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AMERICAN EXPRESS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CREDIT QUALITY INDICATORS FOR CARD MEMBER LOANS AND RECEIVABLES
The following tables present the key credit quality indicators as of or for the years ended December 31:
2014 2013
Net Write-Off Rate Net Write-Off Rate
Principal
Only(a)
Principal,
Interest, &
Fees(a)
30 Days
Past Due
as a % of
Total
Principal
Only(a)
Principal,
Interest, &
Fees(a)
30 Days
Past Due
as a % of
Total
Card Member Loans:
U.S. Card Services 1.5% 1.7% 1.0% 1.8% 2.0% 1.1%
International Card Services(b) 2.0% 2.4% 1.6% 1.9% 2.3% 1.4%
Card Member Receivables:
U.S. Card Services 1.6% 1.8% 1.7% 1.7% 1.9% 1.6%
International Card Services(b) 1.9% 2.1% 1.3% (c) (c) (c)
2014 2013
Net Loss
Ratio as
a%of
Charge
Volume
90 Days
Past Billing
as a % of
Receivables
Net Loss
Ratio as a % of
Charge Volume
90 Days
Past Billing
as a % of
Receivables
Card Member Receivables:
International Card Services (c) (c) 0.20% 1.1%
Global Commercial Services 0.09% 0.8% 0.08% 0.9%
(a) The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In
addition, because the Company considers uncollectible interest and/or fees in estimating its reserves for credit losses, a net write-off rate including principal,
interest and/or fees is also presented.
(b) Beginning in 2014, write-offs for certain installment loan products have been reclassified from Card Member receivables to Card Member loans. Prior period
write-offs have not been reclassified.
(c) Historically, net loss ratio as a % of charge volume and 90 days past billings as a % of receivables were presented. Beginning in the first quarter 2014, as a result
of system enhancements, 30 days past due as a % of total, net write-off rate (principal only) and Net write-off rate (principal and fees) have been presented.
Refer to Note 4 for additional indicators, including external environmental qualitative factors, management considers in its monthly
evaluation process for reserves for losses.
IMPAIRED CARD MEMBER LOANS AND RECEIVABLES
Impaired loans and receivables are individual larger balance or homogeneous pools of smaller balance loans and receivables for which it is
probable that the Company will be unable to collect all amounts due according to the original contractual terms of the Card Member
agreement. The Company considers impaired loans and receivables to include: (i) loans over 90 days past due still accruing interest, (ii) non-
accrual loans and (iii) loans and receivables modified as troubled debt restructurings (TDRs).
The Company may modify, through various company sponsored programs, Card Member loans and receivables in instances where the
Card Member is experiencing financial difficulty in order to minimize losses and improve collectability while providing Card Members with
temporary or permanent financial relief. The Company has classified Card Member loans and receivables in these modification programs as
TDRs.
Such modifications to the loans and receivables primarily include (i) temporary interest rate reductions (possibly as low as zero percent,
in which case the loan is characterized as non-accrual in the Company’s TDR disclosures), (ii) placing the Card Member on a fixed payment
plan not to exceed 60 months and (iii) suspending delinquency fees until the Card Member exits the modification program. Upon entering
the modification program, the Card Member’s ability to make future purchases is either cancelled or in certain cases suspended until the
Card Member successfully exits the modification program. In accordance with the modification agreement with the Card Member, loans may
revert back to the original contractual terms (including the contractual interest rate) when the Card Member exits the modification program,
which is (i) when all payments have been made in accordance with the modification agreement or, (ii) when the Card Member defaults out of
the modification program. The Company establishes a reserve for Card Member interest charges and fees considered to be uncollectible.
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