest rate swaps to specifically manage funding costs related to American Express' proprietary card business.

For derivatives that are not designated as hedges, changes in fair value are reported in current period earnings.

The following table summarizes the impact of derivatives not designated as hedges on the Consolidated Statements of Income and Retained Earnings:

• During the three and nine months ended September 30, 2011 and 2010, there were no forecasted transactions that were considered no longer probable to occur.

Net Investment Hedges

A net investment hedge is used to hedge future changes in currency exposure of a net investment in a foreign operation. Credco primarily designates foreign currency derivatives, typically foreign exchange forwards, and on occasion foreign currency denominated debt, as hedges of net investments in certain foreign operations. These instruments reduce exposure to changes in currency exchange rates on Credco's investments in non-U.S. subsidiaries. The effective portion of the gain or loss on net investment hedges recorded in AOCI, as part of the cumulative translation adjustment, was $64 million and $(18) million for the three months ended September 30, 2011 and 2010, respectively. For the nine months ended September 30, 2011and 2010, the effective portion of the gain or loss on net investment hedges was $26 million and $(47) million, respectively. Any ineffective portion of the gain or loss on net investment hedges is recognized in other, net expenses during the period of change. No ineffectiveness or otheramounts were reclassified from AOCI into income for the nine months ended September 30, 2011 or2010.

Derivatives Not Designated as Hedges

Credco has derivatives that act as economic hedges, but are not designated for hedge accounting purposes. Foreign currency transactions and non-U.S. dollar cash flow exposures from time to time may be partially or fully economically hedged through foreign currency contracts, primarily foreign exchange forwards, options and cross-currency swaps. These hedges generally mature within one year. Foreign currency contracts involve the purchase and sale of a designated currency at an agreed upon rate for settlement on a specified date. The changes in the fair value of the derivatives effectively offset the related foreign exchange gains or losses on the underlying balance sheet exposures. From time to time, Credco may enter into interest rate swaps to specifically manage funding costs related to American Express' proprietary card business.

For derivatives that are not designated as hedges, changes in fair value are reported in current period earnings.

The following table summarizes the impact of derivatives not designated as hedges on the Consolidated Statements of Income and Retained Earnings:

For the Three Months Ended September 30:	Gains (losses) recognized in income
		Amount
(Millions)	Location	2011		2010
Foreign exchange contracts	Other, net expenses	$	(6)	$	105
Total		$	(6)	$	105
For the Nine Months Ended September 30:	Gains (losses) recognized in income
		Amount
(Millions)	Location	2011		2010
Interest rate contracts	Other, net expenses	$	—	$	1
Foreign exchange contracts	Other, net expenses		6		83
	Interest expense		—		43
Total		$	6	$	127

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash Flows from Operating Activities
Net income	$ 295	$ 269
Adjustments to reconcile net income to net cash provided by operating activities:
Provisions for losses	43	85
Amortization and other	3	23
Deferred taxes	(22)	100
Changes in operating assets and liabilities:
Due from affiliates, net	25	(43)
Other operating assets and liabilities	372	154
Net cash provided by operating activities	716	588
Cash Flows from Investing Activities
Net increase in cardmember receivables and loans	(343)	(2,975)
Maturities of investments		175
Net decrease (increase) in loans to affiliates	689	(1)
Net (increase) decrease in due from affiliates	(3,505)	209
Net cash used in investing activities	(3,159)	(2,592)
Cash Flows from Financing Activities
Net increase (decrease) in short-term debt to affiliates	127	1,100
Net increase in short-term debt	197	(90)
Issuance of long-term debt	7,322	2,396
Principal payments on long-term debt	(5,371)	(1,515)
Dividends paid	(764)	(187)
Net cash provided by financing activities	1,511	1,704
Effect of exchange rate changes on cash and cash equivalents	(4)	4
Net decrease in cash and cash equivalents	(936)	(296)
Cash and cash equivalents at beginning of period	988	304
Cash and cash equivalents at end of period	$ 52	$ 8

XML

Fair Values

9 Months Ended

Sep. 30, 2011

Fair Values [Abstract]

Fair Values

2. Fair Values

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date, and is based on Credco's principal or most advantageous market for the specific asset or liability.

U.S. generally accepted accounting principles (GAAP) provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

• Level 1―Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets.
• Level 2 ― Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

-Quoted prices for similar assets or liabilities in active markets

-Quoted prices for identical or similar assets or liabilities in markets that are not active

-Inputs other than quoted prices that are observable for the asset or liability

- Inputs that are derived principally from or corroborated by observable market data by correlation or other means

• Level 3 ―Inputs that are unobservable and reflect Credco's own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).

Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes Credco's financial assets and financial liabilities measured at fair value on a recurring basis,categorized by GAAP's valuation hierarchy as Level 2 (as described in the preceding paragraphs), as of September 30, 2011 and December 31, 2010:

. Fair Values

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date, and is based on Credco's principal or most advantageous market for the specific asset or liability.

U.S. generally accepted accounting principles (GAAP) provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

• Level 1―Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets.
• Level 2 ― Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

-Quoted prices for similar assets or liabilities in active markets

-Quoted prices for identical or similar assets or liabilities in markets that are not active

-Inputs other than quoted prices that are observable for the asset or liability

- Inputs that are derived principally from or corroborated by observable market data by correlation or other means

• Level 3 ―Inputs that are unobservable and reflect Credco's own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).

Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes Credco's financial assets and financial liabilities measured at fair value on a recurring basis,categorized by GAAP's valuation hierarchy as Level 2 (as described in the preceding paragraphs), as of September 30, 2011 and December 31, 2010:

(Millions)	2011		2010
Assets:
Derivatives(a)	$	668	$	498
Total assets	$	668	$	498
Liabilities:
Derivatives(a)	$	127	$	81
Total liabilities	$	127	$	81

• Refer to Note 6 for the fair values of derivative assets andliabilities on a further disaggregated basis as well as the netting of both (i) cash collateral received or posted under credit support agreements and (ii) derivative assets and derivative liabilities under master netting agreements.These balances have been presented gross in the table above.

Credco did not measure any financial instruments at fair value using significantly unobservable inputs (Level 3) during the nine months ended September 30, 2011 or during the year ended December 31, 2010 nor were there transfers between levels of the valuation hierarchy during those periods.

GAAP requires disclosure of the estimated fair value of all financial instruments. A financial instrument is defined as cash, evidence of an ownership in an entity, or a contract between two entities to deliver cash or another financial instrument or to exchange other financial instruments. The disclosure requirements for the fair value of financial instruments exclude leases, equity method investments, affiliate investments, pension and benefit obligations, insurance contracts and all non-financial instruments.

Valuation Techniques Used in Measuring Fair Value

For the financial assets and liabilities measured at fair value on a recurring basis (categorized in the valuation hierarchy table above), Credco applies the following valuation techniques to measure fair value:

Derivative Financial Instruments

The fair value of Credco's derivative financial instruments, which could be presented as either assets or liabilities on the Consolidated Balance Sheets, is estimated either bythird-party valuation services that use proprietary pricing models or by internal pricing models.The pricing models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgment, and inputs to those models are readily observable from actively quoted markets. The pricing models used are consistently applied and reflect the contractual terms of the derivatives, including the period of maturity, and market-based parameters such as interest rates, foreign exchange rates, equity indices or prices, and volatility.

Credit valuation adjustments are necessary when the market parameters,such as a benchmark curve, used to value derivatives are not indicative of the credit quality of Credco or its counterparties. Credco considers the counterparty credit risk by applying an observable forecasted default rate to the current exposure, which is adjusted by agreements to exchange collateral and/or net derivative assets and derivative liabilities, as applicable. Refer to Note 6 for additional fair value information.

Financial Assets and Financial Liabilities Carried at Other Than Fair Value

The following table discloses the estimated fair value for Credco's financial assets and financial liabilities that are not carried at fair value as ofSeptember 30, 2011 and December 31, 2010:

(Billions)	2011				2010
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Financial Assets:
Assets for which carrying values equal or approximate fair value	$	19	$	19	$	18	$	18
Loans to affiliates	$	10	$	10	$	11	$	11
Financial Liabilities:
Liabilities for which carrying values equal or approximate fair value	$	6	$	6	$	7	$	7
Long-term debt	$	21	$	21	$	19	$	19

The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as ofSeptember 30, 2011 and December 31, 2010, and require management judgment. These figures may not be indicative of their future fair values. The fair value of Credco cannot be reliably estimated by aggregating the amounts presented.

The following methods were used to determine estimated fair values:

Financial Assets for Which Carrying Values Equal or Approximate Fair Value

Financial assets for which carrying values equal or approximate fair value include cash and cash equivalents, cardmember receivables, cardmember loans, due from affiliates, accrued interest and certain other assets. For these assets, the carrying values approximate fair value because they are shortterm in duration or variable rate in nature.

Financial Assets Carried at Other Than Fair Value

Loans to affiliates

Loans to affiliates are recorded at historical cost on the Consolidated Balance Sheets. Fair value is estimated based on either the fair value of the underlying collateral or the terms implicit in the loan agreements as compared with current market terms for similar loans.

Financial Liabilities for Which Carrying Values Equal or Approximate Fair Value

Financial liabilities for which carrying values equal or approximate fair value include short-term debt, short-term debt to affiliates, accrued interest, and certain other liabilities for which the carrying values approximate fair value because they are shortterm in duration, variable rate in nature or have no defined maturity.

Financial Liabilities Carried at Other Than Fair Value

Long-term debt

Long-term debt is recorded at historical issuance cost on the Consolidated Balance Sheets. Fair value is estimated using either quoted market prices or discounted cash flows based on Credco's current borrowing rates for similar types of borrowings.

The fair values of these financial instruments are estimates based upon the market conditions and perceived risks as ofSeptember 30, 2011 and December 31, 2010, and require management judgment. These figures may not be indicative of their future fair values. The fair value of Credco cannot be reliably estimated by aggregating the amounts presented.

The following methods were used to determine estimated fair values:

Financial Assets for Which Carrying Values Equal or Approximate Fair Value

Financial assets for which carrying values equal or approximate fair value include cash and cash equivalents, cardmember receivables, cardmember loans, due from affiliates, accrued interest and certain other assets. For these assets, the carrying values approximate fair value because they are shortterm in duration or variable rate in nature.

Financial Assets Carried at Other Than Fair Value

Loans to affiliates

Loans to affiliates are recorded at historical cost on the Consolidated Balance Sheets. Fair value is estimated based on either the fair value of the underlying collateral or the terms implicit in the loan agreements as compared with current market terms for similar loans.

Financial Liabilities for Which Carrying Values Equal or Approximate Fair Value

Financial liabilities for which carrying values equal or approximate fair value include short-term debt, short-term debt to affiliates, accrued interest, and certain other liabilities for which the carrying values approximate fair value because they are shortterm in duration, variable rate in nature or have no defined maturity.

Financial Liabilities Carried at Other Than Fair Value

Long-term debt

Long-term debt is recorded at historical issuance cost on the Consolidated Balance Sheets. Fair value is estimated using either quoted market prices or discounted cash flows based on Credco's current borrowing rates for similar types of borrowings.

XML

Consolidated Statements of Income and Retained Earnings (Unaudited) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Revenues
Discount revenue earned from purchased cardmember receivables and loans	$ 88	$ 87	$ 321	$ 319
Interest income from affiliates	128	119	376	339
Interest income from investments	2	9	4	28
Finance revenue	9	10	28	30
Total revenues	227	225	729	716
Expenses
Provisions for losses	(8)	11	43	85
Interest expense	181	158	510	416
Interest expense to affiliates	2	4	9	12
Other, net	(49)	(20)	(107)	(50)
Total expenses	126	153	455	463
Pretax income	101	72	274	253
Income tax benefit	(18)	(10)	(21)	(16)
Net income	119	82	295	269
Retained earnings at beginning of period	3,515	3,500	3,496	3,408
Dividends	(607)	(92)	(764)	(187)
Retained earnings at end of period	$ 3,027	$ 3,490	$ 3,027	$ 3,490