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Reserves for Losses
 3 Months Ended
Mar. 31, 2018
Reserves For Losses Card Member Loans and Receivables Disclosure [Abstract]  
Reserve for Losses

4. Reserves for Losses

Reserves for losses relating to Card Member loans and receivables represent management’s best estimate of the probable inherent losses in our outstanding portfolio of loans and receivables as of the balance sheet date. Management’s evaluation process requires certain estimates and judgments.

Changes in Card Member Loans Reserve for Losses

The following table presents changes in the Card Member loans reserve for losses for the three months ended March 31:

(Millions)  20182017
Balance, January 1  $1,706$1,223
Provisions(a)  499337
Net write-offs(b)
Principal(358)(272)
Interest and fees  (71)(51)
Other(c)  1011
Balance, March 31  $1,786$1,248

  • Provisions for principal, interest and fee reserve components.
  • Principal write-offs are presented less recoveries of $106 million and $100 million, and include net write-offs from TDRs of $7 million and $12 million, for the three months ended March 31, 2018 and 2017, respectively. Recoveries of interest and fees were not significant.
  • Includes foreign currency translation adjustments of $6 million and $7 million and other adjustments of $4 million and $4 million for the three months ended March 31, 2018 and 2017, respectively.

Card Member Loans Evaluated Individually and Collectively for Impairment

The following table presents Card Member loans evaluated individually and collectively for impairment and related reserves as of March 31, 2018 and December 31, 2017:

(Millions)  20182017
Card Member loans evaluated individually for impairment(a)$397$367
Related reserves (a)$60$57
Card Member loans evaluated collectively for impairment(b)$72,423$73,032
Related reserves (b)$1,726$1,649

  • Represents loans modified as a TDR and related reserves.
  • Represents current loans and loans less than 90 days past due, loans over 90 days past due and accruing interest, and non-accrual loans. The reserves include the quantitative results of analytical models that are specific to individual pools of loans, and reserves for internal and external qualitative risk factors that apply to loans that are collectively evaluated for impairment.

Changes in Card Member Receivables Reserve for Losses

The following table presents changes in the Card Member receivables reserve for losses for the three months ended March 31:

(Millions)  20182017
Balance, January 1  $521$467
Provisions(a)  242213
Net write-offs(b)  (199)(194)
Other(c)  15
Balance, March 31  $565$491

  • Provisions for principal and fee reserve components.
  • Principal and fee write-offs are presented less recoveries of $88 million and $93 million, including net write-offs (recoveries) from TDRs of $(2) million and $6 million, for the three months ended March 31, 2018 and 2017, respectively.
  • Includes foreign currency translation adjustments of $10 million and $9 million and other adjustments of $(9) million and $(4) million for the three months ended March 31, 2018 and 2017, respectively.

Card Member Receivables Evaluated Individually and Collectively for Impairment

The following table presents Card Member receivables evaluated individually and collectively for impairment, and related reserves, as of March 31, 2018 and December 31, 2017:

(Millions)  20182017
Card Member receivables evaluated individually for impairment(a)$98$80
Related reserves (a)$4$3
Card Member receivables evaluated collectively for impairment$54,143$53,967
Related reserves (b)$561$518

  • Represents receivables modified as a TDR and related reserves.
  • The reserves include the quantitative results of analytical models that are specific to individual pools of receivables, and reserves for internal and external qualitative risk factors that apply to receivables that are collectively evaluated for impairment.