|                                                       
|-------------------------------------------------------
|UNITED STATES                                          
|SECURITIES AND EXCHANGE COMMISSION                     
|Washington,
 D.C. 20549                                
|                                                       
|FORM 10-K/A                                            
|                                                       
|Amendment No. 1 to Form 10-K                           
|                                                       
|xANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF     
|THE
 SECURITIES EXCHANGE ACT OF 1934                   
|                                                       
|For the fiscal year ended December 31, 2008            
|OR                                                     
|oTRANSITION 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)                                     |  |                                      
|                                                                    |  |                                      
|One Christina Centre, 301 North Walnut Street                       |  |                                      
|Suite 1002, Wilmington, Delaware                                    |  | 19801-2919                           
|(Address of principal
 executive offices)                           |  | (Zip
 Code)                          
|Registrants telephone
 number including area code: (302) 594-3350.
|                                                                    |  |                                      
|Securities registered pursuant to Section 12 (b) of the
 Act:      

|                               |  |                         
|------------------------------ |  | ------------------------
|                               |  | Name of
 each exchange  
|Title of
 each class           |  | on which
 registered    
|                               |  |                         
|Floating Rate Notes, Series
 C |  | New
 York Stock Exchange
|due June 16, 2011              |  |                         

Securities registered pursuant to
Section 12 (g) of the Act:None.

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

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. YesxNoo

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. YesoNox

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. YesxNoo

Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K/A or any amendment to this Form 10-K/A.
x

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 definition of large
accelerated filer, accelerated filer and small reporting company in Rule
12b-2 of the Exchange Act. (Check one):


|                         |                           
|------------------------ | --------------------------
|Large accelerated filero | Accelerated filero        
|Non-accelerated filerx   | Smaller reporting companyo

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). YesoNox

American Express Company,
through a wholly-owned subsidiary, owns all of the outstanding common stock of
the registrant. Accordingly, there is no market for the registrants common
stock. At March 30, 2009, 1,504,938 shares were outstanding.

Documents
incorporated by reference: None

---



EXPLANATORY NOTE

This Form 10-K/A is being
filed to amend the American Express Credit Corporation (Credco) Annual Report
on Form 10-K for the year ended December 31, 2008 in order to reflect
the restatement of its Consolidated Financial Statements and amendments to
related disclosures as of and for the years ended December 31, 2008 and
2007. Credco is also restating as part of this Form 10-K/A certain
financial and other quarterly information previously issued in its Quarterly
Reports on Form 10-Q for 2008 and 2007; accordingly, Form 10-Q/As for the
affected quarterly periods of 2008 and 2007 will not be filed. The restatement
has no effect on Credcos net cash flows provided by (used in) operating activities, investing
activities and financing activities. All dollar amounts and percentages herein
have been adjusted for the effects of the restatement adjustments.

The restatement is the
result of the correction of a non-cash error in the accounting for a net
investment in a consolidated foreign subsidiary that stemmed from a funding
structure executed in 2004. In the course of preparing the financial statements
for the third quarter of 2009, an error was identified in the initial set up
    of this structure in Credcos subsidiary ledgers that caused an incorrect
    automated bookkeeping entry to be recorded beginning in the third quarter
    of 2007 when a portion of the funding for this net investment was refinanced.
    As a result of this incorrect automated bookkeeping entry, (i) other revenues
    in Credcos
Consolidated Statements of Income and (ii) accrued interest and other
liabilities, retained earnings and the foreign currency translation adjustments
account included in the accumulated other comprehensive income (loss) component
of shareholders equity in Credcos Consolidated Balance Sheets were
incorrect beginning in the third quarter of 2007.

The restatement also
includes the impact of (i) certain other unrelated immaterial errors primarily
impacting income tax provision in Credcos Consolidated Statements of Income
and (ii) the correction of an asset line item reclassification affecting cardmember
receivables and due from affiliates in Credcos Consolidated Balance Sheets.

The effect of the error in
the accounting for a net investment in a consolidated foreign subsidiary,
together with the unrelated immaterial errors affecting the income tax
provision, resulted in an understatement of net income for fiscal year 2008 and
2007 by $119 million (from $745 million to $864 million, as restated) and $5
million (from $720 million to $725 million, as restated), respectively. The
correction of these errors resulted in an increase in our ratio of earnings to
fixed charges from 1.50 to 1.62 (as restated) for fiscal year 2008 and no
change to our ratio of earnings to fixed charges of 1.38 for fiscal year 2007.
The effect of these errors also resulted in an overstatement of net income for
the three month periods ended June 30, 2009 and March 31, 2009 by $41 million
(from $68 million to $27 million, as restated) and $9 million (from $144
million to $135 million, as restated), respectively. The correction of these
errors resulted in a decrease in our ratio of earnings to fixed charges from
1.66 to 1.51 (as restated) for the six month period ended June 30, 2009 and an
increase in this ratio from 1.78 to 1.81 (as restated) for the three month
period ended March 31, 2009.

Notes 1, 2, 3, 10, 13, 14 and 15 to
the Consolidated Financial Statements and Managements Discussion
and Analysis of Financial Condition and Results of Operations - Restatement included
herein also contain information regarding the nature and impact of the restatement.

For the convenience of the
reader, this 10-K/A sets forth the Annual Report on Form 10-K in its entirety.
Other than amending the disclosures relating to the restatement in the items
discussed below, no attempt has generally been made in this 10-K/A to amend or
update other disclosures presented in the original 10-K. Among other things,
forward-looking statements made in the original 10-K have not been revised to
reflect events that occurred or facts that became known to Credco after the
filing of the original 10-K, and such forward-looking statements should be read
in their historical context. Accordingly this 10-K/A should be read in
conjunction with Credcos filings with the Securities and Exchange Commission
(SEC) subsequent to the filing of the original 10-K.

1

---



The following items of the
original Form 10-K are being amended in this Form 10-K/A as a result of the
restatement:

|  |                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------
| | Part I  Item 1  Business                                                                                
|  |                                                                                                           
| | Part I  Item 1A  Risk
 Factors                                                                          
|  |                                                                                                           
| | Part II  Item 6 
 Selected Financial Data                                                               
|  |                                                                                                           
| | Part II  Item 7 
 Managements Discussion and Analysis of Financial Condition and Results of
 Operations
|  |                                                                                                           
| | Part II  Item 7A 
     Quantitative and Qualitative Disclosures about Market Risk                       
|  |                                                                                                           
| | Part II  Item 8 
 Financial Statements and Supplementary Data                                           
|  |                                                                                                           
| | Part II  Item 9A(T) 
 Controls and Procedures; and                                                      
|  |                                                                                                           
| | Part IV Item15  Exhibits
 and Financial Statement Schedules                                             

In addition, Credco is
amending its Quarterly Reports on Form 10-Q for the periods ended March 31,
2009 and June 30, 2009 for the impact of the errors described above;
accordingly, separate Form 10-Q/As for these periods are being filed.

As reported in American
Express Companys Quarterly Report on Form 10-Q for the period ending September
30, 2009, American Express Company determined that the impact of the incorrect
accounting was not material to its financial statements American Express Company
in any of the quarterly or annual periods in which it occurred. American Express
Company also determined that the restatement by Credco would have no impact on,
and would not require amendment of, any of American Express Companys
financial statements and related disclosures previously filed with the SEC.

2

---



PART I

|        |         
|------- | --------
|Item 1. | BUSINESS

Introduction

Credco was
incorporated in Delaware in 1962 and was acquired by American Express Company
(American Express) in December 1965. On January 1, 1983, Credco became a
wholly-owned subsidiary of American Express Travel Related Services Company,
Inc. (TRS), a wholly-owned subsidiary of American Express. Both American
Express and TRS are bank holding companies.

Credco is
primarily engaged in the business of financing non-interest-bearing cardmember
receivables arising from the use of the American Expressâ
Card, the American Expressâ Gold Card,
Platinum Cardâ, Corporate Card and other American Express
Cards issued in the United States, and in designated currencies outside the
United States. Credco also purchases certain interest-bearing and discounted
revolving loans comprised of American Express credit cards and Sign &
Travelâ, 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.

American Express Card
Business

American
Express is a world leader in providing charge and credit cards to consumers,
small businesses and corporations. These cards include cards issued by American
Express as well as cards issued by third-party banks and other institutions
that are accepted on the American Express network. American Express cards
permit its cardmembers to charge purchases of goods and services in most
countries around the world at the millions of merchants that accept Cards
bearing American Express logo.

American
Express various products and services are sold globally to diverse customer
groups, including consumers, small businesses, middle-market companies, and
large corporations. As a merchant processor, TRS accepts and processes from
each participating establishment the charges arising from cardmember purchases.
TRS charges a fee, the merchant discount, to the merchant that is principally
determined by the value that is delivered to the service establishment and
generally represents a premium over other card networks. Value is delivered to
the service establishment through higher spending cardmembers relative to users
of cards issued on competing card networks, marketing expertise and the
cardmembers insistence on using their cards when enrolled in rewards or other
card loyalty programs, including cardmembers who are part of American Express
Corporate Card program. When establishing the discount rate, consideration is
also given to a number of other factors, such as industry specific
requirements, estimated charge volume and payment terms.

The charge
card, which is marketed in the United States and many other countries and
carries no preset spending limit, is primarily designed as a method of payment
and not as a means of financing purchases of goods or services. Charges are
approved based on a variety of factors, including a cardmembers current spending
patterns, payment history, credit record and financial resources. Charge cards
generally require payment by the cardmember of the full amount billed each
month, and no finance charges are assessed on the balance. Charge card accounts
that are past due are subject, in most cases, to a delinquency assessment and,
if not brought to current status, may be cancelled. The no preset-spending
limit and pay-in-full nature of these products attract high-spending
cardmembers who want to use a charge card to facilitate larger payments. TRS
and its licensees also offer a variety of revolving credit cards marketed in
the United States and other countries. These cards have a range of payment
terms, grace periods, and rate and fee structures.

The American
Express card businesses are subject to extensive regulations in the United
States, as well as in foreign jurisdictions. In the United States, the business
is subject to a number of federal laws and regulations, including:

3

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|  |                                                                                                                                                                                                                                                                                                                                                   
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the Equal
 Credit Opportunity Act (which generally prohibits discrimination in the
 granting and handling of credit);                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the Fair
 Credit Reporting Act (FCRA) as amended by the Fair and Accurate Credit
 Transactions Act (FACT Act) (which, among other things, regulates use by
 creditors of consumer credit reports and credit prescreening practices and
 requires certain disclosures when an application for credit is rejected);                                 
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the Truth in
 Lending Act (TILA) (which, among other things, requires extensive disclosure
 of the terms upon which credit is granted), including the amendments to TILA
 that were adopted through the enactment of the Fair Credit and Charge Card
 Disclosure Act (which mandates certain disclosures on credit and charge card
 applications);
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the Fair
 Credit Billing Act (which, among other things, regulates the manner in which
 billing inquiries are handled and specifies certain billing requirements);                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the
 Electronic Funds Transfer Act (which regulates disclosures and settlement of
 transactions for electronic funds transfers including those at ATMs);                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the final
 rules recently issued by the Federal Reserve amending Regulation AA (i.e.,
 UDAP) (which prohibits certain acts or practices in connection with consumer
 credit card accounts) and Regulation Z (which substantially revises the
 open-end credit provisions of Regulation Z); and                                                    
|  |                                                                                                                                                                                                                                                                                                                                                   
| | federal and
 state laws and regulations that generally prohibit engaging in unfair and
 deceptive business practices.                                                                                                                                                                                                                             

Certain
federal privacy-related laws and regulations govern the collection and use of
customer information by financial institutions. Federal legislation also
regulates abusive debt collection practices. In addition, a number of states,
the European Union and many foreign countries in which American Express
operates have significant consumer credit protection, disclosure and
privacy-related laws (in certain cases more stringent than the laws in the
United States). The application of bankruptcy and debtor relief laws affect
Credco to the extent that such laws result in amounts owed being classified as
delinquent and/or charged-off as uncollectible. Card issuers and card networks
are subject to certain provisions of the Bank Secrecy Act as amended by the
Patriot Act, with regard to maintaining effective anti-money laundering programs.

General Nature of Credcos Business

Credco
generally purchases certain cardmember receivables and cardmember loans arising
from the use of the card throughout the world pursuant to agreements (the
Receivables Agreements) with TRS and certain of its subsidiaries that issue the
card (Card Issuers). Net income primarily depends on the volume of receivables
arising from the use of the card purchased by Credco, the discount rates
applicable thereto, the relationship of total discount to Credcos interest
expense and the collectibility of the receivables purchased. The average life
and collectibility of accounts receivable generated by the use of the card are
affected by factors such as general economic conditions, overall levels of
consumer debt and the number of new cards issued.

In October 2008, American
Express moved to increase its flexibility in funding U.S. consumer and small
business charge card receivables by amending the Receivables Agreements between
Credco and each of American Express Centurion Bank (Centurion Bank) and
American Express Bank, FSB (FSB), (together, the Banks). The previous
agreements called for the Banks, which issue American Express U.S. consumer
and small business charge cards, to sell all unsecuritized receivables related
to spending on those cards to Credco. The amended agreements will give the
Banks the flexibility to continue to sell the receivables to Credco or to
retain the receivables and fund them from their own sources. These amendments
will allow American Express to shift, from time-to-time, the funding of those
receivables from Credco to the Banks. Credco has traditionally financed the
purchase of receivables principally through the issuance of commercial paper,
including issuance to the Commercial Paper Funding Facility (CPFF), discussed
further below, as well as through the sale of medium- and long-term debt notes.
However, Credco can transfer proceeds of its funding activities in excess of
its needs broadly to other subsidiaries of American Express, including to the
Banks. The new arrangements between Credco and the Banks will have no impact on
Credcos funding of U.S. corporate charge card receivables and charge card
receivables outside the United States.

4

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Credco believes the above
changes will lead to a material reduction of purchases of cardmember
receivables. However, it is not expected that these reductions will have a
material impact on its fixed charge coverage ratio. For additional discussion
on the fixed charge ratio, refer to page 26 below.

Credco generally
purchases cardmember receivables and loans without recourse. Amounts resulting
from unauthorized charges (for example, those made with a lost or stolen card)
are excluded from the definition of receivables and loans under the Receivables
Agreements and are not eligible for purchase by Credco. If the unauthorized
nature of the charge is discovered after purchase by Credco, the Card Issuer
repurchases the charge from Credco.

Credco
generally purchases non-interest and interest-bearing cardmember receivables at
face amount less a specified discount, which is determined at the time of
purchase based upon the nature of the receivables. The discount rate applicable
to purchases of new receivables is negotiated to reflect the changes in money
market interest rates or significant changes in the collectibility of the
receivables. New groups of cardmember receivables are generally purchased net
of reserve balances.

Cardmember
loans are primarily funded by subsidiaries of TRS other than Credco, although
certain cardmember loans are purchased by Credco. These cardmember loans
consist of certain interest-bearing and discounted revolving loans comprised of
American Express credit card and Sign & Travelâ
receivables.

As part of its receivables
funding activities, Credco regularly reviews funding sources and strategies in
international markets. Credco funds cardmember receivables and cardmember loans
in Canada primarily through loans to Amex Bank of Canada, the card issuer and a
wholly-owned subsidiary of TRS, rather than through the purchase of receivables
without recourse. In Australia, the United Kingdom and Mexico, Credco funds
cardmember receivables and cardmember loans by acquiring such receivables and
loans with recourse from the local card issuers, which are wholly-owned subsidiaries of TRS. These local funding strategies
result in Credco recording additional loans to affiliates.

In conjunction with TRS
securitization program, Credco, through its wholly-owned subsidiary, Credco
Receivables Corporation (CRC), purchased participation interests from American
Express Receivables Financing Corporation V LLC (RFC V), which is consolidated
by TRS. The participation interests purchased represented the undivided
interests in cardmember receivables transferred to the American Express
Issuance Trust (AEIT) by TRS. TRS and its subsidiaries originated the
receivables. AEIT is a non-qualifying special purpose entity that is
consolidated by RFC V.

A subsidiary
of TRS, as agent for Credco, underwrites the cardmember receivables and loans
and thus establishes credit standards for cardmembers on Credcos behalf. In
addition, the subsidiary of TRS performs accounting, clerical and other
services necessary to bill and collect all cardmember receivables and loans
owned by Credco. The Receivables Agreements provide that, without prior written
notice to Credco, the credit standards used to determine whether a card is to
be issued to an applicant may not be materially reduced and the policy as to
the cancellation of cards for credit reasons may not be materially liberalized.

American
Express, as the parent of TRS, has agreed with Credco that it will take all
necessary steps to assure performance of certain TRS obligations under the
Receivables Agreements between TRS and Credco. The Receivables Agreements may
be terminated at any time by the parties thereto, generally upon little or no
notice. The obligations of Credco are not guaranteed under the Receivables
Agreements or otherwise by American Express or the Card Issuers.

5

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Current
Economic Environment/Outlook

During the latter half of
2008, concerns over the availability and cost of credit, a historic decline in
real estate values in the United States,
rising unemployment, and the collapse of major financial institutions
contributed to a worsening global recession, increased volatility and reduced
liquidity in the capital markets, and diminished expectations for the economy.
American Express experienced slowing cardmember spending (including a year over
year decline in spending in the fourth quarter of the year) and loan volumes
and higher delinquencies as increasing stress in the worldwide financial
markets eroded consumer and business confidence levels. Based on these trends,
American Express expects consumer and business sentiment will likely
deteriorate further and will translate into weaker economies around the globe
and increased unemployment through 2009, which may result in declines in credit
and charge card usage. If this occurs, the impact on Credco is likely to be a
reduction in purchases of cardmember receivables and loans.

As further discussed in the
Funding section below, since late September 2008, the market for unsecured term
debt generally has been unavailable to all financial institutions, including
Credco. However, Credco has continued to issue commercial paper. Its commercial
paper issuances have occurred in similar daily average amounts and comparable
rates but at shorter weighted average maturities than Credcos historical
trend. Credcos shorter maturities are consistent with the changes in issuance
maturities occurring across the overall commercial paper market, as reported by
the Federal Reserve Board (the Board). The shortening of the maturities in the
commercial paper funding market makes it more difficult for Credco to manage
its day-to-day cash flow.

On October 7, 2008, the
Board announced the creation of the CPFF. The CPFF provides three month
liquidity to U.S. issuers of commercial paper through a special purpose vehicle
(SPV), which purchases three month unsecured and asset-backed commercial paper
directly from eligible issuers using financing provided by the Federal Reserve
Bank of New York. The commercial paper must be rated at least A1/P1/F1 by a
major nationally recognized statistical rating organization (NRSRO) and, if
rated by multiple major NRSROs, must be rated at least A1/P1/F1/R1 (middle) by
two or more NRSROs. Credco is eligible to have up to $14.7 billion of
commercial paper outstanding with the SPV at any one time. The SPV is currently
scheduled to cease purchasing commercial paper on October 30, 2009, unless the
Board extends the facility. At December 31, 2008, Credco had $7.3 billion of
commercial paper outstanding, including $4.5 billion under the CPFF, as further
discussed in the Consolidated Liquidity and Capital Resources section. As of
March 30, 2009, there was no commercial paper outstanding under the CPFF.

Volume of Business

The following
table shows the volume of all cardmember receivables and cardmember loans
purchased by Credco during each of the years indicated, together with
cardmember receivables and cardmember loans owned by Credco at the end of such
years (billions):

|     |  |                                                                                    |     |                                               |   |       |  |          |     |         |   |       |  |   |   |  |   |    | 
|---- |  | ---------------------------------------------------------------------------------- | --- | --------------------------------------------- | - | ----- |  | -------- | --- | ------- | - | ----- |  | - | - |  | - | -- | 
|     |  | Volume of Gross
 Receivables and Loans Purchased
 For the Years Ended December 31, |     | Receivables and Loans Owned 
 at December 31, |  
|     |  |                                                                                    |     |                                               |  
|Year |  | Domestic                                                                           |     | Foreign                                       |   | Total |  | Domestic |     | Foreign |   | Total | 
|     |  |                                                                                    |     |                                               |   |       |  |          |     |         |   |       | 
|2008 |  | $                                                                                  | 204 |                                               | $ | 38    |  | $        | 242 |         | $ | 8     |  | $ | 3 |  | $ | 11 | 
|2007 |  |                                                                                    | 262 |                                               |   | 31    |  |          | 293 |         |   | 24    |  |   | 3 |  |   | 27 | 
|2006 |  |                                                                                    | 251 |                                               |   | 30    |  |          | 281 |         |   | 25    |  |   | 3 |  |   | 28 | 
|2005 |  |                                                                                    | 233 |                                               |   | 27    |  |          | 260 |         |   | 22    |  |   | 3 |  |   | 25 | 
|2004 |  |                                                                                    | 189 |                                               |   | 51    |  |          | 240 |         |   | 20    |  |   | 3 |  |   | 23 | 

The reduction
in volumes of receivables and loans purchased during 2008 and receivables and
loans owned at December 31, 2008, compared to prior periods is primarily due to
the amendment to the Receivables

6

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Agreements in
October 2008, as discussed previously, and to a lesser extent to a reduction in
purchases resulting from lower cardmember spending in the fourth quarter of
2008 compared to the same period a year ago.

Cardmember
Receivables

At December
31, 2008 and 2007, Credco owned $10.9 billion and $26.2 billion of 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 Receivables Corporation (CRC)s purchases of the participation
interests from American Express Receivables Financing Corporation V LLC (RFC V)
in conjunction with TRS securitization program. At December 31, 2008
and 2007, CRC owned approximately $2.4 billion and $5.7 billion, respectively,
of participation interests purchased from RFC V.

The following
table summarizes selected information related to the cardmember receivables
portfolio:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      |        |               |   |               |   |   |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ------------- | - | ------------- | - | - | ------ | -
|Years ended
 December 31, (Millions, except percentages)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 2008 |        | 2007
Restated |   | 2006
Restated |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      |        |               |   |               |  
|Total cardmember receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | $    | 10,859 |               | $ | 26,233        |   | $ | 27,506 |  
|Loss reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | $    | 204    |               | $ | 831           |   | $ | 739    |  
|as
     a % of receivables (a)(d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      | 1.9    | %             |   | 3.2           | % |   | 2.7    | %
|Average life
     of cardmember receivables (in days) (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |      | 33     |               |   | 34            |   |   | 32     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      |        |               |   |               |   |   |        |  
|Cardmember receivables  180 day write-off (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | $    | 2,444  |               |   | N/A           |   |   | N/A    |  
|30 days past due as a % of total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      | 2.6    | %             |   | N/A           |   |   | N/A    |  
|Average receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | $    | 11,413 |               |   | N/A           |   |   | N/A    |  
|Write-offs, net of recoveries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | $    | 893    |               |   | N/A           |   |   | N/A    |  
|Net write-off rate (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |      | 7.8    | %             |   | N/A           |   |   | N/A    |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      |        |               |   |               |   |   |        |  
|Cardmember receivables  360 day write-off                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | $    | 8,415  |               | $ | 26,233        |   | $ | 27,506 |  
|90 days past due as a % of total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      | 2.8    | %             |   | 4.1           | % |   | 3.3    | %
|Write-offs, net of recoveries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | $    | 146    |               | $ | 658           |   | $ | 525    |  
|Net write-off rate (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |      | 0.12   | %             |   | 0.23          | % |   | 0.19   | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      |        |               |   |               |   |   |        |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(a)
 In the fourth quarter of 2008, American Express revised the time period in
 which past due cardmember receivables for its U.S. Card Services segment are
 written off to 180 days past due, consistent with applicable bank regulatory
 guidance. Previously, receivables were written off when 360 days past due.
 Credcos receivables subject to 180 day write-off and the related net
 write-off rate, which reflects write-offs, net of recoveries expressed as a
 percentage of the average amount of cardmember receivables owned by Credco at
 the beginning of the year and at the end of each month in each of the years
 indicated, are reflected above, and includes $257 million of net write-offs
 as result of the methodology change. See further discussion in Notes 2 and 3
 of the Consolidated Financial Statements.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(b)
 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(c)Credcos
 write-offs, net of recoveries, expressed as a percentage of the volume of
 cardmember receivables purchased by Credco in each of the years indicated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(d)The
 loss reserve as a % of receivables for the nine months ended September 30, 2008
     was 3.2% (restated); for the six months ended June 30, 2008 was 3.1% (restated)
     and for the three months ended March 31, 2007 was 2.9% (restated). For all
     other quarterly periods in 2008 and 2007, the loss reserve as a % of receivables
     did not change from amounts previously disclosed.                                                                                                                                                                                                                                                                                                                                                                                                                                    

Cardmember receivables owned
at December 31, 2008, decreased approximately $15.4 billion from December 31,
2007, primarily as a result of a reduction of cardmember receivables purchased
due to the amendment to the Receivables Agreements.

7

---



Reserves for Cardmember Receivables and Cardmember Loans

The following table presents the changes in the reserve for losses related to cardmember
receivables and loans:

|                                                                                      |  |      |       |      |   |      |   |   |     |  
|------------------------------------------------------------------------------------- |  | ---- | ----- | ---- | - | ---- | - | - | --- | -
|Years Ended December 31, (Millions)                                                   |  | 2008 |       | 2007 |   | 2006 |  
|                                                                                      |  |      |       |      |   |      |  
|Reserve for losses:                                                                   |  |      |       |      |   |      |   |   |     |  
|Balance at beginning of year                                                          |  | $    | 841   |      | $ | 749  |   | $ | 686 |  
|Additions:                                                                            |  |      |       |      |   |      |   |   |     |  
|Provisions for losses (a)                                                             |  |      | 641   |      |   | 842  |   |   | 589 |  
|Other credits (b)                                                                     |  |      | 46    |      |   | 14   |   |   | 11  |  
|Deductions:                                                                           |  |      |       |      |   |      |   |   |     |  
|Accounts written-off (a) (c)                                                          |  |      | 1,204 |      |   | 666  |   |   | 532 |  
|Other charges (d)                                                                     |  |      | 106   |      |   | 98   |   |   | 5   |  
|                                                                                      |  |      |       |      |   |      |   |   |     |  
|                                                                                      |  |      |       |      |   |      |   |   |     |  
|Balance at end of year                                                                |  | $    | 218   |      | $ | 841  |   | $ | 749 |  
|                                                                                      |  |      |       |      |   |      |   |   |     |  
|                                                                                      |  |      |       |      |   |      |   |   |     |  
|Reserve for losses as a % of gross
 cardmemberreceivables and loans owned at year-end |  |      | 1.9   | %    |   | 3.2  | % |   | 2.7 | %
|                                                                                      |  |      |       |      |   |      |   |   |     |  

|    |                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes recoveries on
 accounts previously written-off of $144 million, $175 million, and $158
 million in 2008, 2007 and 2006, respectively.                                            
|   
|(b) | Reserve balances applicable
 to new groups of cardmember receivables and loans purchased from TRS and
 certain of its subsidiaries and participation interests purchased from
 affiliates.
|   
|(c) | The net write-offs for 2008
 include approximately $257 million resulting from the 180 day write-off
 methodology change discussed previously.                                            
|   
|(d) | Primarily relates to
 reserve balances applicable to certain groups of cardmember receivables and
 participation interests sold to affiliates.                                            

8

---



Loans to Affiliates

Credcos loans
to affiliates represent fixed and floating rate interest-bearing intercompany
borrowings by other wholly-owned TRS subsidiaries and American Express.

The components
of loans to affiliates at December 31 were as follows:

|                                             |  |      |        |      |   |        | 
|-------------------------------------------- |  | ---- | ------ | ---- | - | ------ | 
|(Millions)                                   |  | 2008 |        | 2007 |  
|                                             |  |      |        |      |  
|TRS Subsidiaries:                            |  |      |        |      |   |        | 
|American Express Australia Limited           |  | $    | 3,204  |      | $ | 3,897  | 
|American Express Services Europe Limited (a) |  |      | 2,388  |      |   | 3,659  | 
|Amex Bank of Canada                          |  |      | 2,257  |      |   | 2,664  | 
|American Express Centurion Bank (b)          |  |      | 2,225  |      |   |       | 
|American Express International, Inc.         |  |      | 943    |      |   | 535    | 
|American Express Co. (Mexico) S.A. de C.V.   |  |      | 392    |      |   | 446    | 
|American Express Bank (Mexico) S.A. (c)      |  |      | 317    |      |   |       | 
|                                             |  |      |        |      |   |        | 
|Total (d)                                    |  | $    | 11,726 |      | $ | 11,201 | 
|                                             |  |      |        |      |   |        | 

|    |                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In April 2008, Credco
 amended the funding structure with Germany from a transfer of receivables
 with recourse to a purchase of cardmember receivables without recourse,
 thereby reducing the loans to American Express Services Europe Limited by
 approximately $675 million.
|   
|(b) | During 2008, Credco loaned
 $2.2 billion to Centurion Bank as a consequence of the amendment to the
 Receivables Agreements, discussed previously. In February 2009, Centurion
 Bank repaid $2.2 billion to Credco.                                                              
|   
|(c) | During 2008, Credco loaned
 $317 million to American Express Bank (Mexico) S.A.                                                                                                                                                                                                  
|   
|(d) | Of the $11.7 billion
 outstanding of loans to affiliates, approximately $6.0 billion are
 collateralized by the underlying cardmember receivables transferred with
 recourse.                                                                                                    

Due from Affiliates

At December
31, 2008 and 2007, due from affiliates was $3.7 billion and $2.5 billion,
respectively. These amounts relate primarily to a timing difference resulting
from the purchase of cardmember receivables net of remittances from TRS, which
are settled in the subsequent month in the normal course of business.

Short-term Debt to Affiliates

Components of
short-term debt to affiliates at December 31 were as follows:

|                                              |  |      |       |      |   |       | 
|--------------------------------------------- |  | ---- | ----- | ---- | - | ----- | 
|(Millions)                                    |  | 2008 |       | 2007 |  
|                                              |  |      |       |      |  
|American Express                              |  | $    | 3,579 |      | $ | 1,953 | 
|AE Exposure Management Ltd.                   |  |      | 2,356 |      |   | 2,240 | 
|TRS                                           |  |      | 1,483 |      |   | 1,808 | 
|American Express Holdings (Netherlands)
 C.V. |  |      | 417   |      |   | 377   | 
|American Express Europe Limited               |  |      | 175   |      |   |      | 
|National Express Company, Inc.                |  |      | 91    |      |   | 2,083 | 
|American Express Publishing Corp.             |  |      | 84    |      |   | 93    | 
|Other                                         |  |      | 132   |      |   | 128   | 
|                                              |  |      |       |      |   |       | 
|Total                                         |  | $    | 8,317 |      | $ | 8,682 | 
|                                              |  |      |       |      |   |       | 

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.

Sources of Funds

Credcos business
is financed by short-term borrowings consisting principally of commercial
paper, borrowings under bank credit facilities in certain international
markets, and issuances of U.S. and non-U.S.

9

---



dollar
short-term and long-term borrowings, as well as through operations and
intercompany borrowings. Historically, short-term borrowings consisted of
commercial paper. Since September 2008, Credcos reliance on commercial paper
as a funding source has diminished considerably. This short-term source has not
been replaced with other types of short-term debt as Credcos funding needs
have decreased because of the reduction of receivable purchases due to the
amendment to the Receivables Agreements discussed previously, and to a lesser
extent to a reduction in purchases resulting from lower cardmember spending in
the fourth quarter of 2008 compared to the same period a year ago. The weighted
average interest rates on an annual basis of all borrowings, after giving
effect to commitment fees under lines of credit and the impact of interest rate
swaps, during the following years were:

|     |  |                                
|---- |  | -------------------------------
|     |  |                                
|Year |  | Weighted Average
 Interest Rate
|     |  |                                
|2008 |  | 3.95%                          
|2007 |  | 5.26%                          
|2006 |  | 4.63%                          
|2005 |  | 3.63%                          
|2004 |  | 2.98%                          

See Notes 5
and 6 to the Consolidated Financial Statements for additional information about
Credcos short-term and long-term debt, including lines of credit.

Foreign Operations

See Notes 2, 8
and 14 to the Consolidated Financial Statements for information about Credcos
foreign exchange translation and operations in different geographic regions.

Employees

At December
31, 2008 and 2007, Credco had 22 and 23 employees, respectively.

10

---



|         |             
|-------- | ------------
|Item 1A. | RISK FACTORS

Based on the
information currently known Credco believes that the matters discussed below
identify the most significant risk factors affecting Credco. However, the risks
and uncertainties that Credco faces are not limited to those described below.
Additional risks and uncertainties not presently known to Credco or that Credco
currently believes to be immaterial may also adversely affect Credcos business
and the trading price of its securities.


Adverse capital and
credit market conditions may significantly affect Credcos ability to meet
liquidity needs, access to capital and cost of capital.

The money and capital
markets have been experiencing extreme volatility and disruption since August
2007, which have negatively impacted market liquidity conditions. In recent
months, the volatility and disruption have reached unprecedented levels.

The concerns
on the part of market participants have focused on a broad range of mortgage-
and asset-backed and other fixed income securities, including those rated
investment grade, the U.S. and international credit and interbank money markets
generally, and a wide range of financial institutions and markets, asset
classes and sectors. As a result, the market for fixed income instruments has
experienced decreased liquidity, increased price volatility, credit downgrade
events and increased probability of default. Securities that are less liquid
are more difficult to value and may be hard to dispose of. Domestic and
international equity markets have also been experiencing heightened volatility
and turmoil, with issuers (such as Credco) that have exposure to or rely on the
credit markets particularly affected.

Credco relies
on liquidity to pay operating expenses, interest on debt and dividends on
capital stock and to repay maturing liabilities. Without sufficient liquidity,
Credco could be forced to limit its business in growth or curtail operations.
The principal sources of Credcos liquidity are payments from cardmembers, cash
flow from its investment portfolio and assets, consisting mainly of cash or
assets that are readily convertible into cash, and issuances of commercial paper.
Sources of liquidity in normal markets also include a variety of short- and
long-term instruments, including medium- and long-term unsecured debt.

Notwithstanding
Credcos solid financial position, Credco is not immune from the pressures
brought on by the current crisis in the financial markets. The fragility of the
credit markets and the current economic environment have impacted financial
services companies through market volatility and fluctuations, loss of
confidence and rating agency actions. Since September 2008, the market for
Credco term unsecured debt, like that for virtually all financial institutions,
has been effectively frozen. Therefore, Credcos ability to obtain financing in
the debt capital markets for unsecured term debt is dependent on a renewal of
investor demand.

In the event
current sources of liquidity, including internal sources, do not satisfy
Credcos needs, it could be required to seek additional financing. The
availability of additional financing will depend on a variety of factors such
as market conditions, the general availability of credit, the overall
availability of credit to the financial services industry, Credcos long-term
debt credit ratings, which were downgraded in 2008 by two of the major rating
agencies, and credit capacity. Additionally, it is possible that lenders could
develop a negative perception of Credcos long- or short-term financial
prospects if it incurs large credit losses or if the level of its business
activity decreased due to an economic downturn or due to perceived operational
risk. Similarly, Credcos
access to funds may be impaired if regulatory authorities or rating agencies
take negative actions against Credco. In addition, the CPFF, being made available
through the Federal Reserve Bank of New York, is subject to Credcos ability
to meet or continue to meet the criteria for participation in such program and
is temporary in nature as such programs is scheduled to terminate during 2009.

Disruptions,
uncertainty or volatility in the capital and credit markets may also limit
Credcos access to capital required to operate its business. Such market
conditions may limit its ability to replace, in a timely manner, maturing
liabilities, satisfy regulatory capital requirements and access the capital
necessary to grow

11

---



its business. As such,
Credco may be forced to delay raising capital, issue shorter-tenured securities
than it prefers, or bear an unattractive cost of capital, which could
decrease profitability and significantly reduce financial flexibility.

If current levels
of market disruption and volatility continue or worsen, there can be no
assurance that Credco will not experience an adverse effect, which may be
material, on Credcos ability to access capital and on its business, financial
condition and results of operations.

Difficult conditions
in the global capital markets and the economy generally may materially
adversely affect Credcos business and results of operations, and Credco does
not expect these conditions to improve in the near future.

Credcos results
of operations are materially affected by conditions in the global capital
markets and the economy in general, both in the United States and elsewhere.
The stress experienced by global capital markets that began in the second half
of 2007 continued and substantially increased during 2008, and Credco does not
expect these conditions to improve in the near future.

Recently,
concerns over the availability and cost of credit, the U.S. mortgage market, a
declining real estate market in the United States (in particular, in those
markets in which American Express has generated significant spend volume on its
charge and credit card products) and geopolitical issues have contributed to
increased volatility and diminished expectations for the economy and the markets
going forward. These factors, combined with declining business and consumer
confidence and increased unemployment and volatile oil prices, have
precipitated a global recession, which may cause further declines in credit and
charge card usage and has already resulted in adverse changes in payment
patterns, causing increases in delinquencies and default rates. If the
performance of its charge card and credit card portfolios continues to weaken
through increasing delinquencies and write-offs, American Express and Credcos
long-term and short-term debt ratings could be downgraded and Credcos access
to capital could be materially adversely affected and cost of capital could
increase.

These events
and the continuing market upheavals may have an adverse effect on Credco, in
part because it is dependent upon consumer and business behavior. Credcos
revenue growth is likely to decline in such circumstances and, in certain
instances, revenues may decrease, and its profit margins could erode. In
addition, in the event of extreme prolonged market adversity, such as the
global credit crisis and economic slowdown, Credco could incur significant
losses.

The lack of
available credit, lack of confidence in the financial markets, reduced consumer
and business spending, and worsening credit metrics also pose other risks to
Credcos results of operations and financial condition. In particular, Credco
may face the following risks, among others, in connection with these events:

| |   |                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The
 processes Credco uses to estimate losses may no longer be reliable because
 they rely on complex judgments, including forecasts of economic conditions,
 that may no longer be capable of accurate estimation.                      
| |   |                                                                                                                                                                                                                                          
| |  | American
 Express ability to assess the creditworthiness of its customers may be
 impaired if the models and approaches it uses to select, manage, and
 underwrite credit to its customers become less predictive of future
 write-offs.

Political or
economic instability in certain regions or countries could also affect American
Express commercial or other lending activities, among other businesses, or
result in restrictions on convertibility of certain currencies.

Terrorist
attacks, natural disasters or other catastrophic events may have a negative
effect on Credcos

12

---



business and infrastructure,
including its information technology systems. Because Credco derives a portion
of its revenues from travel-related spending, its business will be sensitive to
safety concerns, and thus may decline during periods in which travelers become
concerned about safety issues or when travel might involve health-related
risks.

As the
conditions described above (or similar ones) persist or worsen, Credco could
experience continuing or increased adverse effects on its results of operations
and financial condition.

The impairment of
other financial institutions could adversely affect Credco.

Credcos
ability to engage in routine funding transactions could be adversely affected
by the actions and commercial soundness of other financial services institutions.
Financial services institutions are interrelated as a result of trading,
clearing, counterparty or other relationships. Credco routinely executes
transactions with counterparties in the financial services industry, including
commercial banks, investment banks and insurance companies. Defaults or
non-performance by, or even rumors or questions about, one or more financial
services institutions, or the financial services industry generally, have led
to market-wide liquidity problems and could lead to losses or defaults by one
or more of Credcos counterparties, which, in turn, could have a material
adverse effect on Credcos results of operations and financial condition.

Any reduction in
Credcos credit ratings could increase the cost of its funding from and
restrict Credcos access to the capital markets and have a material adverse
effect on Credcos results of operations and financial condition.

Although
Credcos long-term debt is currently rated investment grade (at A levels)
by the major rating agencies, the ratings of that debt have been downgraded during
the fourth quarter of 2008 by Moodys Investors Services (Moodys)
and Standard
& Poors (S&P), two of the major rating agencies. In addition, recently
both rating agencies have announced that they are reviewing Credcos ratings
with a view to a possible further downgrade. S&P is reviewing both long-
and short-term ratings; Moodys affirmed the current short-term rating and
is reviewing the long-term rating only. The rating agencies regularly evaluate
Credco, and their ratings of Credcos long-term and short-term debt are
based on a number of factors, including Credcos financial strength, perceived
operational risk as well as factors not entirely within Credcos control,
including conditions affecting the financial services industry generally. In
light of the difficulties in the financial services industry and the financial
markets, there can be no assurance that Credco will maintain its current credit
ratings. Failure to maintain those ratings could, among other things, adversely
limit Credcos
access to the capital markets and adversely affect the cost and other terms
upon which Credco is able to obtain funding and increase Credcos cost of
capital.

In addition, a
downgrade of the short-term ratings of Credco below its current P-1/A-1/F1
ratings by two or more rating agencies would cause Credco to be unable to
participate in the CPFF established by the Federal Reserve Bank of New York,
which would have a material adverse effect on Credcos liquidity and its
ability to fund charge card receivables and credit card loans.

Credco cannot
predict what actions rating agencies may take. As with other companies in the
financial services industry, Credcos ratings could be downgraded at any time
and without any notice by any of the rating agencies.

13

---



Adverse currency
fluctuations and foreign exchange controls could decrease revenue Credco
receives from its international operations.

Credco
generates a portion of its revenue from activities outside the United States.
Credco is exposed to foreign exchange risk from its international operations,
and some of the revenue it generates outside the United States is subject to
unpredictable and indeterminate fluctuations if the values of other currencies
change relative to the U.S. dollar. Resulting exchange gains and losses are
included in Credcos net income. Furthermore, Credco may become subject to
exchange control regulations that might restrict or prohibit the conversion of
Credcos other revenue currencies into U.S. dollars. The occurrence of any of
these events or circumstances could decrease the revenues Credco receives from
its international operations and have a material adverse effect on Credcos
business.

The risk management
policies and procedures of Credco and the Card Issuers may not be effective.

Credco must
effectively manage credit risk related to consumer debt, business loans,
merchant bankruptcies, the rate of bankruptcies, and other credit trends which
can affect spending on card products, debt payments by individual and corporate
customers and businesses that accept American Express card products.

Credit risk is
the risk of loss from obligor or counterparty default. Credco is exposed to
credit risk through the cardmember receivables and cardmember loans it
purchases generally without recourse as well as through its participation
interests. Third parties may default on their obligations to us due to
bankruptcy, lack of liquidity, operational failure or other reasons. Country,
regional and political risks are components of credit risk. Rising
delinquencies and rising rates of bankruptcy are often precursors of future
write-offs and may require Credco to increase its reserve for losses. Higher
write-off rates and an increase in Credcos reserve for losses adversely affect
Credcos profitability and may increase Credcos cost of funds.

Although
Credco and the Card Issuers make estimates to provide for credit losses in
their respective outstanding portfolio of loans and receivables, these
estimates may not be accurate. In addition, the information that Credco and the
Card Issuers use in managing their credit risk may be inaccurate or incomplete.
Although Credco regularly reviews its and the Card Issuers credit exposure to
specific clients and counterparties and to specific industries, countries and
regions that Credco and the Card Issuers believe may present credit concerns,
default risk may arise from events or circumstances that are difficult to
foresee or detect, such as fraud. Credco and the Card Issuers may also fail to
receive full information with respect to the credit risks of customers.

Credco must
also effectively manage market risk to which it is exposed. Market risk is the
risk to earnings or value resulting from movements in market prices. Credco is
exposed to market risk from interest rates in Credcos Card business and in its
investment portfolios. Changes in the interest rates at which Credco borrows
and lends money affect the value of Credcos assets and liabilities. If the
rate of interest Credco pays on its borrowings increases more than the discount
rate Credco earns on purchases of receivables and the rate of interest Credco
earns on its loans, its net interest yield, and consequently Credcos net
income, could fall.

Credco must
also accurately estimate the fair value of the assets in its investment
portfolio and, in particular, those investments that are not readily
marketable.

Additionally,
Credco must also effectively manage liquidity risk to which it is exposed.
Liquidity risk is defined as the inability to access cash and equivalents
needed to meet business requirements and satisfy Credcos obligations. If
Credco is unsuccessful in managing its liquidity risk, Credco may maintain too
much liquidity, which can be costly and limit financial flexibility, or Credco
may be too illiquid, which could result in financial distress during a
liquidity event. For additional information regarding Credco management of
liquidity risk, see Adverse capital and
credit market conditions may significantly affect Credcos ability to meet
liquidity needs, access to capital and cost of capital above.

14

---



Finally,
Credco must also manage the operational risks to which it is exposed. Credco
considers operational risk to be the risk of not achieving business objectives
due to inadequate or failed processes or information systems, human error, or
the external environment, such as natural disasters. Operational risks include
the risk that Credco may not comply with specific regulatory or legal
requirements, exposing Credco to fines and/or penalties and possibly brand
damage; employee error or intentional misconduct that results in a material
financial misstatement; or a failure to monitor an outsource partners
compliance with a service level agreement, resulting in economic harm to Credco.

On November
16, 2009, Credco filed an amendment to its Annual Report on Form 10-K for the
fiscal year ended December 31, 2008 in order to restate certain of its
consolidated financial statements and amend related disclosures, as described
in Explanatory Note above. As further described in Item 9A., Controls
and Procedures, Credcos management has concluded that as of December
31, 2008, its disclosure controls and procedures and its internal control over
financial reporting were not effective because of a material weakness in its
internal control over financial reporting relating to the processes used to record
and monitor net investments in consolidated foreign subsidiaries. Although Credco
has taken remedial actions as described in Item 9A., Controls and Procedures,
to address the identified material weakness, there can be no assurance that its
management will determine in the future that its disclosure controls and
procedures or internal control over financial reporting are effective.

Although Credco
and the Card Issuers have devoted significant resources to develop their risk
management policies and procedures and expect to continue to do so in the
future, Credcos risk management techniques and hedging strategies may not be
fully effective. See Item 7A Quantitative and Qualitative Disclosures About
Market Risk for a discussion of the policies and procedures Credco uses to
identify, monitor and manage the risks Credco assumes in conducting its
businesses. Management of credit, market and operational risk requires, among
other things, policies and procedures to record properly and verify a large
number of transactions and events, and these policies and procedures may not be
fully effective.

Credco and its
subsidiaries are dependent on the Card Issuers that generate receivables.

Credco and its
subsidiaries are dependent on the Card Issuers that generate receivables.
Credco and American Express Overseas Credit Corporation Limited (AEOCC), a
wholly-owned subsidiary of Credco, are parties to asset sale and purchase
agreements relating to the purchase of receivables from the Card Issuers. These
receivables agreements generally require that non-interest and interest-bearing
receivables be purchased at discount rates that are negotiated and determined
at the time of purchase based upon the nature of the receivables. Credco and
AEOCC are dependent upon these contractual arrangements. Lower levels of
cardmember receivables and loans generated by the Card Issuers from which
Credco and AEOCC purchase receivables would result in a reduction in the level
of finance operations and a reduction in revenues of Credco and AEOCC. American
Express and TRS operations are independently subject to a variety of risk
factors. The outstanding debt and other securities of Credco and AEOCC are not
obligations of American Express, TRS or its other subsidiaries.

Other Reporting Matters

Accounting Developments

See the
Recently Issued Accounting Standards section of Note 2 to the Consolidated
Financial Statements.

15

---



Forward-looking Statements

Various
statements have been made in this Amendment No. 1 to the Annual Report on Form
10-K 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
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, 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 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:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | credit
 trends, which will depend in part on the economic environment, including,
 among other things, the housing market and the rates of bankruptcies, which
 can affect spending on card products and debt payments by individual and
 corporate customers;                                                                                                                                                                                                                                      
|
| |  | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | negative changes in Credcos credit ratings, which could result in decreased liquidity
 and higher borrowing costs;                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | 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 effect
 of fluctuating interest rates, which could affect Credcos borrowing costs;                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | the impact
 on American Express business resulting from continuing geopolitical
 uncertainty;                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Credcos
 ability to satisfactorily remediate (i) the accounting error resulting in the
 restatement or (ii) its material weakness in internal control over financial
 reporting;                                                                                                                                                                                                                                                                                                                   
|
| |  | 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,
 its 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, including
 changes to the policies, rules and regulations of the Board of Governors of
 the Federal Reserve System;
|
| |  | Credcos
 ability to meet the criteria for participation in the Commercial Paper
 Funding Facility, being made available through the Federal Reserve Bank of New
 York; and                                                                                                                                                                                                                                                                                                                         
|
| |  | Credcos
 ability to access in a timely manner its remaining investment in the Reserve
 Primary Fund.                                                                                                                                                                                                                                                                                                                                                                                               

|         |                          
|-------- | -------------------------
|Item 1B. | UNRESOLVED STAFF COMMENTS

None.

|        |           
|------- | ----------
|Item 2. | PROPERTIES

Credco neither
owns nor leases any material physical properties.

16

---



|        |                  
|------- | -----------------
|Item 3. | LEGAL PROCEEDINGS

There are no
material pending legal proceedings to which Credco or its subsidiaries is a
party or of which any of their property is the subject. Credco knows of no such
proceedings being contemplated by government authorities or other parties.

|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Omitted
pursuant to General Instruction I(2)(c) to Form 10-K.

17

---



PART II

|        |                                                                                                              
|------- | -------------------------------------------------------------------------------------------------------------
|Item 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
 AND ISSUER PURCHASES OF EQUITY SECURITIES

American
Express, through its wholly-owned subsidiary, TRS, owns all of the outstanding
common stock of Credco. Therefore, there is no market for Credcos common
stock.

Credco paid
cash dividends of $580 million and $750 million to TRS in 2008 and 2007,
respectively. On February 10, 2009, Credco paid a cash dividend of $75 million
to TRS. For information about limitations on Credcos ability to pay dividends,
see Note 7 to the Consolidated Financial Statements.

18

---



|        |                        
|------- | -----------------------
|Item 6. | SELECTED FINANCIAL DATA

The following
summary of certain consolidated financial information of Credco was derived
from audited financial statements for the five years ended December 31:

|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|--------------------------------------------- |  | ------------ | ------ | ------------ | - | ------ |  | ---- | ------ | ---- | - | ------ |  | - | ------ | 
|(Millions)                                    |  | 2008         |        | 2007         |   | 2006   |  | 2005 |        | 2004 |  
|                                              |  |              |        |              |   |        |  |      |        |      |  
|                                              |  | Restated (a) |        | Restated (a) |   |        |  |      |        |      |   |        | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |  
|Income Statement Data                         |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Revenues                                      |  | $            | 3,433  |              | $ | 3,870  |  | $    | 3,017  |      | $ | 2,276  |  | $ | 1,832  | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Provisions
 for losses, net of recoveries     |  |              | 641    |              |   | 842    |  |      | 589    |      |   | 662    |  |   | 628    | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Interest
 expense                             |  |              | 1,618  |              |   | 2,046  |  |      | 1,614  |      |   | 1,141  |  |   | 863    | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Income tax
 provision                         |  |              | 132    |              |   | 60     |  |      | 95     |      |   | 50     |  |   | 75     | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Net income                                    |  |              | 864    |              |   | 725    |  |      | 622    |      |   | 415    |  |   | 234    | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Balance Sheet Data                            |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Cash and
 cash equivalents                    |  | $            | 8,855  |              | $ | 2,925  |  | $    | 737    |      | $ | 1,051  |  | $ | 3,802  | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Gross
 cardmember receivables                 |  |              | 10,859 |              |   | 26,233 |  |      | 27,506 | (b)  |   | 24,421 |  |   | 21,888 | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Reserve for
 losses, cardmember receivables   |  |              | 204    |              |   | 831    |  |      | 739    |      |   | 671    |  |   | 555    | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Gross
 cardmember loans                       |  |              | 498    |              |   | 403    |  |      | 356    |      |   | 569    |  |   | 622    | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Reserve for
 losses, cardmember loans         |  |              | 14     |              |   | 10     |  |      | 10     |      |   | 15     |  |   | 55     | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Loans to
 affiliates                          |  |              | 11,726 |              |   | 11,201 |  |      | 9,691  |      |   | 8,254  |  |   | 7,039  | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Investment
 securities (including restricted) |  |              | 3,084  |              |   | 3,044  |  |      | 3,015  |      |   | 2,996  |  |   | 3,183  | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Total assets                                  |  |              | 39,265 |              |   | 45,843 |  |      | 40,963 |      |   | 37,368 |  |   | 36,259 | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Short-term
 debt                              |  |              | 15,684 |              |   | 19,775 |  |      | 15,469 |      |   | 15,982 |  |   | 13,245 | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Current
 portion of long-term debt            |  |              | 5,201  |              |   | 7,411  |  |      | 3,440  |      |   | 2,300  |  |   | 5,734  | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Long-term
 debt                               |  |              | 14,809 |              |   | 14,872 |  |      | 18,350 |      |   | 14,629 |  |   | 12,880 | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Shareholders
 equity                         |  |              | 3,033  |              |   | 3,444  |  |      | 3,419  |      |   | 3,270  |  |   | 2,992  | 
|                                              |  |              |        |              |   |        |  |      |        |      |   |        |  |   |        | 
|Cash
 dividends                               |  |              | 580    |              |   | 750    |  |      | 500    |      |   | 200    |  |   | 125    | 

|    |                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Refer to
 Notes 1, 2, 3, 10, 13, 14 and 15 to the Consolidated Financial Statements and Managements
 Discussion and Analysis of Financial Condition and Results of Operations - Restatement for
 further detailed information related to the restated Consolidated Financial
 Statements.
|    |                                                                                                                                                                                                                                                                                             
|(b) | The 2006 Consolidated Balance Sheet reflects the correction of an asset line item reclassification affecting cardmember receivables and due from affiliates.                                                                                                                                

19

---



|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|Item 7. | MANAGEMENTS
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Restatement

As discussed in Explanatory
Note, American Express Credit Corporation (Credco) is amending its Annual
Report on Form 10-K for the year ended December 31, 2008 in order to reflect
the restatement of its Consolidated Financial Statements and amendments to
related disclosures as of and for the years ended December 31, 2008 and 2007.
Credco is also restating as part of the Form 10-K/A certain financial and other
quarterly information previously issued in its Quarterly Reports on Form 10-Q;
accordingly Form 10-Q/As for the affected quarterly periods of 2008 and 2007
will not be filed. The restatement has no effect on Credcos
net cash flows provided by (used in) operating activities, investing activities
and financing activities. All dollar amounts and percentages herein have been
adjusted for the effects of the restatement adjustments.

The restatement is the
result of the correction of a non-cash error in the accounting for a net
investment in a consolidated foreign subsidiary that stemmed from a funding
structure executed in 2004. In the course of preparing the financial statements
for the third quarter of 2009, an error was identified in the initial set up
    of this structure in Credcos subsidiary ledgers that caused an incorrect
    automated bookkeeping entry to be recorded beginning in the third quarter
    of 2007 when a portion of the funding for this net investment was refinanced.
    As a result of this incorrect automated bookkeeping entry, (i) other revenues
    in Credcos
Consolidated Statements of Income and (ii) accrued interest and other
liabilities, retained earnings and the foreign currency translation adjustments
account included in the accumulated other comprehensive income (loss) component
of shareholders equity in Credcos Consolidated Balance Sheets were
incorrect beginning in the third quarter of 2007.

The restatement also
includes the impact of (i) certain other unrelated immaterial errors primarily
impacting income tax provision in Credcos Consolidated Statements of Income
and (ii) the correction of an asset line item reclassification affecting
cardmember receivables and due from affiliates in Credcos Consolidated Balance
Sheets.

Notes 2, 3, 10, 13, 14 and 15 to
the Consolidated Financial Statements included
herein also contain information regarding the nature and impact of the restatement.

The following tables set
forth the effects of the restatement adjustments on affected line items within
Credcos previously reported Consolidated Statements of Income for the years
ended December 31, 2008 and 2007, Consolidated Balance Sheets as of December
31, 2008 and 2007, and Consolidated Statements of Shareholders Equity for the
years ended December 31, 2008 and 2007, as well as the Ratio of Earnings to
Fixed Charges for the years ended December 31, 2008 and 2007.

20

---



CONSOLIDATED STATEMENTS OF INCOME

|                |  |                          |       |                   |   |                          |  |          |       |  |   |       | 
|--------------- |  | ------------------------ | ----- | ----------------- | - | ------------------------ |  | -------- | ----- |  | - | ----- | 
|                |  | December 31, 2008        |       | December 31, 2007 |  
|                |  |                          |       |                   |  
|(millions)      |  | As
 Previously
 Reported |       | Restated          |   | As
 Previously
 Reported |  | Restated |      
|                |  |                          |       |                   |   |                          |  |          |      
|Other
 revenues |  | $                        | 20    |                   | $ | 203                      |  | $        | 8     |  | $ | 16    | 
|Total revenues  |  | $                        | 3,250 |                   | $ | 3,433                    |  | $        | 3,862 |  | $ | 3,870 | 
|Pretax
 income  |  | $                        | 813   |                   | $ | 996                      |  | $        | 777   |  | $ | 785   | 
|Income tax      |  | $                        | 68    |                   | $ | 132                      |  | $        | 57    |  | $ | 60    | 
|Net income      |  | $                        | 745   |                   | $ | 864                      |  | $        | 720   |  | $ | 725   | 

CONSOLIDATED BALANCE SHEETS

|                                                      |  |                          |        |                    |   |                          |   |          |        |  |   |        | 
|----------------------------------------------------- |  | ------------------------ | ------ | ------------------ | - | ------------------------ | - | -------- | ------ |  | - | ------ | 
|                                                      |  | December
 31, 2008       |        | December
 31, 2007 |  
|                                                      |  |                          |        |                    |  
|(millions)                                            |  | As
 Previously
 Reported |        | Restated           |   | As
 Previously
 Reported |   | Restated |       
|                                                      |  |                          |        |                    |   |                          |   |          |       
|                                                      |  |                          |        |                    |   |                          |   |          |        |  |   |        | 
|Cardmember receivables                                |  | $                        | 10,655 |                    | $ | 10,655                   |   | $        | 25,504 |  | $ | 25,402 | 
|Due from affiliates                                   |  | $                        | 3,660  |                    | $ | 3,660                    |   | $        | 2,367  |  | $ | 2,469  | 
|Accrued interest and other
 liabilities               |  | $                        | 473    |                    | $ | 538                      |   | $        | 339    |  | $ | 341    | 
|Total liabilities                                     |  | $                        | 36,167 |                    | $ | 36,232                   |   | $        | 42,397 |  | $ | 42,399 | 
|Retained earnings                                     |  | $                        | 3,322  |                    | $ | 3,446                    |   | $        | 3,157  |  | $ | 3,162  | 
|Foreign currency
 translation adjustments, net of tax |  | $                        | (379   | )                  | $ | (568                     | ) | $        | 129    |  | $ | 122    | 
|Total accumulated other
 comprehensive (loss) income  |  | $                        | (386   | )                  | $ | (575                     | ) | $        | 127    |  | $ | 120    | 
|Total shareholders equity                            |  | $                        | 3,098  |                    | $ | 3,033                    |   | $        | 3,446  |  | $ | 3,444  | 

CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY

|                                            |  |                          |       |          |   |       |  
|------------------------------------------- |  | ------------------------ | ----- | -------- | - | ----- | -
|(millions)                                  |  | As
 Previously
 Reported |       | Restated |  
|                                            |  |                          |       |          |  
|Net income for year ended December 31, 2007 |  | $                        | 720   |          | $ | 725   |  
|Foreign currency translation adjustments    |  | $                        | 87    |          | $ | 80    |  
|Total comprehensive income                  |  | $                        | 790   |          | $ | 788   |  
|Balances at December 31, 2007               |  | $                        | 3,446 |          | $ | 3,444 |  
|                                            |  |                          |       |          |   |       |  
|Net income for year ended December 31,2008  |  | $                        | 745   |          | $ | 864   |  
|Foreign currency translation adjustments    |  | $                        | (508  | )        | $ | (690  | )
|Total comprehensive income                  |  | $                        | 232   |          | $ | 169   |  
|Balances at December 31, 2008               |  | $                        | 3,098 |          | $ | 3,033 |  

21

---



RATIO OF EARNINGS TO FIXED CHARGES

|           |  |                          |      |          |  |      | 
|---------- |  | ------------------------ | ---- | -------- |  | ---- | 
|(millions) |  | As
 Previously
 Reported |      | Restated | 
|           |  |                          |      |          | 
|           |  |                          |      |          |  |      | 
|2007       |  |                          | 1.38 |          |  | 1.38 | 
|2008       |  |                          | 1.50 |          |  | 1.62 | 

See Note 15 to the
Consolidated Financial Statements for the Consolidated Statements of Income and
the Consolidated Balance Sheets restated for quarters within 2008 and 2007.

Critical Accounting Policies

Credcos significant
accounting policies are described in Note 2 to the Consolidated Financial
Statements. The following provides information about three critical accounting
policies that are important to the Consolidated Financial Statements and that
require significant management assumptions and judgments.

Reserves for cardmember losses

Credcos reserves for losses
relating to cardmember receivables and loans represent managements best
estimate of the losses inherent in Credcos outstanding portfolio of
receivables and loans. Reserves for these losses are primarily based upon
models that analyze specific portfolio statistics, including average write-off
rates for various stages of receivable aging (i.e., current, 30 days, 60 days,
90 days) over a 24-month period and average bankruptcy and recovery rates.
These reserves reflect managements judgment regarding overall adequacy.
Management considers whether to adjust reserves that are calculated by the
analytic models based on other trends, such as the reserves as a percentage of
past-due accounts, reserves as a percentage of cardmember loans and
receivables, and net write-off coverage. Other trends considered include
leading economic and market indicators, such as the unemployment rate, the
consumer confidence index, the purchasing managers index, bankruptcy filings,
concentration of credit risk based on tenure, industry or geographic regions,
and the legal and regulatory environment.

Cardmember loans are
generally written-off when they are 180 days past due. Cardmember receivables
are generally written-off when they are 360 days past due, except that
beginning in 2008, cardmember receivables that are included in American
Express U.S. Card Services segment are written-off when they are 180 days past
due. Such receivables are related to Credco Receivables Corporation (CRC). To
the extent historical credit experience updated for emerging market trends in
credit are not indicative of future performance, actual losses could differ
significantly from managements judgments and expectations, resulting in either
higher or lower future provisions for losses, as applicable. As of December 31,
2008, if an increase in write-off rates was five percent of cardmember
receivables and loans at such date, the reserve for losses would increase by
approximately $11 million. This sensitivity analysis does not represent
managements expectations of the deterioration in write-offs but is provided as
a hypothetical scenario to assess the sensitivity of the provisions for
cardmember losses to changes in key inputs.

The process
for determining the reserve for cardmember losses requires a high degree of
judgment. It is possible that others, given the same information, may at any
point in time reach different reasonable conclusions.

22

---



Fair Value Measurement

Credco holds investment securities and derivative instruments. These
financial instruments are reflected at fair value on Credcos Consolidated
Balance Sheets. Management will make significant assumptions and judgments when
estimating fair value for these financial instruments.

In accordance with Statement of Financial Accounting Standards (SFAS)
No. 157 Fair Value Measurements (SFAS No. 157), the objective of a fair value
measurement is to determine the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date (an exit price). SFAS No. 157 established
a three-level hierarchy of valuation techniques used to measure fair value. The
fair value hierarchy gives the highest priority to the measurement of fair
value based on unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1), followed by the measurement of fair value based on
pricing models with significant observable inputs (Level 2), with the lowest
priority given to the measurement of fair value based on pricing models with
significant unobservable inputs (Level 3).

Effective
January 1, 2008, Credco partially adopted SFAS No. 157 for its financial
assets and liabilities that are accounted for at fair value. Refer to Notes 2
and 11 to the Consolidated Financial Statements for further details of Credcos
fair value measurements.

Investment Securities

Credcos investment securities are comprised of predominantly U.S.
Government and U.S. Government sponsored entities (e.g., Fannie Mae, Freddie
Mac). The investment securities are classified as available-for-sale with
changes in fair value recorded in accumulated other comprehensive (loss) income
within shareholders equity on Credcos Consolidated Balance Sheets.

The fair market values for Credcos investment securities are obtained
primarily from pricing services engaged by Credco, and Credco receives one
price for each security. The fair values provided by the pricing services are
estimated by using pricing models, where the inputs to those models are based
on observable market inputs. The inputs to the valuation techniques applied by
the pricing services vary depending on the type of security being priced but are
typically benchmark yields, benchmark security prices, credit spreads,
prepayment speeds, reported trades, broker-dealer quotes, all with reasonable
levels of transparency. The pricing services do not apply any adjustments to
the pricing models used, nor does Credco apply any adjustments to prices
received from the pricing services. As of December 31, 2008, all of Credcos
investment securities are classified in Level 2 of the fair value hierarchy.
See further discussion in Note 4 to Credcos Consolidated Financial Statements.

In the measurement of fair value for Credcos investment
securities, even though the underlying
inputs used in the pricing models are directly observable from active markets
or recent trades of similar securities in inactive markets, the pricing models
do entail a certain amount of subjectivity and therefore differing judgments in
how the underlying inputs are modeled could result in different estimates of
fair value.

Other-Than-Temporary Impairment

Credco reviews and evaluates its investment securities, at least
quarterly, and more often as market conditions may require, to identify
investment securities that have indications of other-than-temporary
impairments. The determination of other-than-temporary impairment is a
subjective process, requiring the use of judgments and assumptions.
Accordingly, Credco considers several metrics when evaluating investment
securities for an other-than-temporary impairment, including the extent to
which amortized cost exceeds fair value, the duration and size of that
difference, and the issuers credit rating. Key factors considered when
assessing other-than-temporary impairment include the determination of the
extent to which the difference is due to increased default risk for the
specific issuers, or market interest

23

---



rate risk. With respect to market interest rate risk, including
benchmark interest rates and credit spreads, Credcos intent and ability to
hold the investment securities for a time sufficient to recover the unrealized
losses is a significant consideration in the other-than-temporary evaluation
process. See further discussion in Note 4 to Credcos Consolidated Financial
Statements.

In determining whether any of Credcos investment securities are
other-than-temporarily impaired, a change in facts and circumstances could lead
to a change in management judgment around Credcos view on collectibility and
credit quality of the issuer, or Credcos ability and intent to hold the
investment securities for a time sufficient to recover the unrealized losses.
This could result in Credco recording an other-than-temporary impairment loss
through earnings with a corresponding offset to accumulated other comprehensive
(loss) income. As of December 31, 2008, Credco had no gross unrealized losses
in its investment securities portfolio, that were deemed not to be
other-than-temporarily impaired.

Derivative Instruments

Credcos primary derivative
instruments include interest rate swaps, forward agreements, foreign currency
options and cross-currency swaps. Derivative instruments are reported in other
assets and other liabilities on Credcos Consolidated Balance Sheets. Changes
in fair value are recorded in accumulated other comprehensive (loss) income,
and/or in the Consolidated Statements of Income, depending on (i) the
documentation and designation of the derivative instrument, and (ii) if the
derivative instrument is in a hedging relationship, its effectiveness in
offsetting the changes in the designated risk being hedged.

The fair values of Credcos derivative instruments are estimated by
using pricing models that 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 valuation
models used by Credco 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, and volatility. In
certain instances credit valuation adjustments are necessary when the market
parameters (for example, a benchmark curve) used to value the derivative
instruments 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. As of December 31,
2008, the credit and nonperformance risks associated with Credco derivative
counterparties were not significant.

Credco manages derivative instrument counterparty credit 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 twelve months, considering such factors as the
volatility of the underlying or reference index. To mitigate derivative
instrument 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 Enterprise-wide Risk Management Committee guidelines and
procedures and determines the risk mitigation actions, when necessary. Credcos
derivative instruments are classified in Level 2 of the fair value hierarchy.
See further discussion in Note 8 to Credcos Consolidated Financial Statements.

In the measurement of fair value for Credcos derivative
instruments, although the underlying inputs
used in the pricing models are readily observable from actively quoted markets,
the pricing models do entail a certain amount of subjectivity and therefore
differing judgments in how the underlying inputs are modeled could result in
different estimates of fair value. In addition, although counterparty credit
risk is actively managed by the IRMC, and any necessary credit valuation
adjustments are based on observable default rates, a change in facts and
circumstances could lead to a change in management judgment about counterparty
credit quality, which could result in Credco recognizing an additional
counterparty credit valuation adjustment. As of December 31, 2008, the credit and
nonperformance risks associated with Credcos derivative instrument
counterparties were not significant.

24

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Income Taxes

The taxable
income of Credco is included in the consolidated United States federal income
tax return of American Express. Under an agreement with TRS, taxes are
recognized on a separate company basis. American Express is subject to the
income tax laws of the United States, its states and municipalities and those
of the foreign jurisdictions in which American Express operates. These tax laws
are complex, and the manner in which they apply to the taxpayers facts is
sometimes open to interpretation. In establishing a provision for income tax
expense, management must make judgments about the application of these
inherently complex tax laws.

Credco
establishes a liability for unrecognized tax benefits, which are the
differences between a tax position taken or expected to be taken in a tax
return and the benefit recognized in the financial statements. In establishing
a liability for an unrecognized tax benefit, assumptions may be made in
determining whether a tax position is more likely than not to be sustained upon
examination by the taxing authority and also in determining the ultimate amount
that is likely to be realized. A tax position is recognized when, based on
managements judgment regarding the application of income tax laws, it is more
likely than not that the tax position will be sustained upon examination. The
amount of tax benefit recognized is based on managements assessment of the
most likely outcome on ultimate settlement with the taxing authority. This
measurement is based on many factors, including whether a tax dispute may be
settled through negotiation with the taxing authority or is only subject to
review in the courts. As new information becomes available, management
evaluates its tax positions, and adjusts its unrecognized tax benefits, as
appropriate.

If the tax
benefit ultimately realized differs from the amount previously recognized in
the income tax provision, Credco recognizes an adjustment of the unrecognized
tax benefit through the income tax provision.

Deferred tax
assets and liabilities are determined based on the differences between the GAAP
financial statement and tax bases of assets and liabilities using the enacted
tax rates expected to be in effect for the years in which the differences are
expected to reverse. A valuation allowance is established when management
determines that it is more likely than not that all or some portion of the
benefit of the deferred tax asset will not be realized.

Since deferred
taxes measure the future tax effects of items recognized in the financial
statements, certain estimates and assumptions are required to determine whether
it is more likely than not that all or some portion of the benefit of a
deferred tax asset will not be realized. In making this assessment, management
analyzes and estimates the impact of future taxable income, reversing temporary
differences and available tax planning strategies. These assessments are
performed quarterly, taking into account any new information.

Should a
change in facts or circumstances lead to a change in judgment about the
ultimate realizability of a deferred tax asset, Credco records or adjusts the
related valuation allowance in the period that the change in facts or
circumstances occurs, along with a corresponding increase or decrease to the
income tax provision.

Impact of Credit and Capital Market
Environment

Credit Markets  U.S. Cardmember Receivables

During 2008, deteriorating home prices, rising unemployment and broad
tightening of consumer credit adversely affected U.S. credit card issuers
generally, including American Express issuers that sell receivables to Credco.

In managing
risk on behalf of Credco, TRS objective is to protect its profitability, but
also protect, to the extent it can, TRS ongoing relationship with the
cardmembers and their experience. With this in mind, the following actions have
been taken by TRS across the U.S. cardmember portfolios:

25

---



|  |                                                                            
|- | ---------------------------------------------------------------------------
| | incorporating
 more sophisticated information in TRSs risk evaluations;   
|  |                                                                            
| | focusing on
 areas of high risk, and canceling certain accounts;           
|  |                                                                            
| | reducing
 some customer lines of credit;                                   
|  |                                                                            
| | increasing
 the number of customer care professionals; and                 
|  |                                                                            
| | assisting
 cardmembers who are experiencing temporary financial difficulty.

American
Express view is that economic conditions will deteriorate further in 2009. The
impact to Credco is that its purchases of receivables and loans will decline
because of reduced cardmember spending. This is in addition to the expected
reduction in purchases as a result of the amendment to the Receivables
Agreements in October 2008 discussed previously.

Capital Markets

The global
money and capital markets have been experiencing periods of liquidity
disruption and rate volatility since the third quarter of 2007. Liquidity,
benchmark interest rates, and credit concerns were further exacerbated during
September 2008, fueled by heightened concerns about the global financial system
after the collapse of several large financial institutions in the United States
and elsewhere.

Credcos
funding strategy includes the issuance of debt with a wide
range of maturities to spread out or ladder the refinancing requirements in
future periods. This includes both unsecured term debt and commercial paper. Since
September 2008, the market for Credcos unsecured term debt, like that for
virtually all financial institutions, has been effectively frozen.

Certain
programs sponsored by the federal government and certain of its departments and
agencies launched or announced by the United States and other governments
during the fourth quarter of 2008 provided some stability to the capital
markets and reduced dislocations in benchmark indices such as LIBOR. However,
if the unprecedented levels of volatility and disruptions reemerge or worsen,
they could negatively impact Credcos funding capabilities, liquidity position,
and investment portfolios or derivative positions.

Investment
Portfolio

Credcos
investment portfolio primarily supports its contingent liquidity strategy, by
investing in U.S. Government and agencies obligations. Credcos objective is to
manage the type and mix of assets as well as their maturity profile in order to
ensure the cash and liquidity needs can be met without relying on the sale of
investments prior to maturity. As a result, Credco generally holds its
investments until their maturity. Credco nonetheless seeks to invest in
portfolios of securities with sufficient liquidity that could be accessed prior
to maturity should changes in cash needs occur.

All of
Credcos investments are classified as available-for-sale. Credco reviews its
investments at least quarterly and more often as market conditions may require
to evaluate their fair values and to identify investments that have indications
of other-than-temporary impairments. The determination of other-than-temporary
impairments for available-for-sale securities is a subjective process,
requiring the use of various assumptions and application of judgment.

Government Sponsored Enterprises

At December
31, 2008, Credco owned approximately $2.7 billion of senior unsecured
debentures issued by Government Sponsored Enterprises (GSEs): Fannie Mae and
Freddie Mac. On September 7, 2008, the Federal Housing Finance Agency (FHFA)
announced the decision to place Fannie Mae and Freddie Mac into a
conservatorship run by FHFA. These actions were designed to protect the senior
and subordinated debt and the mortgage-backed securities of the GSEs. The total
net unrealized gains on these securities were approximately $37 million at
December 31, 2008.

26

---



Money Market Fund

Credco owned a
$500 million investment in the Reserve Primary Fund (the Fund), a money market
fund. The net asset value of the Fund fell below $1 per share in September
2008. Credco recorded a loss of $15 million related to its investment in the
Fund in September 2008. Credco received approximately $390 million from the
Fund since it filed a redemption order with Reserve, the Fund sponsor, in
September 2008. The remaining amount due from the Fund is recorded in deferred
charges and other assets on Credcos Consolidated Balance Sheets. On February
20, 2009, Credco received $33 million from the Fund. The timing of receipt of
the remaining proceeds cannot be determined at this time.

With the
exception of its exposure to the Fund, Credco did not experience any defaults
or events of default, or determine it would not receive timely contractual
payments of interest and repayment of principal on any of its holdings in its
investment portfolios.

Consolidated 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 meet its obligations for at least
a 12 month period should some or all of its funding sources become
inaccessible.

Funding Strategy

Credco seeks
to maintain broad and well-diversified funding sources to allow it to meet its
maturing obligations and cost-effectively finance current and future asset
growth as well as to maintain a strong liquidity profile. 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 in
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.

The recent
turmoil in the money and capital markets
during 2008 resulted in changes to the mix and cost of financing Credco
obtained from its traditional funding sources.

Credco has
historically relied on the debt capital markets to satisfy a substantial amount
of its funding needs, as do many financial services companies. Notwithstanding
the difficult conditions in the financial markets during the past year, Credco
accessed a variety of capital markets sources during the first three quarters
of the year. Credcos issuances of debt securities, similar to most issuances
across the capital markets, included spreads above benchmark rates that were
significantly greater than those on similar issuances during the prior several
years.

Credcos
strategy is to issue debt with a wide range of maturities to reduce and spread
out the refinancing requirements in future periods. However, Credcos ability
to obtain financing in the debt capital market for unsecured term debt is
subject to a renewal of investor demand. Credco continues to assess its needs
and investor demand, which will likely change the mix of its existing sources
as well as seek to add new sources to its funding mix. Credcos funding plan is
subject to various risks and uncertainties, such as disruption of financial
markets, market capacity and demand for securities offered by Credco and
regulatory changes. Many of these risks and uncertainties are beyond Credcos
control.

Credcos
funding strategy is designed to maintain high and stable debt ratings from the
major credit rating agencies, Moodys Investor Services (Moodys), Standard
& Poors (S&P), Fitch Ratings, and Dominion Bond Rating Service (DBRS).
Recently, three of the four credit rating agencies that rate Credco provided
updates on Credcos ratings as follows:

27

---



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | § | During the
 fourth quarter of 2008, Moodys lowered the senior long-term debt ratings of
 Credco from Aa3 to A1 and revised its outlook of Credco from stable to
 negative. This change, which brings the ratings for Credcos funding to the
 same level as other rating agencies, reflected concerns regarding weakness in
 the broader economy and specific concerns regarding negative asset quality
 trends and lending exposures. Moodys affirmed all of its short-term ratings
 (P-1). On February 25, 2009, Moodys placed Credco long-term ratings on
 review for possible downgrade. The P-1 short-term rating was affirmed.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | § | During the
 fourth quarter of 2008, S&P lowered the long-term ratings on Credco from
 A+ to A. The outlook on the rating was negative. S&P affirmed its
 short-term ratings (A-1). On March 19, 2009, S&P placed both
 its long- and short-term ratings on Credco on CreditWatch with negative
 implications.                                                                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | § | On January 29, 2009, DBRS announced that it had revised its outlook
 on the long-term senior ratings of Credco (A (high)) from stable to negative.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Maintenance of
high and stable debt ratings is critical to ensuring Credco has continuous
access to capital and credit markets at cost-effective rates. Historically,
credit ratings have had a significant impact on the borrowing capacity and
costs of Credco. A downgrade in Credcos long-term debt rating would result in
higher interest expense on Credcos unsecured debt, as well as higher fees
related to borrowings under its unused lines of credit. A downgrade of one
level in Credcos short-term rating would result in Credco having to
significantly reduce or eliminate its outstanding commercial paper compared to
historical levels. In the event a reduction in its borrowing capacity in the
short-term debt markets were to occur, Credco would further shift its funding
to other funding programs, such as issuance of long-term debt, to the extent
these markets are available.

Short-term funding programs

Credcos
short-term funding requirements have historically been met primarily by the
sale of commercial paper. Credcos commercial paper is a widely recognized name
in the money markets and is supported by a diverse base among short-term investors.
Credco has readily sold the volume of commercial paper necessary to meet its
funding needs as well as to cover the daily maturities of commercial paper
issued. During 2008, Credco had continuous access to the commercial paper
markets to fund its business operations. Its commercial paper issuances after
mid-September occurred at shorter weighted average maturities than Credcos
historical trend, consistent with the changes in issuance maturities occurring
across the overall commercial paper market, as reported by the Federal Reserve.

The shortening
of the maturities in the commercial paper markets makes it more difficult for
Credco to manage its day-to-day cash flow. Since year-end, Credco has reduced
its reliance on the commercial paper market.

On October 7, 2008, the Federal Reserve Board
established the Commercial Paper Funding Facility (CPFF). The CPFF
provides three-month liquidity to U.S. issuers of commercial paper through a
special purpose vehicle (SPV), which purchases three month unsecured and
asset-backed commercial paper directly from eligible issuers using financing
provided by the Federal Reserve Bank of New York. The commercial paper must be
rated at least A1/P1/F1 by a major nationally recognized statistical rating
organization (NRSRO) and, if rated by multiple major NRSROs, must be rated at
least A1/P1/F1/R1 (middle) by two or more NRSROs. Credco is eligible to have up
to $14.7 billion of commercial paper outstanding with the SPV at any one time.
The SPV is currently scheduled to cease purchasing commercial paper on October
30, 2009, unless the Board extends the facility. At December 31, 2008, Credco
had $7.3 billion of commercial paper outstanding, including $4.5 billion under
the CPFF. As of March 30, 2009, there was no commercial paper outstanding under
the CPFF.

28

---



The table
below illustrates Credcos commercial paper outstanding and back-up liquidity
coverage at December 31:

|                                                            |  |      |      |      |   |      |  
|----------------------------------------------------------- |  | ---- | ---- | ---- | - | ---- | -
|(Billions,
 except percentages)                             |  | 2008 |      | 2007 |  
|                                                            |  |      |      |      |  
|                                                            |  |      |      |      |  
|Commercial
 paper outstanding                               |  | $    | 7.3  |      | $ | 10.5 |  
|Year to date
 average commercial paper outstanding(a)       |  | $    | 10.8 |      | $ | 7.8  |  
|Net (cash)
 short-term debt outstanding(b)                  |  | $    | (1.5 | )    | $ | 7.9  |  
|Total
 back-up liquidity coverage of net short-term debt(c) |  |      | 723  | %    |   | 140  | %
|                                                            |  |      |      |      |   |      |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Average commercial paper
 outstanding includes amounts issued through the CPFF program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(b) | Credco currently manages
 the level of short-term debt outstanding, exclusive of short-term debt to
 affiliates, such that its total back-up liquidity, including maximum available
 bank credit facilities and term liquidity portfolio investment securities, is
 not less than 100 percent of net short-term debt. Net short-term debt consists of commercial paper and certain other
 short-term borrowings less cash and cash equivalents. Credcos total back-up
 liquidity coverage of net short-term borrowings was in excess of 100 percent
 at December 31, 2008 and 2007.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(c) | Based on the maximum
 available borrowings under committed third party bank credit facilities and
 term liquidity portfolio investment securities.                                                                                                                                                                                                                                                                                                                                                                                                                                  

Long-term debt programs

Long-term debt
is raised through the offering of debt securities in the United States and
international capital markets. 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 at December 31:

|                            |  |      |      |      |   |      | 
|--------------------------- |  | ---- | ---- | ---- | - | ---- | 
|(Billions)                  |  | 2008 |      | 2007 |  
|                            |  |      |      |      |  
|                            |  |      |      |      |  
|Long-term
 debt outstanding |  | $    | 20.0 |      | $ | 22.3 | 
|Average
 long-term debt     |  | $    | 21.2 |      | $ | 22.7 | 
|                            |  |      |      |      |   |      | 

See further
details on total year-end stated rates on debt and maturities in Note 6 to the
Consolidated Financial Statements.

Credco
regularly seeks to expand the capacity and diversity of its funding sources. In
August 2008, Credco commenced an InterNotes® program that offers retail
investors the opportunity to make unsecured medium- and long-term fixed income
investments in Credco. Credco raised over $408 million of funding under this
program through December 31, 2008.

Credco also
has the ability to issue debt securities under shelf registrations filed with
the SEC. The shelf registration statement filed with the SEC is for an
unspecified amount of debt securities to be issued from time to time. During
2008, Credco issued $5.8 billion of fixed and floating rate long-term debt
securities with maturities ranging from two to seven years, from its U.S. shelf
registration. At December 31, 2008, Credco had $13.0 billion of debt securities
outstanding, issued under the SEC registration statements.

Credco, in
conjunction with certain subsidiaries of American Express, has established a
program for the issuance, outside the United States, of debt instruments to be
listed on the Luxembourg Stock Exchange. During 2008, this program was renewed
and the maximum aggregate principal amount of debt instruments outstanding at
any one time under the program was increased to $50.0 billion. The proceeds of
these issuances are used for financing operations, including the purchase of
receivables and the repayment of previously issued debt. At December 31, 2008,
$3.7 billion was outstanding under this program, of which $2.4 billion was
issued by Credco.

29

---



Credco
established a program in Australia for the issuance of debt securities from
time to time of up to approximately $4.2 billion. During 2008, no notes were
issued under this program. At December 31, 2008, approximately $3.5 billion was
available for issuance under this program.

During the
first quarter of 2008, a new shelf prospectus was filed and became effective in
Canada for a medium-term note program providing for the issuance from time to
time, in Canada, of up to approximately $2.9 billion of notes by American
Express Canada Credit Corporation (Cancredco), an indirect wholly owned
subsidiary of Credco. All notes issued under this shelf registration will be
guaranteed by Credco. During 2008, Cancredco issued approximately $411 million
of medium-term notes. The financial results of Cancredco are included in the
consolidated financial results of Credco.

The most
restrictive limitation on dividends imposed by the debt instruments issued by
Credco is the requirement that Credco maintain a minimum consolidated net worth
of $50 million. There are no significant 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.

Credco paid
cash dividends of $580 million and $750 million to TRS in 2008 and 2007,
respectively. On February 10, 2009, Credco paid a cash dividend of $75 million
to TRS.

Liquidity Strategy

Credco seeks
to ensure that it has adequate liquidity in the form of cash and
readily-marketable securities easily convertible into cash, as well as access
to cash and equivalents, to continuously meet its business needs, sustain
operations and satisfy its obligations for a period of at least 12 months
without access to the unsecured debt capital markets. This objective is managed
by regularly accessing capital through a broad and diverse set of funding
programs, by maintaining cash and readily-marketable securities, as well as
through a variety of contingent sources of cash and financing. Credco maintains
a liquidity plan that enables it to continuously meet its daily obligations
when its access to financing becomes impaired or markets become inaccessible.
The plan contemplates a hypothetical 12-month liquidity crisis occurring as a
sudden and unexpected event that makes financing from its various funding
sources unavailable.

The sources of
cash in such stress environment include, but are not limited to, Credcos cash
and readily-marketable securities, securitizations of cardmember receivables
through RFC V and AEIT, loans through American Express affiliates, and bank
credit facilities. Credco has identified over $35 billion in alternate sources
of cash from these sources.

As a result of
Credcos funding activities during 2008, Credco raised funds that substantially
exceeded its 2008 funding needs. The excess was invested with the purpose of
increasing the amount of cash and readily-marketable securities Credco holds.

The amount of
cash and readily-marketable securities Credco expects to maintain will be
substantially greater than its historical levels of holdings. Credco expects to
incur higher net interest cost on these amounts, which will be dependent on the
amount Credco actually maintains, as well as the difference between its cost of
funding these amounts and their investment yields.

Cash and Readily-Marketable Securities

At December 31, 2008, Credco
had cash and cash equivalents of approximately $8.9 billion as well as $3.1
billion of longer-term readily-marketable securities. These investments are of
high credit quality, highly liquid short-term instruments and longer term,
highly liquid instruments, such as U.S. Treasury securities,
government-sponsored enterprise debt, or government-guaranteed debt. These
instruments are managed to either mature prior to the maturity of borrowings
that will occur within the next 12 months, or are sufficiently liquid that
Credco can sell them or enter into sale/repurchase agreements to immediately
raise cash proceeds

30

---



to meet liquidity
needs.

Committed Bank Credit Facilities

Credco maintained committed bank credit
facilities at December 31, 2008 as follows:

|             |  |       |      |                    |   |        |  |   |     |    
|------------ |  | ----- | ---- | ------------------ | - | ------ |  | - | --- | ---
|             |  |       |      |                    |   |        | 
|(Billions)   |  | Total |      | American 
 Express |   | Credco | 
|             |  |       |      |                    |   |        | 
|Committed(a) |  | $     | 10.4 |                    | $ | 1.3    |  | $ | 9.1 | (b)
|Outstanding  |  | $     | 2.5  |                    |   |       |  | $ | 2.5 |    
|             |  |       |      |                    |   |        |  |   |     |    

|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Committed lines supported
 by 34 financial institutions.                                                                                                          
|    |                                                                                                                                                                   
|(b) | Credco has the right to
 borrow a maximum amount of $10.4 billion with a commensurate maximum $1.3
 billion reduction in the amount available to American Express.

Credcos
committed bank credit facilities expire as follows:

|           |  |   |      | 
|---------- |  | - | ---- | 
|           |  |   |      | 
|(Billions) |  |   |      | 
|           |  |   |      | 
|2010       |  | $ | 1.9  | 
|2011       |  |   | 2.6  | 
|2012       |  |   | 5.9  | 
|           |  |   |      | 
|Total      |  | $ | 10.4 | 
|           |  |   |      | 

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 combined
earnings and fixed charges to fixed charges. The ratio of earnings to fixed
charges for Credco and American Express was as follows:

|     |  |        |      |                  |     |      | 
|---- |  | ------ | ---- | ---------------- | --- | ---- | 
|     |  | Credco |      | American Express | (b)
|     |  |        |      |                  |    
|    
|2008 |  |        | 1.62 | (a)              |     | 1.96 | 
|2007 |  |        | 1.38 | (a)              |     | 2.24 | 
|2006 |  |        | 1.44 |                  |     | 2.54 | 

(a) The ratio of earnings to fixed charges
for Credco has been restated for the effect of the correction of the errors in accounting
as discussed in Explanatory Note.

(b) The ratio of earnings to fixed charges
for American Express have not been restated. The impact of the incorrect
accounting was not material to American Express in any of the quarterly or
annual periods in which it occurred.

Committed bank
credit facilities do not contain material adverse change clauses, which may
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 the funding sources, Credco believes that it
would have the liquidity to satisfy all maturing obligations and fund normal
business operations 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.

Results of Operations

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

31

---



Credcos
consolidated net income rose 19 percent to $864 million for the year ended
December 31, 2008, as compared to the year ended December 31, 2007. The
year-over-year increase was primarily due to a decrease in interest expense,
provisions for losses, net of recoveries and loan service fees and an increase
in interest income earned on loans to affiliates, partially offset by a
decrease in discount revenue earned from purchased cardmember receivables and
loans, and a decrease in interest income from investments. A portion of the increase
    in net income was also due to the year-over-year increase in other revenues
    for the reasons described below.

The following
table summarizes the changes attributable to the increase (decrease) in key
revenue and expense accounts:

|                                                                        |  |      |      |      |   |     | 
|----------------------------------------------------------------------- |  | ---- | ---- | ---- | - | --- | 
|(Millions)                                                              |  | 2008 |      | 2007 |  
|                                                                        |  |      |      |      |  
|Discount revenue earned on purchased
 cardmember receivables and loans: |  |      |      |      |   |     | 
|Volume of receivables and loans purchased                               |  | $    | (516 | )    | $ | 78  | 
|Discount rates                                                          |  |      | (166 | )    |   | 572 | 
|                                                                        |  |      |      |      |   |     | 
|Total                                                                   |  | $    | (682 | )    | $ | 650 | 
|                                                                        |  |      |      |      |   |     | 
|Interest income from affiliates:                                        |  |      |      |      |   |     | 
|Average loans to affiliates                                             |  | $    | 113  |      | $ | 73  | 
|Interest rates                                                          |  |      | (19  | )    |   | 54  | 
|                                                                        |  |      |      |      |   |     | 
|Total                                                                   |  | $    | 94   |      | $ | 127 | 
|                                                                        |  |      |      |      |   |     | 
|Interest income from investments:                                       |  |      |      |      |   |     | 
|Average investments outstanding                                         |  | $    | 151  |      | $ | 22  | 
|Interest rates                                                          |  |      | (182 | )    |   | 38  | 
|                                                                        |  |      |      |      |   |     | 
|Total                                                                   |  | $    | (31  | )    | $ | 60  | 
|                                                                        |  |      |      |      |   |     | 
|Provisions for losses, net of recoveries:                               |  |      |      |      |   |     | 
|Volume of receivables purchased                                         |  | $    | (183 | )    | $ | 36  | 
|Provisions rates and volume of recoveries                               |  |      | (18  | )    |   | 217 | 
|                                                                        |  |      |      |      |   |     | 
|Total                                                                   |  | $    | (201 | )    | $ | 253 | 
|                                                                        |  |      |      |      |   |     | 
|Interest expense:                                                       |  |      |      |      |   |     | 
|Average debt outstanding                                                |  | $    | 75   |      | $ | 165 | 
|Interest rates                                                          |  |      | (324 | )    |   | 165 | 
|                                                                        |  |      |      |      |   |     | 
|Total                                                                   |  | $    | (249 | )    | $ | 330 | 
|                                                                        |  |      |      |      |   |     | 
|Interest expense to affiliates:                                         |  |      |      |      |   |     | 
|Average debt outstanding                                                |  | $    | 34   |      | $ | 24  | 
|Interest rates                                                          |  |      | (213 | )    |   | 77  | 
|                                                                        |  |      |      |      |   |     | 
|Total                                                                   |  | $    | (179 | )    | $ | 101 | 
|                                                                        |  |      |      |      |   |     | 

Discount Revenue Earned on Purchased
Cardmember Receivables and Loans

Discount
revenue decreased 24 percent or $682 million to $2.2 billion for 2008, as
compared to 2007, due to a decrease in both the volume of receivables purchased
and discount rates. Volume of receivables and loans purchased for 2008, was 18
percent lower than 2007, primarily due to the amendment of the Receivables
Agreements between each of Credco and Centurion Bank and FSB; purchased volume
does not include those cardmember receivables transferred with recourse to
Credco and cardmember receivables and loans funded by loans to affiliates.
Discount rates, which vary over time due to changes in market interest rates or
changes in the collectibility of cardmember receivables, decreased an average
of approximately 7 basis points compared to the year ended December 31, 2007.

32

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Interest Income from Affiliates

Interest
income from affiliates increased 14 percent or $94 million to $744 million in
2008, as compared to 2007. The year-over-year increase is due to an increase in
the volume of loans to affiliates, partially offset by a decrease in the
interest rates charged to affiliates. The average volume of loans to affiliates
increased partially due to loans to both Centurion Bank and FSB, as a
consequence of amending the Receivables Agreements. The average interest rate
charged to affiliates during 2008, was 16 basis points lower than the average
interest rate charged to affiliates in 2007.

Interest Income from Investments

Interest
income from investments decreased 11 percent or $31 million to $247 million for
2008, as compared to 2007. The year-over-year decrease is due to an increase in
the average outstanding amount of cash and cash equivalents offset by the
decrease of the average interest rate on the total investment portfolio of
approximately 211 basis points for 2008, as compared to 2007. The increase in
cash and cash equivalents reflects the issuance
of short- and long-term debt that was in excess of Credcos business operating
needs, and investment of the excess proceeds in cash equivalents.

Other Revenues

Other revenues
increased from $16 million for the year ended 2007 to $203 million for the year
ended 2008, from $5 million for the nine months ended September 2007 to $40
million for the same period in 2008, from $5 million for the six months ended
June 2007 to $10 million for the same period in 2008, with all variations
primarily as a result of the change in value of foreign exchange forward
contracts. Other revenues for the three months ended March 31, 2007 were $4 million
as compared to nil for the same period in 2008.

Provisions for Losses, Net of Recoveries

The provisions
for losses, net of recoveries decreased 24 percent or $201 million to $641
million for 2008, as compared to 2007. The year-over-year decrease primarily
reflects the reduction in the volume of receivables purchased partially offset
by higher write-off and delinquency rates compared to 2007, reflecting a more
difficult U.S. credit environment.

Interest Expense and Interest Expense to
Affiliates

Interest
expense and interest expense to affiliates decreased 15 percent and 41 percent,
respectively, for 2008 compared to 2007, due to lower interest rates partially
offset by higher average debt outstanding. The average interest rate on debt
outstanding during 2008, was 101 basis points lower than 2007. The average rate
due to affiliates during 2008, was 241 basis points lower than 2007.

Service Fees to Affiliates

Credco pays
fees to affiliates for the related servicing of the receivables purchased.
Service fees to affiliates decreased 10 percent or $19 million to $173 million
for 2008, as compared to 2007, due to a decrease in servicing provided under
service level agreements with affiliates, in particular with Centurion Bank and
FSB.

Income Taxes

Credcos effective tax rate for
the years ended December 31, 2008, 2007 and 2006, was 13.3 percent, 7.6 percent
and 13.2 percent, respectively. The effective tax rate was higher in 2008 as
compared to 2007 primarily due to the attribution and change in the geographic
mix of pretax income among various

33

---



jurisdictions.
The effective tax rate was lower in 2007 as compared to 2006 primarily as a
result of an increase in the benefits related to its ongoing funding activities
outside the United States.

34

---



|         |                                                            
|-------- | -----------------------------------------------------------
|Item 7A. | QUANTITATIVE AND QUALITATIVE
 DISCLOSURES ABOUT MARKET RISK

Credcos risk management
objective is to monitor and control risk exposures to earn returns commensurate
with the appropriate level of risk assumed. In addition to business risk, Credco
recognizes four fundamental sources of risk: credit risk, market risk,
liquidity risk and operational risk. These risks, which are described below,
are interrelated, and management has adopted well defined risk-taking
principles to guide Credcos business strategies and objectives. Credco views
credit risk as a component of driving profitable growth. Market risk is hedged
or managed within established parameters to sustain such earnings growth.
Liquidity risk is managed through the diversification of funding sources, while
operational risk arising from Credcos business activities is carefully
monitored to maintain it within acceptable limits.

Credcos risk management
oversight is performed through internal and independent oversight functions.
Risk management governance at Credco begins with the American Express Board
approved risk management policies and objectives and the American Express Board
oversight of risk management parameters. Supporting the American Express Board
in its oversight function are other risk management oversight committees, such
as American Express Treasury Department and other asset and liability
management committees. The American Express Enterprise Risk Management
Committee (ERMC) supplements the risk management capabilities resident within
American Express business segments by routinely reviewing key market, credit,
operational and other risk concentrations across American Express and
recommending action where appropriate. The ERMC recommends risk limits,
promotes an understanding of risks across American Express, including Credco,
and supports management in making risk-return decisions.

Credit Risk Management Process

TRS manages the overall credit risk exposure
associated with the cardmember receivables and loans purchased by Credco. Credit risk is defined as the risk of loss
from an obligor or counterparty default. Credco is exposed to credit risk
through the cardmember receivables and cardmember loans it purchases generally
without recourse, as well as through its participation interests. Since such a
portfolio consists of millions of borrowers and individual exposures across
multiple geographies, occupations, and social segments, its risk is
substantially reduced through diversification. A loss distribution is
characterized by a higher frequency but manageable severity that is more
closely linked to general economic and legal conditions than by
borrower-specific events. Receivable and loan purchase decisions and the
related discount pricing are impacted by the overall credit risk considerations
inherent in the cardmember receivables and cardmember loans.

Credit risk associated with
Credcos derivatives is limited to the risk that a derivative counterparty will
not perform in accordance with the terms of the contract. To mitigate such
risk, Credcos counterparties are all required to be rated as investment grade.
Additionally, Credco enters into master netting agreements with its
counterparties wherever practical.

Market Risk Management Process

Market risk is the risk to
earnings or value resulting from movements in market prices. Credcos market
risk consists primarily of interest rate risk and foreign exchange risk. Market
risk exposures are monitored and managed by various risk committees, American
Express Treasury Department as well as by Credcos management. Credco operates
under American Express Board approved policies related to market risk
management and the use of derivative financial instruments. With respect to
derivative financial instruments, the value of such instruments is derived from
an underlying variable or multiple variables, including interest rate, foreign
exchange, and equity indices or prices. 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 and related asset liability
management strategy and processes. See Note 8 to the Consolidated Financial
Statements for additional discussion of Credcos derivative financial
instruments.

35

---



Interest rate risk is primarily generated by the funding of cardmember
receivables and fixed-rate cardmember loan purchases with variable rate
borrowings. These assets and liabilities generally do not create naturally
offsetting positions with respect to basis, re-pricing or maturity
characteristics. By using derivative financial instruments, such as interest
rate swaps, the interest rate profile can be adjusted to maintain and manage a
desired profile. At both December 31, 2008 and 2007, the total notional amount
of interest rate swaps was approximately $8 billion. These derivatives
generally qualify for hedge accounting. A portion of these derivatives
outstanding as of December 31, 2008 extend to 2015.

In addition, foreign exchange risk is generated by
cross-currency purchased cardmember receivables and cardmember loans, foreign
currency denominated balance sheet exposures and foreign currency earnings in
international units. Credco hedges this market exposure to the extent it is
economically justified through various means including local market
cross-currency funding and the use of derivative financial instruments, such as
foreign exchange forward and cross-currency swap contracts, which can help
lock in Credcos exposure to specific currencies. At both December 31, 2008
and 2007, the total notional amount of foreign exchange derivatives was
approximately $5 billion. These derivatives generally do not qualify for hedge
accounting, however, derivative hedging activities related to translation
exposure of foreign operations generally do.

The following discussion includes sensitivity analysis
of interest rate and foreign currency risk and estimates the effects of
hypothetical sudden and sustained changes in the applicable market conditions
on the ensuing years earnings, based on year-end positions. The market
changes, assumed to occur as of year-end, are a 100 basis point increase in
market interest rates and a 10 percent strengthening of the U.S. dollar versus
all other currencies.
Computations of the prospective effects of hypothetical interest rate and
foreign exchange rate changes are based on numerous assumptions, including
relative levels of market interest rates and foreign exchange rates, as well as
the levels of assets and liabilities. The hypothetical changes and assumptions
will be different from what actually occurs in the future. Furthermore, the
computations do not incorporate actions that management could take if the
hypothetical market changes actually occur, including revising the discount
rate applicable to purchases of new receivables. As a result, actual earnings
consequences will differ from those quantified. The detrimental effect on
Credcos pretax earnings of a hypothetical 100 basis point increase in interest
rates would be approximately $36million
based on the 2008 year-end positions. This effect, which is calculated using a
static asset/liability gapping model, is primarily a function of the extent of
variable rate funding of charge card and fixed rate lending products, to the
degree that interest rate exposure is not managed by derivative financial
instruments. From a foreign exchange risk perspective, based on the years ended
2008 and 2007 foreign exchange positions, the effect on Credcos earnings of
the hypothetical 10 percent strengthening of the U.S. dollar would be
approximately $47 million and $63 million, respectively.

Liquidity
Risk Management Process

Liquidity risk is defined as the inability to access
cash and equivalents needed to meet business requirements and satisfy Credcos
obligations. Credco balances the trade-offs between maintaining too much
liquidity, which can be costly and limit financial flexibility, with having
inadequate liquidity, which may result in financial distress during a liquidity
event. Liquidity risk is centrally managed by the Funding and Liquidity
Committee of American Express, chaired by American Express Corporate
Treasurer. American Express has developed a liquidity plan that enables it to
meet its daily cash obligations when access to unsecured funds in the debt
capital markets is impaired or unavailable. This plan is designed to ensure
that American Express and all of its main operating entities, including Credco,
could continuously maintain business operations for a 12-month period in which
its access to all capital markets financing is interrupted. The hypothetical
12-month liquidity crisis is assumed to occur as a sudden and unexpected event
that temporarily impairs access to or makes unavailable financing in the
unsecured debt markets.

Liquidity risk is managed both at an aggregate
American Express level and at the major legal entities,

36

---



including Credco, in order to ensure that sufficient
funding and contingent liquidity resources are available in the amount and in
the location needed in a stress event. American Express Funding and Liquidity
Committee manages the forecasts of American Express aggregate and subsidiary
cash positions and financing requirements, the funding plans designed to
satisfy those requirements under normal conditions, establishes guidelines to
identify the amount of contingent liquidity resources required, and monitors
positions and determines any actions to be taken. Liquidity planning also takes
into account operating cash flexibilities.

Operational
Risk Management Process

Managing operational risk is an important priority for
Credco. Credco defines operational risk as the risk of not achieving business
objectives due to inadequate or failed processes or information systems, human
error or the external environment (e.g., natural disasters), including losses
due to failures to comply with laws and regulations. Operational risk is
inherent in all business activities and can impact an organization through
direct or indirect financial loss, brand damage, customer dissatisfaction, or
legal or regulatory penalties. Current areas of significant focus include data
protection, vendor risk, financial reporting risk and both internal and
external fraud.

Credco is committed to
improving its ability to prioritize and manage operational risk through the
delivery of a comprehensive operational risk program. In order to appropriately
measure operational risk, American Express has developed a comprehensive
operational risk model. This model assesses (i) risk events, i.e. what occurred
or could have occurred; (ii) root causes, i.e. why did it occur or could have
occurred; and (iii) impact, i.e. how was Credco affected or might have been
affected. This model and other American Express initiatives have resulted in improved operational risk
intelligence and heightened level of preparedness to manage risk events and
conditions that may adversely impact American Express operations. However,
day-to-day management of operational risk lies with Credco. Credco continues to
enhance its operational risk management practices on an ongoing basis.

37

---



|        |                                             
|------- | --------------------------------------------
|Item 8. | FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA

| |    |                                                                                                            
| | -- | -----------------------------------------------------------------------------------------------------------
| | 1. | Financial Statements.                                                                                      
| |    |                                                                                                            
| |    | See Index to Financial
 Statements at page F-1 hereof.                                                     
| |    |                                                                                                            
| | 2. | Supplementary Financial
 Information.                                                                      
| |    |                                                                                                            
| |    | Selected quarterly
 financial data. See Note 15 to the Consolidated Financial Statements
 appearing herein.

|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                      
|------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 9.      | CHANGES
 IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Item
 9A(T). | CONTROLS
 AND PROCEDURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             | The following has been
 amended to reflect the restatement of Credcos consolidated financial
 statements as discussed further in Explanatory Note and in Note
 1 to the Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             | Credco maintains
 disclosure controls and procedures that are designed to ensure that
 information required to be disclosed in the reports filed or submitted under
 the Securities Exchange Act of 1934, as amended (Exchange Act), is
 recorded, processed, summarized, and reported within the time periods
 specified in the SECs rules and forms. Disclosure controls and procedures
 are designed to ensure that information required to be disclosed by Credco in
 its Exchange Act reports is accumulated and communicated to Credcos
 management including its principal executive and financial officers, as
 appropriate to allow timely decisions regarding required disclosure.
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             | 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 Exchange Act defined above) 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 Credcos disclosure controls
 and procedures were not effective as of December 31, 2008 due to the material
 weakness identified and described below.                                                                          
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             | Managements
 Report on Internal Control over Financial Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             | The management of Credco
 is responsible for establishing and maintaining adequate internal control
 over financial reporting. Credcos internal control over financial reporting
 is a process designed 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 in the United States of America, and includes those
 policies and procedures that:                                                                                                                                                                                   
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Pertain to the maintenance
 of records that, in reasonable detail, accurately and fairly reflect the
 transactions and dispositions of the assets of Credco;                                                                                                                                                                         
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                      
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Provide reasonable
 assurance that transactions are recorded as necessary to permit preparation
 of financial statements in accordance with generally accepted accounting
 principles, and that receipts and expenditures of Credco are being made only
 in accordance with authorizations of management and directors of Credco; and

38

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Provide reasonable
 assurance regarding prevention or timely detection of unauthorized
 acquisition, use or disposition of Credcos assets that could have a material
 effect on the financial statements.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                           
| | Because of its inherent
 limitations, internal control over financial reporting may not prevent or
 detect misstatements. Also, projections of any evaluation of effectiveness to
 future periods are subject to the risk that controls may become inadequate
 because of changes in conditions, or that the degree of compliance with the
 policies or procedures may deteriorate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Credcos management
 assessed the effectiveness of Credcos internal control over financial
 reporting as of December 31, 2008. In making this assessment, Credcos
 management used the criteria set forth by the Committee of Sponsoring
 Organizations of the Treadway Commission (COSO) in Internal Controls  Integrated
 Framework. Based on managements assessment and those criteria,
 management has concluded that, as of December 31, 2008, Credcos internal control
 over financial reporting was not effective because of the material weakness
 described below. Accordingly, management has restated its report on internal
 control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | A material weakness is a
 deficiency, or combination of deficiencies, in internal control such that
 there is a reasonable possibility that a material misstatement of the
 registrants annual or interim financial statements will not be prevented or
 detected on a timely basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | As described in Explanatory Note, Credco identified
     an error in its accounting for a net investment in a consolidated foreign
     subsidiary that stemmed from a funding structure executed in 2004. In the
     course of preparing the financial statements for the third quarter of 2009,
     an error was identified in the initial set up of this structure in Credcos
     subsidiary ledgers that caused an incorrect automated bookkeeping entry
     to be recorded beginning in the third quarter of 2007 when a portion of
     the funding for this net investment was refinanced. As a result of this
     incorrect automated  bookkeeping entry, (i) other revenues in Credcos
     Consolidated Statements of Income and (ii) accrued interest and other liabilities,
     retained earnings and the foreign currency translation adjustment account
     included in the accumulated other comprehensive income (loss) component
     of shareholders
 equity in Credcos Consolidated Balance Sheets were incorrect beginning
 in the third quarter of 2007. Following a review of its controls and processes,
 Credcos management has determined that it did not maintain effective controls
 over processes to accurately record or monitor certain of its net investments
 in consolidated foreign subsidiaries with similar funding structures. This
 deficiency resulted in restatements of the financial statements for the
 fiscal years ended December 31, 2008 and 2007, including each of the
 quarterly periods in fiscal year 2008 and the third and fourth quarters in
 fiscal year 2007, and for the first and second quarters in 2009. Accordingly,
 Credcos management concluded that this deficiency constitutes a material
 weakness.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Because Credco is not an
 accelerated filer under applicable SEC rules, this annual report does not
 include an attestation report of PricewaterhouseCoopers LLP, Credcos
 independent registered public accounting firm, regarding internal control
 over financial reporting. Managements report was not subject to attestation
 by Credcos independent registered public accounting firm pursuant to
 temporary rules of the Securities and Exchange Commission that permit Credco
 to provide only managements report in this annual report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Pursuant to Item 308T(a)
 of Regulation S-K, this Managements Report on Internal Control Over
 Financial Reporting shall not be deemed to be filed for purposes of Section
 18 of the Exchange Act or otherwise subject to the liabilities of that
 section.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Remediation Steps to
 Address Material Weakness in Internal Controls                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Credco has reviewed its
 processes and controls for recording and monitoring its net investment in
 foreign consolidated subsidiaries and has determined that the error was
 limited to a discrete number of similar transactions (specifically three
 funding structures related to its net investment in consolidated foreign
 subsidiaries). Credco has performed a detailed review of each of these net investment
 funding structures and has determined there have been no other errors in
 accounting. Credco has also enhanced its controls with respect to recording
 and monitoring funding structures related to its net investment in
 consolidated foreign                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

39

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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         | subsidiaries to prevent
 future errors in accounting from occurring. Based on the actions taken, Credco
 believes that, as of the date of this Form 10-K/A, the potential risk of a
 material misstatement related to the accounting for net investments in consolidated
 foreign subsidiaries for these three funding structures is remote. In
 addition, management is performing additional actions to remediate the
 material weakness including the continued evaluation of the effectiveness of
 its internal control over financial reporting on an ongoing basis, and will
 take further actions as appropriate.
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | To address the material
 weakness Credco performed additional analysis and other procedures in
 connection with the preparation of the financial statements included in this
 Form 10-K/A. Accordingly, management believes that the consolidated financial
 statements included herein fairly present, in all material respects, our
 financial condition, results of operations and cash flows for the periods
 presented.                                                                                                                                                                                            
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Changes
 in Internal Control over Financial Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | There were no changes to
 Credcos internal control over financial reporting that occurred during
 the fourth quarter ended December 31, 2008 that would have a material effect,
 or are reasonably likely to have a material effect, on Credcos internal
 control over financial reporting.                                                                                                                                                                                                                                                                                                                           
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 9B. | OTHER
 INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

40

---



PART III

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 10. | DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Omitted pursuant to
 General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Item 11. | EXECUTIVE
 COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Omitted pursuant to
 General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Item 12. | SECURITY
 OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
 MATTERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Omitted pursuant to
 General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Item 13. | CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Omitted pursuant to
 General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Item 14. | PRINCIPAL
 ACCOUNTING FEES AND SERVICES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | The Audit Committee of the
 Board of Directors of American Express Company has appointed
 PricewaterhouseCoopers LLP as the independent registered public accounting
 firm to audit the Consolidated Financial Statements of Credco for the year
 ended December 31, 2008.                                                                                                                                                                                                                                                                                                             
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Each year the Audit
 Committee reviews the accountants qualifications, performance and
 independence in accordance with regulatory requirements and guidelines. At
 least every ten years, the Audit Committee charter requires a detailed review
 of American Express accounting firm, which would include a comparison of
 resources available in other firms. The Committee conducted such a review in
 2004, resulting in the appointment of PricewaterhouseCoopers LLP as the
 independent registered public accounting firm for Credco for the year
 beginning January 1, 2005.
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Audit Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | The aggregate fees billed
 or to be billed by PricewaterhouseCoopers LLP for professional services
 rendered for the audit of Credcos Consolidated Financial Statements and
 services that were provided in connection with statutory and regulatory
 filings or engagements and other attest services were $300,913 and $263,500
 for the years ended December 31, 2008 and 2007, respectively.                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Audit-Related Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Credco was not billed by
 PricewaterhouseCoopers LLP for any fees for audit-related services for 2008
 or 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Tax Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         | Credco was not billed by PricewaterhouseCoopers LLP
 for any tax fees for 2008 or 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

41

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | All Other Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Credco was not billed by PricewaterhouseCoopers LLP
 for any other fees for 2008 or 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Policy on Pre-Approval of Services Provided by
 Independent Registered Public Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Pursuant to the requirements of the Sarbanes-Oxley
 Act of 2002, the terms of the engagement of Credcos independent registered
 public accounting firm is subject to the specific pre-approval of the Audit
 Committee of American Express. All audit and permitted non-audit services to
 be performed by Credcos independent registered public accounting firm
 require pre-approval by the Audit Committee in accordance with pre-approval
 procedures established by the Audit Committee. All such services provided by
 Credcos independent registered public accounting firm have been
 pre-approved. The procedures require all proposed engagements of Credcos
 independent registered public accounting firm for services to Credco of any
 kind to be directed to the General Auditor of American Express and then
 submitted for approval to the Audit Committee of American Express prior to
 the beginning of any services.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Other Transactions with PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | American Express has a number of business
 relationships with individual member firms of the worldwide
 PricewaterhouseCoopers LLP organization. American Express subsidiaries
 provide card and travel services to some of these firms and these firms pay
 fees to American Express subsidiaries. These services are in the normal
 course of business and American Express provides them pursuant to
 arrangements that American Express offers to other similar clients.                                                                                                                                                                                                                                                                                                                                                                                                                                                                

42

---



PART IV

|         |                                            |    |                                                           
|-------- | ------------------------------------------ | -- | ----------------------------------------------------------
|Item 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|         |                                           
|         | (a)                                        | 1. | Financial
 Statements:                                    
|         |                                            |    |                                                           
|         |                                            |    | See Index to
 the Financial Statements at page F-1 hereof.
|         |                                            |    |                                                           
|         |                                            | 2. | Exhibits:                                                 
|         |                                            |    |                                                           
|         |                                            |    | See Exhibit
 Index hereof.                                

43

---



SIGNATURES

Pursuant to
the requirements of Section 13 or 15(d) 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 16,
 2009 | By | /s/ David L.
 Yowan     
|      |                    |    |                         
|      |                    |    | David L.
 Yowan         
|      |                    |    | Chief
 Executive Officer

Pursuant to
the requirement of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities on the dates indicated.

|      |                   |    |                                             
|----- | ----------------- | -- | --------------------------------------------
|DATE: | November 16, 2009 | By | /s/ David L. Yowan                          
|      |                   |    |                                             
|      |                   |    | David L. Yowan                              
|      |                   |    | Chief Executive Officer and Director        
|      |                   |    |                                             
|DATE: | November 16, 2009 | By | /s/ Lawrence A. Belmonte                    
|      |                   |    |                                             
|      |                   |    | Lawrence A. Belmonte                        
|      |                   |    | Vice President and Chief
 Accounting Officer
|      |                   |    |                                             
|DATE: | November 16, 2009 | By | /s/ Anderson Y. Lee                         
|      |                   |    |                                             
|      |                   |    | Anderson Y. Lee                             
|      |                   |    | Chief Financial Officer
 and Director       
|      |                   |    |                                             
|DATE: | November 16, 2009 | By | /s/ Peter C. Sisti                          
|      |                   |    |                                             
|      |                   |    | Peter C. Sisti                              
|      |                   |    | Director                                    

44

---



AMERICAN EXPRESS CREDIT CORPORATION
INDEX TO FINANCIAL STATEMENTS
COVERED BY REPORT OF INDEPENDENTREGISTERED PUBLIC ACCOUNTING
FIRM

(Item 15 (a))

|                                                         |  |                
|-------------------------------------------------------- |  | ---------------
|                                                         |  | Page Number    
|                                                         |  |                
|                                                         |  |                
|Financial Statements:                                    |  |                
|                                                         |  |                
|Report of Independent Registered Public
 Accounting Firm |  | F  2          
|                                                         |  |                
|Consolidated Statements of Income                        |  | F  3          
|                                                         |  |                
|Consolidated Balance Sheets                              |  | F  4          
|                                                         |  |                
|Consolidated Statements of Cash Flows                    |  | F  5          
|                                                         |  |                
|Consolidated Statements of Shareholders
 Equity         |  | F  6          
|                                                         |  |                
|Notes to Consolidated Financial Statements               |  | F  7 to F  36

All other
schedules are omitted since the required information is not present or because
the information required is included in the Consolidated Financial Statements
or notes thereto.

F-1

---



Table of Contents

REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board
of Directors and Shareholder of
American Express Credit Corporation

In our
opinion, the consolidated financial statements listed in the index appearing
under Item 15(a) present fairly, in all material respects, the financial
position of American Express Credit Corporation and its subsidiaries (the
Company) at December 31, 2008 and December 31, 2007, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2008 in conformity with accounting principles generally accepted
in the United States of America. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

As discussed
in Note 1 to the consolidated financial statements, the Company has restated
its consolidated financial statements as of December 31, 2008 and 2007 and for
each of the two years in the period ended December 31, 2008 for the correction
of an error.

PricewaterhouseCoopers
LLP
New York, New York

March 30,
2009, except for the effects of the restatement described in Note 1 to the
consolidated financial statements, as to which the date is November 16, 2009

F-2

---



Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

|                                                                         |  |              |       |              |   |       |  |   |       | 
|------------------------------------------------------------------------ |  | ------------ | ----- | ------------ | - | ----- |  | - | ----- | 
|Years
 Ended December 31, (Millions)                                     |  | 2008Restated |       | 2007Restated |   | 2006  | 
|                                                                         |  |              |       |              |   |       | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Revenues                                                                 |  |              |       |              |   |       |  |   |       | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Discount revenue earned from purchased
 cardmember receivables and loans |  | $            | 2,191 |              | $ | 2,873 |  | $ | 2,223 | 
|Interest income from affiliates                                          |  |              | 744   |              |   | 650   |  |   | 523   | 
|Interest income from investments                                         |  |              | 247   |              |   | 278   |  |   | 218   | 
|Finance revenue                                                          |  |              | 48    |              |   | 53    |  |   | 47    | 
|Other                                                                    |  |              | 203   |              |   | 16    |  |   | 6     | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Total revenues                                                           |  |              | 3,433 |              |   | 3,870 |  |   | 3,017 | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Expenses                                                                 |  |              |       |              |   |       |  |   |       | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Provisions for losses, net of recoveries                                 |  |              | 641   |              |   | 842   |  |   | 589   | 
|Interest expense                                                         |  |              | 1,363 |              |   | 1,612 |  |   | 1,281 | 
|Interest expense to affiliates                                           |  |              | 255   |              |   | 434   |  |   | 333   | 
|Service fees to affiliates                                               |  |              | 173   |              |   | 192   |  |   | 93    | 
|Other                                                                    |  |              | 5     |              |   | 5     |  |   | 4     | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Total expenses                                                           |  |              | 2,437 |              |   | 3,085 |  |   | 2,300 | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Pretax income                                                            |  |              | 996   |              |   | 785   |  |   | 717   | 
|Income tax provision                                                     |  |              | 132   |              |   | 60    |  |   | 95    | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|                                                                         |  |              |       |              |   |       |  |   |       | 
|Net income                                                               |  | $            | 864   |              | $ | 725   |  | $ | 622   | 
|                                                                         |  |              |       |              |   |       |  |   |       | 

See Notes to Consolidated Financial
Statements.

F-3

---



Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED BALANCE SHEETS

|                                                                                                      |  |                |        |                |   |        |  
|----------------------------------------------------------------------------------------------------- |  | -------------- | ------ | -------------- | - | ------ | -
|December
 31, (Millions, except share data)                                                           |  | 2008
 Restated |        | 2007
 Restated |  
|                                                                                                      |  |                |        |                |  
|                                                                                                      |  |                |        |                |   |        |  
|Assets                                                                                                |  |                |        |                |   |        |  
|                                                                                                      |  |                |        |                |   |        |  
|Cash and cash equivalents                                                                             |  | $              | 8,855  |                | $ | 2,925  |  
|Cardmember receivables, less reserves:
 2008, $204; 2007, $831                                        |  |                | 10,655 |                |   | 25,402 |  
|Cardmember loans, less reserves: 2008, $14;
 2007, $10                                                |  |                | 484    |                |   | 393    |  
|Loans to affiliates                                                                                   |  |                | 11,726 |                |   | 11,201 |  
|Investment securities                                                                                 |  |                | 3,084  |                |   | 2,074  |  
|Investment securities restricted                                                                      |  |                |       |                |   | 970    |  
|Deferred charges and other assets                                                                     |  |                | 801    |                |   | 409    |  
|Due from affiliates                                                                                   |  |                | 3,660  |                |   | 2,469  |  
|                                                                                                      |  |                |        |                |   |        |  
|Total assets                                                                                          |  | $              | 39,265 |                | $ | 45,843 |  
|                                                                                                      |  |                |        |                |   |        |  
|                                                                                                      |  |                |        |                |   |        |  
|Liabilities and Shareholders Equity                                                                  |  |                |        |                |   |        |  
|                                                                                                      |  |                |        |                |   |        |  
|Short-term debt                                                                                       |  | $              | 7,367  |                | $ | 11,093 |  
|Short-term debt to affiliates                                                                         |  |                | 8,317  |                |   | 8,682  |  
|Current portion of long-term debt                                                                     |  |                | 5,201  |                |   | 7,411  |  
|Long-term debt                                                                                        |  |                | 14,809 |                |   | 14,872 |  
|                                                                                                      |  |                |        |                |   |        |  
|Total debt                                                                                            |  |                | 35,694 |                |   | 42,058 |  
|Accrued interest and other liabilities                                                                |  |                | 538    |                |   | 341    |  
|                                                                                                      |  |                |        |                |   |        |  
|Total liabilities                                                                                     |  |                | 36,232 |                |   | 42,399 |  
|                                                                                                      |  |                |        |                |   |        |  
|                                                                                                      |  |                |        |                |   |        |  
|Shareholders Equity                                                                                  |  |                |        |                |   |        |  
|                                                                                                      |  |                |        |                |   |        |  
|Common stock, $.10 par value, authorized 3
 million shares; issued and outstanding 1.5 million shares |  |                | 1      |                |   | 1      |  
|Capital surplus                                                                                       |  |                | 161    |                |   | 161    |  
|Retained earnings                                                                                     |  |                | 3,446  |                |   | 3,162  |  
|Accumulated other comprehensive income
 (loss), net of tax:                                           |  |                |        |                |   |        |  
|Net unrealized securities gains, net of
 tax: 2008, $(15); 2007, $(15)                                |  |                | 28     |                |   | 28     |  
|Net unrealized derivatives losses, net of
 tax: 2008, $19; 2007, $16                                  |  |                | (35    | )              |   | (30    | )
|Foreign currency translation adjustments,
 net of tax: 2008, $13; 2007, $(8)                          |  |                | (568   | )              |   | 122    |  
|                                                                                                      |  |                |        |                |   |        |  
|Total accumulated other comprehensive
 (loss) income                                                  |  |                | (575   | )              |   | 120    |  
|                                                                                                      |  |                |        |                |   |        |  
|Total shareholders equity                                                                            |  |                | 3,033  |                |   | 3,444  |  
|                                                                                                      |  |                |        |                |   |        |  
|Total liabilities and shareholders equity                                                            |  | $              | 39,265 |                | $ | 45,843 |  
|                                                                                                      |  |                |        |                |   |        |  

See Notes to Consolidated Financial
Statements.

F-4

---



Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                   |  |      |        |      |   |        |   |   |        |  
|---------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|Years
 Ended December 31, (Millions)                                               |  | 2008 |        | 2007 |   | 2006   |  
|                                                                                   |  |      |        |      |   |        |  
|Cash Flows from Operating Activities                                               |  |      |        |      |   |        |   |   |        |  
|Net income (restated)                                                              |  | $    | 864    |      | $ | 725    |   | $ | 622    |  
|Adjustments to reconcile net income to net
 cash provided by operating activities: |  |      |        |      |   |        |   |   |        |  
|Provisions for losses                                                              |  |      | 785    |      |   | 1,017  |   |   | 747    |  
|Amortization and other                                                             |  |      | 2      |      |   | 10     |   |   | 9      |  
|Deferred taxes                                                                     |  |      | 212    |      |   | (46    | ) |   | (6     | )
|Changes in operating assets and
 liabilities:                                      |  |      |        |      |   |        |   |   |        |  
|Due from affiliates                                                                |  |      | (258   | )    |   | 2      |   |   | 39     |  
|Other operating assets and liabilities
 (restated)                                 |  |      | 450    |      |   | (103   | ) |   | 259    |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Net cash provided by operating activities                                          |  |      | 2,055  |      |   | 1,605  |   |   | 1,670  |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Cash Flows from Investing Activities                                               |  |      |        |      |   |        |   |   |        |  
|Net decrease (increase) in cardmember
 receivables and loans (restated)            |  |      | 13,543 |      |   | 394    |   |   | (3,556 | )
|Purchase of investments                                                            |  |      | (2,637 | )    |   |       |   |   | (3,012 | )
|Maturity of investments                                                            |  |      | 600    |      |   |       |   |   | 3,019  |  
|Sales of investments                                                               |  |      | 1,994  |      |   |       |   |   |       |  
|Net increase in loans to affiliates                                                |  |      | (2,791 | )    |   | (638   | ) |   | (570   | )
|Net increase in due from affiliates
 (restated)                                    |  |      | (1,035 | )    |   | (2,377 | ) |   | (1,154 | )
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Net cash provided by (used in) investing
 activities                               |  |      | 9,674  |      |   | (2,621 | ) |   | (5,273 | )
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Cash Flows from Financing Activities                                               |  |      |        |      |   |        |   |   |        |  
|Net (decrease) increase in short-term debt
 to affiliates                          |  |      | (365   | )    |   | (904   | ) |   | 1,542  |  
|Net (decrease) increase in short-term debt                                         |  |      | (3,726 | )    |   | 5,210  |   |   | (2,060 | )
|Issuance of long-term debt                                                         |  |      | 6,265  |      |   | 3,536  |   |   | 9,021  |  
|Redemption of long-term debt                                                       |  |      | (7,388 | )    |   | (3,888 | ) |   | (4,714 | )
|Dividends paid                                                                     |  |      | (580   | )    |   | (750   | ) |   | (500   | )
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Net cash (used in) provided by financing
 activities                               |  |      | (5,794 | )    |   | 3,204  |   |   | 3,289  |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Effect on exchange rate changes on cash and
 cash equivalents                      |  |      | (5     | )    |   |       |   |   |       |  
|Net increase (decrease) in cash and cash
 equivalents                              |  |      | 5,930  |      |   | 2,188  |   |   | (314   | )
|Cash and cash equivalents at beginning of
 year                                    |  |      | 2,925  |      |   | 737    |   |   | 1,051  |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Cash and cash equivalents at end of year                                           |  | $    | 8,855  |      | $ | 2,925  |   | $ | 737    |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  

See Notes to Consolidated Financial
Statements.

F-5

---



Table of Contents

AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|---------------------------------------------------- |  | ----- | ----- | ------------- | - | ---------------- |  | -------------------------------------------------- | --- | ------------------ | - | ---- | - | - | ----- | -
|Three
 Years Ended December 31, (Millions)           |  | Total |       | Common
 Stock |   | Capital
 Surplus |  | Accumulated
 Other
 Comprehensive
 (Loss) / Income |     | Retained
 Earnings |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |  
|Balances at December 31, 2005                        |  | $     | 3,270 |               | $ | 1                |  | $                                                  | 161 |                    | $ | 28   |   | $ | 3,080 |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Comprehensive income:                                |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Net income                                           |  |       | 622   |               |   |                  |  |                                                    |     |                    |   |      |   |   | 622   |  
|Change in net unrealized securities gains            |  |       | 21    |               |   |                  |  |                                                    |     |                    |   | 21   |   |   |       |  
|Change in net unrealized derivatives gains           |  |       | 22    |               |   |                  |  |                                                    |     |                    |   | 22   |   |   |       |  
|Derivatives gains reclassified to earnings           |  |       | (69   | )             |   |                  |  |                                                    |     |                    |   | (69  | ) |   |       |  
|Foreign currency translation adjustments             |  |       | 55    |               |   |                  |  |                                                    |     |                    |   | 55   |   |   |       |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Total comprehensive income                           |  |       | 651   |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Post retirement benefit adjustment                   |  |       | (2    | )             |   |                  |  |                                                    |     |                    |   | (2   | ) |   |       |  
|Cash dividends paid                                  |  |       | (500  | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (500  | )
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Balances at December 31, 2006                        |  |       | 3,419 |               |   | 1                |  |                                                    | 161 |                    |   | 55   |   |   | 3,202 |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Comprehensive income:                                |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Net income (restated)                                |  |       | 725   |               |   |                  |  |                                                    |     |                    |   |      |   |   | 725   |  
|Change in net unrealized securities gains            |  |       | 23    |               |   |                  |  |                                                    |     |                    |   | 23   |   |   |       |  
|Change in net unrealized derivatives losses          |  |       | (26   | )             |   |                  |  |                                                    |     |                    |   | (26  | ) |   |       |  
|Derivatives gains reclassified to earnings           |  |       | (14   | )             |   |                  |  |                                                    |     |                    |   | (14  | ) |   |       |  
|Foreign currency translation adjustments
 (restated) |  |       | 80    |               |   |                  |  |                                                    |     |                    |   | 80   |   |   |       |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Total comprehensive income (restated)                |  |       | 788   |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Post retirement benefit adjustment                   |  |       | 2     |               |   |                  |  |                                                    |     |                    |   | 2    |   |   |       |  
|Adoption of FIN 48                                   |  |       | (15   | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (15   | )
|Cash dividends paid                                  |  |       | (750  | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (750  | )
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Balances at December 31, 2007 (restated)             |  |       | 3,444 |               |   | 1                |  |                                                    | 161 |                    |   | 120  |   |   | 3,162 |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Comprehensive income:                                |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Net income (restated)                                |  |       | 864   |               |   |                  |  |                                                    |     |                    |   |      |   |   | 864   |  
|Change in net unrealized securities gains            |  |       |      |               |   |                  |  |                                                    |     |                    |   |     |   |   |       |  
|Change in net unrealized derivatives losses          |  |       | (77   | )             |   |                  |  |                                                    |     |                    |   | (77  | ) |   |       |  
|Derivatives losses reclassified to earnings          |  |       | 72    |               |   |                  |  |                                                    |     |                    |   | 72   |   |   |       |  
|Foreign currency translation adjustments
 (restated) |  |       | (690  | )             |   |                  |  |                                                    |     |                    |   | (690 | ) |   |       |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Total comprehensive income (restated)                |  |       | 169   |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Cash dividends paid                                  |  |       | (580  | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (580  | )
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Balances at December 31, 2008 (restated)             |  | $     | 3,033 |               | $ | 1                |  | $                                                  | 161 |                    | $ | (575 | ) | $ | 3,446 |  
|                                                     |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  

See Notes to Consolidated Financial Statements.

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|                                           
|-------------------------------------------
|AMERICAN EXPRESS CREDIT CORPORATION        
|NOTES TO CONSOLIDATED
 FINANCIAL STATEMENTS
|                                           
|                                           

Note 1 Restated Financial Results


American
Express Credit Corporation (Credco) is amending its Annual Report on Form 10-K
for the year ended December 31, 2008 in order to reflect the restatement of its
Consolidated Financial Statements and amendments to related disclosures as of
and for the years ended December 31, 2008 and 2007. Credco is also restating
    as part of this Form 10-K/A certain financial and other quarterly information
previously issued in its Quarterly Reports on Form 10-Q for 2008 and 2007;
accordingly Form 10-Q/As for the affected periods of 2008 and 2007 will not be
filed. The restatement has no effect on Credcos net cash flows provided
by (used in) operating activities, investing activities and financing activities.
All dollar amounts and percentages herein have been adjusted for the effects
of the restatement adjustments.

The
restatement is the result of the correction of a non-cash error in the
accounting for a net investment in a consolidated foreign subsidiary that
stemmed from a funding structure executed in 2004. In the course of preparing
the financial statements for the third quarter of 2009, an error was identified
    in the initial set up of this structure in Credcos subsidiary ledgers
    that caused an incorrect automated bookkeeping entry to be recorded beginning
    in the third quarter 2007 when a portion of the funding for this net investment
    was refinanced. As a result of this incorrect automated bookkeeping entry,
    (i) other revenues in Credcos Consolidated Statements of Income and
    (ii) accrued interest and other liabilities, retained earnings and the foreign
    currency translation adjustments account included in the accumulated other
    comprehensive income (loss) component of shareholders equity in Credcos
    Consolidated Balance Sheets were incorrect beginning in the third quarter
    of 2007.

The
restatement also includes the impact of (i) certain other unrelated immaterial
errors primarily impacting income tax provision in Credcos Consolidated
Statements of Income and (ii) the correction of an asset line item
reclassification affecting cardmember receivables and due from affiliates in
Credcos Consolidated Balance Sheets.

Certain
disclosures in Notes 2, 3, 10, 13, 14 and 15 have been restated consistent with
    the Consolidated Financial Statements.

The following
tables set forth the effects of the restatement adjustments on affected line
items within Credcos previously reported Consolidated Statements of Income for
the years ended December 31, 2008 and 2007, Consolidated Balance Sheets as of
December 31, 2008 and 2007, and Consolidated Statements of Shareholders Equity
for the years ended December 31, 2008 and 2007. Refer to Note 15  Quarterly
Financial Data (Unaudited) for restated quarterly financial information.

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CONSOLIDATED STATEMENTS OF INCOME

|                     |  |                          |       |                   |   |                          |  |          |       |  |   |       | 
|-------------------- |  | ------------------------ | ----- | ----------------- | - | ------------------------ |  | -------- | ----- |  | - | ----- | 
|                     |  | December 31, 2008        |       | December 31, 2007 |  
|                     |  |                         
|(Millions)           |  | As
 Previously
 Reported |       | Restated          |   | As
 Previously
 Reported |  | Restated |      
|                    
|                    
|Other revenues       |  | $                        | 20    |                   | $ | 203                      |  | $        | 8     |  | $ | 16    | 
|Total revenues       |  | $                        | 3,250 |                   | $ | 3,433                    |  | $        | 3,862 |  | $ | 3,870 | 
|Pretax income        |  | $                        | 813   |                   | $ | 996                      |  | $        | 777   |  | $ | 785   | 
|Income tax provision |  | $                        | 68    |                   | $ | 132                      |  | $        | 57    |  | $ | 60    | 
|Net income           |  | $                        | 745   |                   | $ | 864                      |  | $        | 720   |  | $ | 725   | 



|                                                      |  |                          |        |                   |   |                          |   |          |        |  |   |        | 
|----------------------------------------------------- |  | ------------------------ | ------ | ----------------- | - | ------------------------ | - | -------- | ------ |  | - | ------ | 
|CONSOLIDATED BALANCE SHEETS                          
|                                                     
|                                                      |  | December 31, 2008        |        | December 31, 2007 |  
|                                                      |  |                         
|(Millions)                                            |  | As
 Previously
 Reported |        | Restated          |   | As
 Previously
 Reported |   | Restated |       
|                                                     
|                                                      |  |                          |        |                   |   |                          |   |          |       
|Cardmember
 receivables                               |  | $                        | 10,655 |                   | $ | 10,655                   |   | $        | 25,504 |  | $ | 25,402 | 
|Due from
 affiliates                                  |  | $                        | 3,660  |                   | $ | 3,660                    |   | $        | 2,367  |  | $ | 2,469  | 
|Accrued interest
 and other liabilities               |  | $                        | 473    |                   | $ | 538                      |   | $        | 339    |  | $ | 341    | 
|Total
 liabilities                                    |  | $                        | 36,167 |                   | $ | 36,232                   |   | $        | 42,397 |  | $ | 42,399 | 
|Retained
 earnings                                    |  | $                        | 3,322  |                   | $ | 3,446                    |   | $        | 3,157  |  | $ | 3,162  | 
|Foreign
 currency translation adjustments, net of tax |  | $                        | (379   | )                 | $ | (568                     | ) | $        | 129    |  | $ | 122    | 
|Total
 accumulated other comprehensive (loss) income  |  | $                        | (386   | )                 | $ | (575                     | ) | $        | 127    |  | $ | 120    | 
|Total
 shareholders equity                           |  | $                        | 3,098  |                   | $ | 3,033                    |   | $        | 3,446  |  | $ | 3,444  | 

CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY

|                                             |  |                      |       |          |   |       |  
|-------------------------------------------- |  | -------------------- | ----- | -------- | - | ----- | -
|(Millions)                                   |  | AsPreviouslyReported |       | Restated |  
|                                            
|Net income for year ended
 December 31, 2007 |  | $                    | 720   |          | $ | 725   |  
|Foreign currency
 translation adjustments    |  | $                    | 87    |          | $ | 80    |  
|Total comprehensive income                   |  | $                    | 790   |          | $ | 788   |  
|Balances at December 31,
 2007               |  | $                    | 3,446 |          | $ | 3,444 |  
|                                             |  |                      |       |          |   |       |  
|Net income for year ended
 December 31,2008  |  | $                    | 745   |          | $ | 864   |  
|Foreign currency
 translation adjustments    |  | $                    | (508  | )        | $ | (690  | )
|Total comprehensive income                   |  | $                    | 232   |          | $ | 169   |  
|Balances at December 31,
 2008               |  | $                    | 3,098 |          | $ | 3,033 |  

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Note 2 Summary of Significant Accounting
Policies

Basis of Presentation

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).

Credco is
primarily 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 designated
currencies outside the United States. Credco also purchases certain
interest-bearing and discounted revolving loans comprised of American Express
credit cards and Sign & Travel®, 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.

In October
2008, American Express moved to increase its flexibility in funding U.S.
consumer and small business charge card receivables by amending the receivables
purchase agreements between Credco and each of American Express Centurion Bank
(Centurion Bank) and American Express Bank, FSB (FSB), (together, the Banks).
The previous agreements called for the Banks, which issue American Express
U.S. consumer and small business charge cards, to sell all unsecuritized
receivables related to spending on those cards to Credco. The amended
agreements will give the Banks the flexibility to continue to sell the receivables
to Credco or to retain the receivables and fund them from their own sources.
These amendments will allow American Express to shift, from time-to-time, the
funding of those receivables from Credco to the Banks. Credco, which raises
funds for the purpose of buying receivables principally through the sale of
commercial paper, including through the Commercial Paper Funding Facility
(CPFF) as well as medium- and long-term debt securities, can transfer proceeds
of its funding activities in excess of its needs broadly to other subsidiaries
of American Express, including to the Banks. The new arrangements between
Credco and the Banks will have no impact on Credcos funding of United States
corporate charge card receivables and charge card receivables outside the U.S.

Credco
believes the above changes will lead to a material reduction of purchases of
cardmember receivables. However, Credco does not expect that these reductions
will have a material impact on its fixed charge coverage ratio.

Principles of Consolidation

The
Consolidated Financial Statements of Credco are prepared in conformity with
U.S. generally accepted accounting principles (GAAP). All significant
intercompany transactions are eliminated.

Credco
consolidates all voting interest entities in which Credco holds a greater than
50 percent voting interest. All other investments are accounted for under the
cost method unless Credco determines that it exercises significant influence
over an entity by means other than voting rights, in which case the entity is
accounted for under the equity method.

Credco also
consolidates any Variable Interest Entities (VIEs) for which it is considered
to be the primary beneficiary. The determination of whether an entity is a VIE
is based on the amount and characteristics of the entitys equity. An
enterprise is required to consolidate a VIE when it has a variable interest for
which it is deemed to be the primary beneficiary that is, it will absorb a
majority of the VIEs expected losses or receive a majority of the VIEs
expected residual returns. Credcos involvement with VIEs is limited and is
comprised of one entity established to fund loans to affiliates

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in an
international market. Credco has no significant interest in a VIE for which it
is not considered the primary beneficiary.

Certain
reclassifications of prior year amounts have been made to conform to the
current presentation.

Foreign Currency

Assets and
liabilities denominated in foreign currencies are translated into U.S. dollars
based upon exchange rates prevailing at the end of each year. The resulting
translation adjustments, along with any related qualifying hedge and tax
effects, are included in accumulated other comprehensive income (loss), a
component of shareholders equity. Translation adjustments, including
qualifying hedge and tax effects, are reclassified to earnings upon the sale or
substantial liquidation of investments in foreign operations. Revenues and
expenses are translated at the average month-end exchange rates during the year.
Gains and losses resulting from the remeasurement of assets and liabilities
denominated in a non-functional currency net of related hedges are reported net
in other revenue or other expense, depending on the nature of the activity, in
Credcos Consolidated Statements of Income. Net non-functional currency
transaction gains (losses) were immaterial for the years ended 2008, 2007 and
2006.

Amounts Based on Estimates and Assumptions

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,
income taxes and fair value measurements. These accounting estimates reflect
the best judgment of management, but actual results could differ.

Discount Revenue

Credco earns
discount revenue from purchasing cardmember receivables and loans at a discount
to par value. The discount is deferred and recognized as revenue over the
period that the receivables are estimated to be outstanding. Estimates are
based on the recent historical average life of cardmember receivables.

Finance Revenue

Cardmember
lending finance revenues are assessed using the average daily balance method
for loans owned and are recognized based upon the principal amount outstanding
in accordance with the terms of the applicable account agreement until the
outstanding balance is paid or written-off.

Interest Income from Investments

Interest
income for Credcos performing fixed-income securities is accrued as earned
using the effective interest method, which adjusts the yield for security
premiums and discounts, fees and other payments, so that the related security
recognizes a constant rate of return on the outstanding balance throughout its
term. These amounts are recognized until these securities are in default or
when it is likely that future interest payments will not be made as scheduled.

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Income Taxes

The taxable
income of Credco is included in the consolidated U.S. federal income tax return
of American Express. Under an agreement with TRS, taxes are recognized on a
separate company basis. American Express is subject to the income tax laws of the
United States, its states and municipalities and those of the foreign
jurisdictions in which American Express operates. These tax laws are complex,
and the manner in which they apply to the taxpayers facts is sometimes open to
interpretation. Given these inherent complexities, Credco must make judgments
in assessing the likelihood that a tax position will be sustained upon
examination by the taxing authorities based on the technical merits of the tax
position. A tax position is recognized only when, based on managements
judgment regarding the application of income tax laws, it is more likely than
not that the tax position will be sustained upon examination. The amount of
benefit recognized for financial reporting purposes is based on managements
best judgment of the most likely outcome resulting from examination given the
facts, circumstances and information available at the reporting date. Credco
adjusts the level of unrecognized tax benefits when there is new information
available to assess the likelihood of the outcome. Interest and penalties
relating to unrecognized tax benefits are reported in the income tax provision.

Deferred tax assets and liabilities are
determined based on the differences between the GAAP financial statements and
tax bases of assets and liabilities using the enacted tax rates expected to be
in effect for the years in which the differences are expected to reverse. A
valuation allowance is established when management determines that it is more
likely than not that all or some portion of the benefit of the deferred tax
assets will not be realized.

Credco does
not provide for federal income taxes on foreign earnings intended to be
permanently reinvested outside the United States.

Cash and Cash Equivalents

Cash and cash
equivalents include cash and amounts due from banks, interest-bearing bank
balances, and other highly liquid investments with original maturities of 90
days or less.

Cardmember Receivables and Loans

Cardmember
receivables represent amounts due from American Express charge card customers.
These receivables are recorded 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 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) from American Express Receivables Financing Corporation V LLC
(RFC V).

Cardmember
loans represent amounts due from customers of American Express lending
products. These loans are recorded at the time they are purchased from TRS and
certain of its subsidiaries. These loans are presented on the Consolidated
Balance Sheets net of reserves for cardmember losses and include accrued
interest receivable and fees as of the balance sheet date. Additionally,
cardmember loans include balances with extended payment terms on certain charge
card products, such as Sign & Travel®. Credcos policy is to
cease accruing for interest receivable once a cardmember loan is greater than
180 days past due. Accruals that cease are generally not resumed.

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Reserves for Losses  Cardmember Receivables
and Loans

Credcos
reserves for losses relating to cardmember receivables and loans represent managements
best estimate of losses inherent in Credcos outstanding portfolio of
receivables and loans. Managements evaluation process requires certain
estimates and judgments. Reserves for these losses are primarily based upon
models that analyze specific portfolio statistics and also reflect, to a lesser
extent, managements judgment regarding overall reserve adequacy. The analytic
models take into account several factors, including average write-off rates for
various stages of receivable aging (i.e., current, 30 days, 60 days, 90 days)
over a 24-month period and average bankruptcy and recovery rates. Management
considers whether to adjust the analytic models based on other factors, such as
reserves as a percentage of cardmember loans and receivables, and net write-off
coverage. Other factors include leading economic and market indicators, such as
the unemployment rate, consumer confidence index, the purchasing managers
index, bankruptcy filings, concentration of credit risk such as based on
tenure, industry or geographic regions, and the legal and regulatory
environment.

Cardmember
receivables balances are written off when management deems amounts to be
uncollectible and is generally determined by the number of days past due.
Receivables in bankruptcy or owed by deceased individuals are written off upon
notification, while other accounts are written off when 360 days past due for
cardmember receivables and when 180 days past due for certain cardmember
receivables within CRC. Previously, all cardmember receivables were written off
when 360 days past due. During 2008, consistent with American Express
modification of its write-off methodology due to bank regulatory guidance,
Credco modified its write-off methodology to write off certain cardmember
receivables when 180 days past due. Net cardmember receivables write-offs in
2008 included approximately $257 million resulting from this change in
write-off methodology. The impact of this change to the provision for charge
card losses was not material.

Credcos
methodology for reserving for losses relating to cardmember loans is consistent
with reserving for losses relating to cardmember receivables. Cardmember loans
(other than those in bankruptcy or owed by deceased individuals) are
written-off when 180 days past due.

Investment Securities

Investment
securities include debt securities classified within the available-for-sale
category. Available-for-sale investment securities are carried at fair value on
the Consolidated Balance Sheets with unrealized gains (losses) recorded in
accumulated other comprehensive income (loss), net of income tax provisions
(benefits). Realized gains and losses on these securities are recognized in
results of operations upon disposition of the securities using the specific
identification method on a trade date basis. In addition, realized losses are
recognized when management determines that a decline in value is
other-than-temporary, which requires judgment regarding the amount and timing
of recovery. Indicators of other-than-temporary impairment for debt securities
include issuer downgrade, default, or bankruptcy. Credco also considers the
extent to which cost exceeds fair value, the duration and size of that gap,
managements judgment about the issuers current and prospective financial
condition, as well as its intent and ability to hold the security until
recovery of the unrealized losses.

Derivative Financial Instruments and Hedging
Activities

All
derivatives are recognized at fair value as either assets or liabilities on
Credcos Consolidated Balance Sheets. The fair value of Credcos derivative
financial instruments are determined using either market quotes or valuation
models that are based upon the net present value of estimated future cash flows
and incorporate current market data inputs. Credco reports its derivative
assets and liabilities in other assets and other liabilities, respectively, on
a net by counterparty basis where

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management
believes it has the legal right of offset under enforceable netting arrangements.
The accounting for the change in the fair value of a derivative financial
instrument depends on its intended use and the resulting hedge designation, if
any, as discussed below.

Cash flow hedges

A cash flow
hedge is a derivative designated to hedge the exposure of variable future cash
flows that is attributable to a particular risk associated with an existing
recognized asset or liability or a forecasted transaction. For derivative
financial instruments that qualify as cash flow hedges, the effective portions
of the gain or loss on the derivatives are recorded in accumulated other
comprehensive income (loss) and reclassified into earnings when the hedged cash
flows are recognized into earnings. The amount that is reclassified into
earnings is presented in the Consolidated Statements of Income with the hedged
instrument or transaction impact, primarily, in interest expense. Any
ineffective portion of the gain or loss, as determined by the accounting
requirements, is reported as a component of other revenues. If a hedge is
de-designated or terminated prior to maturity, the amount previously recorded
in accumulated other comprehensive income (loss) 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 accumulated other comprehensive income (loss) are recognized into
earnings immediately.

Fair value hedges

A fair value
hedge is a derivative designated to hedge the exposure of future changes in the
fair value of an asset or liability, or an identified portion thereof that is
attributable to a particular risk. For derivative financial instruments that
qualify as fair value hedges, changes in the fair value of the derivatives, as
well as of the corresponding hedged assets, liabilities or firm commitments,
are recorded in earnings as a component of other revenues, resulting in the
ineffectiveness from the hedge relationship. 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 then amortized or accreted as an adjustment to yield over the
remaining life of the asset or liability.

Net investment hedges in foreign operations

A net
investment hedge in foreign operations is a derivative used to hedge future
changes in currency exposure of a net investment in a foreign operation. For
derivative financial instruments that qualify as net investment hedges in
foreign operations, the effective portions of financial instruments that qualify
    as net investment hedges are recorded in accumulated other comprehensive
    (loss) income as part of the cumulative translation adjustment. Any ineffective
    portions of net investment hedges are recognized in other revenues during
    the period of change.

Non-designated derivatives

For derivative
financial instruments that do not qualify for hedge accounting or are not
designated as hedges, changes in fair value are reported in current period
earnings generally as a component of other revenue, other operating expenses or
interest expense, depending on the type of derivative instrument and the nature
of the transaction.

Derivative financial instruments that qualify
for hedge accounting

Derivative
financial instruments that are entered into for hedging purposes are designated
as such when Credco enters into the contract. For all derivative financial
instruments that are designated for hedging activities, Credco formally
documents all of the hedging relationships between the hedge instruments and
the hedged items at the inception of the relationships. Management also
formally documents its risk management objectives and strategies for entering
into the hedge transactions. Credco formally assesses, at inception and on a
quarterly basis, whether derivatives designated as hedges are highly effective
in offsetting the fair value or cash flows of hedged items. These

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assessments
usually are made through the application of the dollar-offset method. Credco
does not apply the short cut method of hedge accounting to any transactions.
In accordance with its risk management policies, Credco generally structures its
hedges with very similar terms to the hedged items. When applying the
accounting requirements, Credco recognizes ineffectiveness through earnings. If
it is determined that a derivative is not highly effective as a hedge, Credco
will discontinue the application of hedge accounting.

Fair Value Measurements

Effective
January 1, 2008, Credco partially adopted the Financial Accounting Standards
Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 157, Fair
Value Measurements (SFAS No. 157). SFAS No. 157 applies broadly to financial
and non-financial assets and liabilities reported or disclosed at fair value
under existing authoritative accounting pronouncements. FASB Staff Position
(FSP) FAS 157-2, Effective Date of FASB Statement No. 157 (FSP FAS 157-2),
delays the effective date of SFAS No. 157 for non-financial assets and
non-financial liabilities, except for items that are recognized or disclosed at
fair value in Credcos financial statements on a recurring basis (at least
annually), until its fiscal year beginning after November 15, 2008, including
interim periods within that fiscal year (January 1, 2009 for Credco). In
accordance with FSP FAS 157-2, Credco has partially adopted SFAS No. 157 and
has not applied the provisions of SFAS No. 157 to its non-financial assets that
are not measured at fair value on a recurring basis.

Credcos
partial adoption of SFAS No. 157 did not result in significant changes to the
valuation techniques it had previously used to measure the fair value of its
financial instruments. 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. The adoption did not have a material impact on Credcos financial
position or results of operations.

SFAS No. 157
established a three-level hierarchy of valuation techniques used to measure
fair value, defined as follows:

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Unadjusted
 Quoted Prices - The fair value of an asset or liability is based on
 unadjusted quoted prices, in active markets for identical assets or
 liabilities. An example would be a marketable equity security that is
 actively traded on the New York Stock Exchange. (Level 1) Credco does not
 have any assets or liabilities classified within Level 1 of the fair value
 hierarchy.                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Pricing
 Models with Significant Observable Inputs - The fair value of an asset or liability
 is based on information derived from either an active market quoted price,
 which may require further adjustment based on the attributes of the financial
 asset or liability being measured, or an inactive market transaction.
 Circumstances when adjustments to market quoted prices may be appropriate
 include (i) a quoted price for an actively traded equity investment that is
 adjusted for a contractual trading restriction, or (ii) the fair value
 derived from a trade of an identical or similar security in an inactive
 market. (Level 2) Credcos investment securities and derivatives are
 classified within Level 2 of the fair value hierarchy. Refer to Notes 4 and
 8.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Pricing
 Models with Significant Unobservable Inputs - The fair value of an asset or
 liability is primarily based on internally derived assumptions surrounding
 the timing and amount of expected cash flows for the financial instrument.
 Therefore, these assumptions are unobservable in either an active or inactive
 market. An example would be the retained subordinated interest in a
 securitization trust. (Level 3) Credco does not have any assets or
 liabilities classified within Level 3 of the fair value hierarchy.                                                                                                                                                                                                                                                      

The level in
the fair value hierarchy to which an asset or liability is classified is based
upon the lowest level of input that is significant to the fair value
measurement. For example, if an asset or

F-14

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liability is
valued based on observable inputs (e.g., Level 2) as well as unobservable
inputs (e.g., Level 3), and the unobservable inputs significantly contributed
to the determination of fair value, it is classified in Level 3 of the fair
value hierarchy.

Recently Issued Accounting Standards

The FASB has
recently issued the following accounting standards, which are effective beginning
January 1, 2009. The adoption of the accounting standards listed below will not
have a material impact on Credcos financial position or results of operations.

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | SFAS No.
 160, Noncontrolling Interests in Consolidated Financial Statements (SFAS No.
 160), which is to be retrospectively applied for presentation and disclosure
 purposes, requires entities to include non-controlling (minority) interests
 in partially owned consolidated subsidiaries within shareholders equity in
 the consolidated financial statements. All amounts related to non-controlling
 interests are presented separately on the face of the financial statements.
 SFAS No. 160 also requires the consolidating entity to include,
 prospectively, all earnings of the consolidated subsidiary attributable to
 the non-controlling interest holder in its income statement with an
 offsetting charge (credit) to the non-controlling interest in shareholders
 equity.                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | SFAS No.
 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment
 of FASB Statement No. 133 (SFAS No. 161), amends and expands the disclosure
 requirements of FASB Statement No. 133, Accounting for Derivative
 Instruments and Hedging Activities (SFAS No. 133) requiring enhanced
 disclosures about Credcos derivative and hedging activities. Under SFAS No.
 161, Credco is required to provide disclosures about (a) how and why it uses
 derivative instruments, (b) how derivative instruments and related hedged
 items are accounted for under SFAS No. 133 and its related interpretations,
 and (c) how derivative instruments and related hedged items affect Credcos
 financial position, results of operations, and cash flows. SFAS No. 161 is
 effective prospectively, and applies to derivative instruments existing at
 the reporting date, with comparative disclosures of earlier periods
 encouraged upon initial adoption.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | FSP FAS
 157-2, as described above, delays the effective date of SFAS No. 157 for
 non-financial assets and non-financial liabilities, except for items that are
 recognized or disclosed at fair value in Credcos financial statements on a
 recurring basis (at least annually), until January 1, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Note 3 Cardmember Receivables and Loans

For the year
ended December 31, Credco purchased the following:

|                        |  |      |       |      |   |       | 
|----------------------- |  | ---- | ----- | ---- | - | ----- | 
|(Billions)              |  | 2008 |       | 2007 |  
|                       
|Cardmember
 receivables |  | $    | 239.4 |      | $ | 291.7 | 
|Cardmember
 loans       |  | $    | 2.2   |      | $ | 1.7   | 
|                        |  |      |       |      |   |       | 

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Table of Contents

The following
table presents the changes in the reserve for losses related to cardmember
receivables and loans:

|                                                                                                  |  |      |       |      |   |      |   |   |     |  
|------------------------------------------------------------------------------------------------- |  | ---- | ----- | ---- | - | ---- | - | - | --- | -
|Years
 Ended December 31, (Millions)                                                              |  | 2008 |       | 2007 |   | 2006 |  
|                                                                                                  |  |      |       |      |   |      |  
|Reserve for losses:                                                                               |  |      |       |      |   |      |   |   |     |  
|Balance at beginning of year                                                                      |  | $    | 841   |      | $ | 749  |   | $ | 686 |  
|Additions:                                                                                        |  |      |       |      |   |      |   |   |     |  
|Provisions for losses (a)                                                                         |  |      | 641   |      |   | 842  |   |   | 589 |  
|Other credits (b)                                                                                 |  |      | 46    |      |   | 14   |   |   | 11  |  
|Deductions:                                                                                       |  |      |       |      |   |      |   |   |     |  
|Accounts written-off (a) (c)                                                                      |  |      | 1,204 |      |   | 666  |   |   | 532 |  
|Other charges (d)                                                                                 |  |      | 106   |      |   | 98   |   |   | 5   |  
|                                                                                                  |  |      |       |      |   |      |   |   |     |  
|                                                                                                  |  |      |       |      |   |      |   |   |     |  
|Balance at end of year                                                                            |  | $    | 218   |      | $ | 841  |   | $ | 749 |  
|                                                                                                  |  |      |       |      |   |      |   |   |     |  
|                                                                                                  |  |      |       |      |   |      |   |   |     |  
|Reserve for losses as a % of gross
 cardmember receivables and loans owned at year-end (restated) |  |      | 1.9   | %    |   | 3.2  | % |   | 2.7 | %
|                                                                                                  |  |      |       |      |   |      |   |   |     |  

|    |                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes recoveries on
 accounts previously written-off of $144 million, $175 million, and $158
 million in 2008, 2007 and 2006, respectively.                                            
|    |                                                                                                                                                                                           
|(b) | Reserve balances applicable
 to new groups of cardmember receivables and loans purchased from TRS and
 certain of its subsidiaries and participation interests purchased from
 affiliates.
|    |                                                                                                                                                                                           
|(c) | The net write-offs for 2008
 include approximately $257 million resulting from the 180 day write-off
 methodology change discussed previously.                                            
|    |                                                                                                                                                                                           
|(d) | Primarily relates to reserve
 balances applicable to certain groups of cardmember receivables and
 participation interests sold to affiliates.                                            

Note 4 Investment Securities

The following
is a summary of investment securities all of which are classified as
available-for-sale at December 31:

|                                                         |  |      |       |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                       |   |    |  |   |   |  |   |       | 
|-------------------------------------------------------- |  | ---- | ----- | ------------------------ | - | ------------------------- |  | --------------------- | - | ---- | - | ------------------------ |  | ------------------------- | ----- | --------------------- | - | -- |  | - | - |  | - | ----- | 
|                                                         |  | 2008 |       | 2007                     |  
|                                                         |  |      |       |                          |  
|(Millions)                                               |  | Cost |       | Gross
 Unrealized
 Gains |   | Gross
 Unrealized
 Losses |  | Estimated
 Fair Value |   | Cost |   | Gross
 Unrealized
 Gains |  | Gross
 Unrealized
 Losses |       | Estimated
 Fair Value |  
|                                                         |  |      |       |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                       |  
|U.S. Government and agencies obligations                 |  | $    | 3,040 |                          | $ | 44                        |  | $                     |  |      | $ | 3,084                    |  | $                         | 2,048 |                       | $ | 26 |  | $ |  |  | $ | 2,074 | 
|U.S. Government and agencies obligations  restricted(a) |  |      |      |                          |   |                          |  |                       |  |      |   |                         |  |                           | 953   |                       |   | 17 |  |   |  |  |   | 970   | 
|                                                         |  |      |       |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                       |   |    |  |   |   |  |   |       | 
|Total(b)                                                 |  | $    | 3,040 |                          | $ | 44                        |  | $                     |  |      | $ | 3,084                    |  | $                         | 3,001 |                       | $ | 43 |  | $ |  |  | $ | 3,044 | 
|                                                         |  |      |       |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                       |   |    |  |   |   |  |   |       | 

(a)At December 31, 2008, there were no securities loaned out on an
overnight basis to financial institutions under the securities lending program.
At December 31, 2007, there were $970 million of securities loaned out on an
overnight basis to financial institutions under the securities lending program.

(b)Total investment securities include $2.7 billion and $2.6 billion of
senior debentures issued by Government Sponsored Enterprises (Fannie Mae and
Freddie Mac) at December 31, 2008 and December 31, 2007.

At December
31, 2008 and December 31, 2007, there were no U.S. Government and agencies
obligations held in an unrealized loss position.

F-16

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Table of Contents

Fair Value

The following is a
description of the valuation techniques utilized by Credco to measure the fair
value of its investment securities, including the general classification of
such items pursuant to the fair value hierarchy. These techniques may produce
fair values that may not be indicative of a future sale, or reflective of
future fair values. The use of different techniques to determine the fair value
of these types of investment securities could result in different estimates of
fair value at the reporting date. SFAS No. 157 was adopted by Credco on January
1, 2008; therefore, classification of Credcos investments pursuant to the fair
value hierarchy is applicable only to the estimated fair values as of December
31, 2008.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | When available, quoted
 market prices are used to determine fair value and the investment securities
 are classified within Level 1 of the fair value hierarchy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | When quoted prices in an
 active market are not available, the fair market values for Credcos
 investment securities are obtained primarily from pricing services engaged by
 Credco, and Credco receives one price for each security. The fair values
 provided by the pricing services are estimated by using pricing models, where
 the inputs to those models are based on observable market inputs. The inputs
 to the valuation techniques applied by the pricing services vary depending on
 the type of security being priced but are typically benchmark yields,
 benchmark security prices, credit spreads, prepayment speeds, reported
 trades, broker-dealer quotes, all with reasonable levels of transparency. The
 pricing services do not apply any adjustments to the pricing models used, nor
 does Credco apply any adjustments to prices received from the pricing
 services. Although the underlying inputs are directly observable from active
 markets or recent trades of similar securities in inactive markets, the
 pricing models used do entail a certain amount of subjectivity and therefore
 differing judgments in how the underlying inputs are modeled could result in
 different estimates of fair value. As of December 31, 2008, all of Credcos
 investment securities are classified within Level 2 of the fair value
 hierarchy.

Credco has reaffirmed its
understanding of the valuation techniques used by its pricing services. No
adjustments were deemed necessary to the prices provided by the pricing
services as a result of current market conditions. In addition, Credco
corroborates the prices provided by its pricing services to test their
reasonableness by comparing their prices to valuations from different pricing
sources as well as comparing prices to the sale prices received from sold
securities.

Credco reviews
and evaluates investment securities at least quarterly and more often as market
conditions may require to identify investment securities that have indications
of other-than-temporary impairments. The determination of other-than-temporary
impairment is a subjective process, requiring the use of judgments and
assumptions. Accordingly, Credco considers several metrics when evaluating
investment securities for an other-than-temporary impairment, including the
extent to which amortized cost exceeds fair value, the duration and size of
that difference, and the issuers credit rating. Key factors considered when
assessing other-than-temporary impairment include the determination of the
extent to which the difference is due to increased default risk for the
specific issuer, or market interest rate risk. With respect to increased
default risk, Credco assesses the collectibility of principal and interest
payments by monitoring issuers credit ratings, related changes to those
ratings, specific credit events associated with the individual issuers as well
as the credit ratings of financial guarantor, where applicable. With respect to
market interest rate risk, including benchmark interest rates and credit
spreads, Credcos intent and ability to hold the securities for a time
sufficient to recover the unrealized losses is a significant consideration in
the other-than-temporary evaluation process. As of December 31, 2008, there
were no unrealized losses or

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Table of Contents

temporary
impairments by ratio of fair value to amortized cost.

The change in
net unrealized securities gains (losses) in other comprehensive income includes
two components: (i) holding gains (losses), which are unrealized gains (losses)
that arose from changes in market value of securities that were held during the
period; and (ii) reclassification for realized (gains) losses, which are gains
(losses) that were previously unrealized, but have been recognized in current
period net income due to sales of available-for-sale securities.

The following
table summarizes the net change in accumulated other comprehensive income
(loss) related to unrealized securities gains and losses:

|                                                              |  |      |    |      |   |      |  |   |     |  
|------------------------------------------------------------- |  | ---- | -- | ---- | - | ---- |  | - | --- | -
|Years Ended
 December 31, (Millions, net of tax)              |  | 2008 |    | 2007 |   | 2006 | 
|                                                              |  |      |    |      |   |      | 
|Balance at beginning of
 year                                 |  | $    | 28 |      | $ | 5    |  | $ | (16 | )
|                                                              |  |      |    |      |   |      |  |   |     |  
|Net unrealized securities
 gains                              |  |      |   |      |   | 23   |  |   | 5   |  
|Reclassification for net
 realized losses                     |  |      |   |      |   |     |  |   | 16  |  
|                                                              |  |      |    |      |   |      |  |   |     |  
|Net unrealized securities gains in other comprehensive income |  |      |   |      |   | 23   |  |   | 21  |  
|                                                              |  |      |    |      |   |      |  |   |     |  
|Balance at end of year                                        |  | $    | 28 |      | $ | 28   |  | $ | 5   |  
|                                                              |  |      |    |      |   |      |  |   |     |  

The following
is a distribution of available-for-sale investment securities by maturity as of
December 31, 2008:

|           |  |      |       |                      |   |       | 
|---------- |  | ---- | ----- | -------------------- | - | ----- | 
|(Millions) |  | Cost |       | Estimated Fair Value |  
|           |  |      |       |                      |  
|2009       |  | $    | 1,002 |                      | $ | 1,025 | 
|2010       |  |      | 2,038 |                      |   | 2,059 | 
|           |  |      |       |                      |   |       | 
|Total      |  | $    | 3,040 |                      | $ | 3,084 | 
|           |  |      |       |                      |   |       | 

Note 5 Short-Term
Debt

Credcos short-term debt
outstanding, defined as debt with original maturities of less than one year, at
December 31, was as follows:

|                    |  |                      |       |                                    |  |                                                         |   |                      |   |                                    |   |                                                        |  |  |      |   |  |      |  
|------------------- |  | -------------------- | ----- | ---------------------------------- |  | ------------------------------------------------------- | - | -------------------- | - | ---------------------------------- | - | ------------------------------------------------------ |  |  | ---- | - |  | ---- | -
|(Millions)          |  | 2008                 |       | 2007                               | 
|                    |  |                      |       |                                    | 
|                    |  | Outstanding
 Balance |       | Year-End
 Stated Rate
 on Debt (a) |  | Year-End
 Effective
 Interest
 Rate with 
 Swaps (a)(b) |   | Outstanding
 Balance |   | Year-End
 Stated Rate
 on Debt (a) |   | Year-End
 Effective
 Interest
 Rate with
 Swaps (a)(b) | 
|                    |  |                      |       |                                    |  |                                                         |   |                      |   |                                    |   |                                                        | 
|                    |  |                      |       |                                    |  |                                                         |   |                      |   |                                    |   |                                                        |  |  |      |   |  |      |  
|Commercial paper(c) |  | $                    | 7,272 |                                    |  | 2.20                                                    | % |                      |  |                                    | $ | 10,489                                                 |  |  | 4.36 | % |  | 4.33 | %
|                    |  |                      |       |                                    |  |                                                         |   |                      |   |                                    |   |                                                        |  |  |      |   |  |      |  
|Borrowed Funds      |  |                      |      |                                    |  |                                                        |   |                      |  |                                    |   | 305                                                    |  |  | 4.85 | % |  |     |  
|                    |  |                      |       |                                    |  |                                                         |   |                      |   |                                    |   |                                                        |  |  |      |   |  |      |  
|Bank notes payable  |  |                      | 95    |                                    |  | 0.32                                                    | % |                      |  |                                    |   | 299                                                    |  |  | 4.71 | % |  |     |  
|                    |  |                      |       |                                    |  |                                                         |   |                      |   |                                    |   |                                                        |  |  |      |   |  |      |  
|Total               |  | $                    | 7,367 |                                    |  | 2.18                                                    | % |                      |   |                                    | $ | 11,093                                                 |  |  | 4.38 | % |  |      |  
|                    |  |                      |       |                                    |  |                                                         |   |                      |   |                                    |   |                                                        |  |  |      |   |  |      |  

|    |                                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | For floating rate debt
 issuances, the stated and effective interest rates are based on the floating
 rates in effect at December 31, 2008 and 2007, respectively. These rates are
 not an indication of future interest rates.                                                                                             
|    |                                                                                                                                                                                                                                                                                                                             
|(b) | Effective interest rates are
 only presented if swaps are in place to hedge the underlying debt at the
 respective year-end.                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                             
|(c) | Includes $4.5 billion of
 commercial paper purchased by the Federal Reserve Bank of New Yorks Special
 Purpose Vehicle (SPV) through the CPFF at December 31, 2008. Credco is
 permitted to issue up to a maximum of $14.7 billion to the SPV that was
 created for this purpose. The facility will mature in October 2009.

Credco has various facilities available to obtain short-term funding, including the
issuance of

F-18

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Table of Contents

commercial
paper and agreements with banks. At December 31, 2008, there were no short-term
borrowings under committed lines of credit. Credco pays fees to the financial
institutions that provide these credit line facilities.

Credco paid
interest on short-term debt obligations and corresponding interest rate swaps
of $649 million, $836 million and $615 million, in 2008, 2007 and 2006,
respectively.

Note 6 Long-Term Debt

Credcos long-term debt
outstanding, defined as debt with original maturities of one year or greater,
at December 31, was as follows:

|                                           |  |                 |  |                         |        |                                    |      |                                                        |  |                         |   |                                    |   |                                                        |  |      |   |  |      |   | 
|------------------------------------------ |  | --------------- |  | ----------------------- | ------ | ---------------------------------- | ---- | ------------------------------------------------------ |  | ----------------------- | - | ---------------------------------- | - | ------------------------------------------------------ |  | ---- | - |  | ---- | - | 
|(Millions)                                 |  | 2008            |  | 2007                   
|                                           |  |                 |  |                         |        |                                    |      |                                                        |  |                         |   |                                    |   |                                                        | 
|                                           |  | Maturity
 Dates |  | Outstanding
 Balance(a) |        | Year-End
 Stated Rate
 on Debt (b) |      | Year-End
 Effective
 Interest
 Rate with
 Swaps (b)(c) |  | Outstanding
 Balance(a) |   | Year-End
 Stated Rate
 on Debt (b) |   | Year-End
 Effective
 Interest
 Rate with
 Swaps (b)(c) | 
|                                           |  |                 |  |                         |        |                                    |      |                                                        |  |                         |   |                                    |   |                                                        | 
|                                          
|Fixed and Floating Rate Senior Notes(d)(e) |  | 2009-2017       |  | $                       | 17,504 |                                    | 3.85 | %                                                      |  | 3.28                    | % |                                    | $ | 19,137                                                 |  | 4.98 | % |  | 4.97 | % | 
|Borrowings under Bank Credit Facilities    |  | 2012            |  |                         | 2,506  |                                    | 4.56 | %                                                      |  | 4.88                    | % |                                    |   | 3,146                                                  |  | 7.34 | % |  | 7.09 | % | 
|                                           |  |                 |  |                         |        |                                    |      |                                                        |  |                         |   |                                    |   |                                                        |  |      |   |  |      |   | 
|Total                                      |  |                 |  | $                       | 20,010 |                                    | 3.86 | %                                                      |  |                         |   |                                    | $ | 22,283                                                 |  | 5.31 | % |  |      |   | 
|                                           |  |                 |  |                         |        |                                    |      |                                                        |  |                         |   |                                    |   |                                                        |  |      |   |  |      |   | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The outstanding balance
 reflects the impact of fair value hedge accounting whereby certain fixed rate
 notes have been swapped to floating rate through the use of interest swaps
 and are marked to market, as is the associated swap that is reported as a
 derivative asset or liability. In 2008 and 2007, the effect of these
 adjustments was $410 million and $30 million, respectively. Refer to Note 8
 for more details on Credcos treatment of fair value hedges.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(b) | For floating rate debt
 issuances, the stated and effective interest rates are based on the floating
 rates in effect at December 31, 2008 and 2007, respectively. These rates are
 not indicative of future interest rates.                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(c) | Effective interest rates
 are only presented when swaps are in place to hedge the underlying debt at
 the respective year-end.                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(d) | As of December 31, 2008 and
 2007, Credcos outstanding debt includes $14 million and $19 million,
 respectively, of long-term note held by an affiliate.                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(e) | Includes current portion of
 long-term debt of $5.2 billion and $7.4 billion at December 31, 2008 and
 2007, respectively.                                                                                                                                                                                                                                                                                                                                                    

Aggregate
annual maturities of long-term debt obligations (based on final maturity dates)
at December 31, 2008, were as follows (millions):

|           |  |   |        | 
|---------- |  | - | ------ | 
|Year       |  |   |        | 
|           |  |   |        | 
|2009       |  | $ | 5,201  | 
|2010       |  |   | 3,361  | 
|2011       |  |   | 1,754  | 
|2012       |  |   | 4,005  | 
|2013       |  |   | 5,142  | 
|Thereafter |  |   | 547    | 
|           |  |   |        | 
|Total      |  | $ | 20,010 | 
|           |  |   |        | 

Credco paid
interest on long-term debt obligations and corresponding interest rate swaps,
of $1.0 billion, $1.2 billion and $930 million in 2008, 2007 and 2006,
respectively.

Other
financial institutions have committed to extend lines of credit to Credco,
including $1.3 billion from American Express Parent Company, of $10.4 billion
and $11.6 billion at December 31, 2008 and 2007, respectively. Of these
amounts, $7.9 billion and $8.2 billion remained available for use as

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of December
31, 2008 and 2007, respectively.

Note 7 Restrictions
as to Dividends and Limitations on Indebtedness

The most
restrictive limitation on dividends imposed by the debt instruments issued by
Credco is the requirement that Credco maintain a minimum consolidated net worth
of $50 million. There are no limitations on the amount of debt that can be
issued by Credco.

Note 8 Derivatives
and Hedging Activities

Credco uses derivative
financial instruments to manage exposure to various market risks such as
changes in benchmark interest rates and foreign exchange rates. 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 and related asset/liability management strategy and processes. Credco does
not engage in any trading activities.

The fair value of Credcos
derivatives is estimated by using pricing models that 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 valuation models used by Credco 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.

In certain instances, credit
valuation adjustments are necessary when the market parameters (for example, a
benchmark curve) used to value derivatives is 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.

Credco manages derivative
counterparty credit 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 twelve months,
considering such factors as the volatility of the underlying or reference
index. To mitigate derivative instrument credit risk, counterparties are
required to be pre-approved and rated as investment grade. Additionally, Credco
may, on occasion, enter into master netting agreements.

As of December 31, 2008, the
credit and nonperformance risks associated with the Credcos derivative
counterparties were not significant.

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The following table
summarizes the total fair value, excluding interest accruals, of derivative
product assets and liabilities, included within deferred charges and other
assets and accrued interest and other liabilities, respectively, at December
31:

|                                         |  |        |     |             |   |        |  |             |    |  |   |    | 
|---------------------------------------- |  | ------ | --- | ----------- | - | ------ |  | ----------- | -- |  | - | -- | 
|(Millions)                               |  | 2008   |     | 2007        |  
|                                         |  |        |     |             |   |        |  |             |   
|                                         |  | Assets |     | Liabilities |   | Assets |  | Liabilities |   
|                                         |  |        |     |             |   |        |  |             |   
|                                        
|Cash flow hedges                         |  | $      |    |             | $ | 54     |  | $           | 11 |  | $ | 56 | 
|Fair value hedges                        |  |        | 431 |             |   |       |  |             | 30 |  |   |   | 
|Net investment hedges                    |  |        | 39  |             |   | 22     |  |             | 3  |  |   | 6  | 
|Derivatives not designated
 as hedges    |  |        | 67  |             |   | 36     |  |             | 29 |  |   | 19 | 
|                                         |  |        |     |             |   |        |  |             |    |  |   |    | 
|Total fair value,
 excluding accruals(b) |  | $      | 537 |             | $ | 112    |  | $           | 73 |  | $ | 81 | 
|                                         |  |        |     |             |   |        |  |             |    |  |   |    | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | SFAS No. 157 was adopted by
 Credco on January 1, 2008. The fair values of Credcos derivative instruments
 are classified within Level 2 of the fair value hierarchy.                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(b) | Financial Interpretation
 No. 39, Offsetting of Amounts Related to Certain Contracts (FIN 39),
 permits the netting of derivative assets and derivative liabilities when a
 legally enforceable master netting agreement exists between Credco and its
 derivative counterparty. At December 31, 2008 and 2007, $8 million and $2
 million, respectively, of derivative assets and liabilities have been offset
 and represents the impact of legally enforceable master netting agreements
 that provide for the net settlement of all contracts in accordance with FIN
 39.

The following table
summarizes the income effects of derivatives for the years ended December 31:

|                                                                                    |  |      |     |      |   |      |  |   |    | 
|----------------------------------------------------------------------------------- |  | ---- | --- | ---- | - | ---- |  | - | -- | 
|(Millions)                                                                          |  | 2008 |     | 2007 |   | 2006 | 
|                                                                                    |  |      |     |      |   |      |  |   |    | 
|                                                                                   
|Cash flow hedges, net of tax(a):                                                    |  |      |     |      |   |      |  |   |    | 
|Reclassification of realized (losses) gains
 from other comprehensive (loss) income |  | $    | (72 | )    | $ | 14   |  | $ | 69 | 
|Fair value hedges, net of tax(a):                                                   |  |      |     |      |   |      |  |   |    | 
|Ineffective net gains                                                               |  | $    | 13  |      | $ |     |  | $ |   | 
|                                                                                    |  |      |     |      |   |      |  |   |    | 

|    |                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | There were no (losses)
 gains due to exclusion of any component of derivative instruments from the
 assessment of hedge effectiveness for 2008, 2007 and 2006.

The following table
summarizes the net change in accumulated other comprehensive income (loss) of
derivatives for the years ended December 31:

|                                                                   |  |      |     |      |   |      |   |   |     |  
|------------------------------------------------------------------ |  | ---- | --- | ---- | - | ---- | - | - | --- | -
|(Millions)                                                         |  | 2008 |     | 2007 |   | 2006 |  
|                                                                   |  |      |     |      |   |      |   |   |     |  
|                                                                  
|Cash flow
 hedges, net of tax(a):                                  |  |      |     |      |   |      |   |   |     |  
|Unrealized (losses) gains                                          |  | $    | (77 | )    | $ | (26  | ) | $ | 22  |  
|Reclassification for realized losses
 (gains)                      |  |      | 72  |      |   | (14  | ) |   | (69 | )
|                                                                   |  |      |     |      |   |      |   |   |     |  
|Net change in accumulated other
 comprehensive (loss) income       |  | $    | (5  | )    | $ | (40  | ) | $ | (47 | )
|                                                                   |  |      |     |      |   |      |   |   |     |  
|Net
 investment hedges:                                            |  |      |     |      |   |      |   |   |     |  
|Net losses related to hedges in cumulative
 translation adjustment |  | $    | 186 |      | $ | (43  | ) | $ | (15 | )
|                                                                   |  |      |     |      |   |      |   |   |     |  
|Net change in accumulated other
 comprehensive (loss) income       |  | $    | 186 |      | $ | (43  | ) | $ | (15 | )
|                                                                   |  |      |     |      |   |      |   |   |     |  

|    |                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The net unrealized
 derivatives (losses) gains, net of tax, reflected in accumulated other
 comprehensive (loss) income as of December 31, 2008, 2007 and 2006, were
 $(35) million, $(30) million and $10 million, respectively.

Cash Flow Hedges

A cash flow
hedge is a derivative designated to hedge the exposure of variable future cash
flows attributable to a particular risk of an existing recognized asset or
liability, or a forecasted transaction. Credco hedges existing long-term
variable rate debt, the rollover of short-term borrowings, primarily

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commercial
paper, and the anticipated forecasted issuance of additional funding through
the use of derivative instruments, primarily interest rate swaps. These
derivative instruments effectively convert floating rate debt to a fixed rate
debt for the duration of the swap.

In the normal
course of business, as derivatives mature, Credco expects to reclassify $47
million of net pretax losses on derivative instruments from accumulated other
comprehensive (loss) income to earnings during the next twelve months.

Fair Value Hedges

A fair value hedge is a
derivative designated to hedge the exposure of 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 convert certain fixed-rate long-term debt to floating rate at the time of
issuance.

If the fair value hedge is
fully effective, the gain or loss on the hedging instrument would exactly
offset the loss or gain on the hedged item attributable to the hedged risk. Any
difference between the changes in the fair value of the derivatives and the
hedged item is referred to as hedge ineffectiveness. Hedge ineffectiveness may
be caused by differences between the interest coupon and the benchmark rate,
primarily due to credit spreads at inception of the hedging relationship, which
are not economically reflected in the terms of the interest rate swap.

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 designates foreign currency
derivatives, primarily forward agreements, 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 portions of financial instruments that qualify as net investment
hedges are recorded in accumulated other comprehensive (loss) income as part
of the cumulative translation adjustment. Any ineffective portions of net investment
hedges are recognized in other revenues during the period of change.

Derivatives not
Designated as Hedges

Credco has derivatives that
act as economic hedges and that either do not qualify or are not designated for
hedge accounting treatment. Foreign currency transactions and non-U.S. dollar
cash flow exposures may from time to time be partially or fully economically
hedged through foreign currency contracts, primarily forward contracts, foreign
currency 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.
For Credcos economic hedges, the changes in the fair value of the derivative
instrument significantly offset within the Consolidated Statements of Income, the
related foreign exchange gains or losses on the underlying hedged exposures.
From time to time, Credco may enter into interest rate swaps to specifically
manage funding costs related to its proprietary card business.

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The following table provides
the total fair value, excluding accruals, of these derivative products assets
and liabilities included within deferred charges and other assets and accrued
interest and other liabilities, respectively, as of December 31:

|                                      |  |        |    |             |   |        |  |             |    |  |   |    | 
|------------------------------------- |  | ------ | -- | ----------- | - | ------ |  | ----------- | -- |  | - | -- | 
|(Millions)                            |  | 2008   |    | 2007        |  
|                                      |  |        |    |             |  
|                                      |  | Assets |    | Liabilities |   | Assets |  | Liabilities |   
|                                      |  |        |    |             |   |        |  |             |   
|Foreign currency
 transactions        |  | $      | 67 |             | $ | 31     |  | $           | 29 |  | $ | 17 | 
|Interest rate swaps                   |  |        |   |             |   | 5      |  |             |   |  |   | 2  | 
|                                      |  |        |    |             |   |        |  |             |    |  |   |    | 
|Total fair value,
 excluding accruals |  | $      | 67 |             | $ | 36     |  | $           | 29 |  | $ | 19 | 
|                                      |  |        |    |             |   |        |  |             |    |  |   |    | 

Note 9 Variable
Interest Entities

Credco
established a variable interest entity (American Express Canada Credit
Corporation) used primarily to loan funds to affiliates, which are funded by
third party borrowings. Credco is considered the primary beneficiary of the
entity and, therefore, consolidates the entity. Total assets as of December 31,
2008 and 2007 were $2.0 billion and $2.6 billion, respectively. Total
liabilities as of December 31, 2008 and 2007 were $1.9 billion and $2.4
billion, respectively. Credco consolidates this entity, because it owns all of the outstanding
voting interests and is considered the primary beneficiary.

Note 10 Transactions
with Affiliates

In 2008, 2007
and 2006, Credco purchased cardmember receivables and loans without recourse
from TRS and certain of its subsidiaries totaling approximately $241.6 billion,
$293.4 billion and $281.0 billion, respectively. The receivables agreements
require TRS and other Card Issuers, at their expense, to perform accounting,
clerical and other services necessary to bill and collect all cardmember
receivables and loans owned by Credco. Since settlements under the agreements
occur monthly, an amount due from, or payable to, such affiliates may arise at the
end of each month.

At December
31, 2008 and 2007, CRC owned approximately $2.4 billion and $5.7 billion,
respectively, of participation interests purchased from RFC V.

Other
transactions with American Express and its subsidiaries as of and for the years
ended December 31 were as follows:

|                                                                      |  |      |        |      |   |        |     |   |       |    
|--------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | --- | - | ----- | ---
|December
 31, (Millions)                                              |  | 2008 |        | 2007 |   | 2006   |    
|                                                                      |  |      |        |      |   |        |    
|Cash and
 cash equivalents maintained with affiliates                 |  | $    |       |      | $ | 4      |     | $ | 5     |    
|Maximum
 month-end level of cash and cash equivalents during the year |  |      | 2      |      |   | 9      |     |   | 145   |    
|Loans to
 affiliates                                                  |  |      | 11,726 |      |   | 11,201 |     |   | 9,691 |    
|Due from
 affiliates                                                  |  |      | 3,660  |      |   | 2,469  | (b) |   | 94    | (b)
|Maximum
 month-end level of loans to affiliates during the year       |  |      | 14,046 |      |   | 11,346 |     |   | 9,691 |    
|Short-term
 debt to affiliates                                        |  |      | 8,317  |      |   | 8,682  |     |   | 9,586 |    
|Maximum month-end
 level of borrowings during the year                |  |      | 12,583 |      |   | 10,139 |     |   | 9,719 |    
|Interest
 income from affiliates                                      |  |      | 744    |      |   | 650    |     |   | 523   |    
|Other income
 from affiliates                                         |  |      | 8      |      |   | 8      |     |   | 6     |    
|Interest
 expense to affiliates                                       |  |      | 255    |      |   | 434    |     |   | 333   |    
|Service fees
 to affiliates(a)                                        |  |      | 173    |      |   | 192    |     |   | 93    |    
|                                                                      |  |      |        |      |   |        |     |   |       |    

|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Fees paid to affiliates for
 related servicing of receivables purchased.                                                                                             
|    |                                                                                                                                                                      
|(b) | The Consolidated Balance Sheets reflect the correction
       of an asset line item reclassification affecting cardmember receivables
       and due from affiliates.

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Credcos loans to affiliates
represent fixed and floating rate interest-bearing intercompany borrowings by
other wholly-owned TRS subsidiaries and American Express. Revenue earned from
cardmember receivables with recourse and cardmember receivables and loans
funded by loans to affiliates is recorded as interest income from affiliates in
the Consolidated Statements of Income. As of December 31, 2008, no significant
amount of loss reserves has been recorded and no amount of loans is 30 days or
more past due.

At December 31, 2008,
short-term debt to affiliates was $8.3 billion, resulting in a year-end
weighted average effective interest rate of 1.05 percent.

Components of
loans to affiliates at December 31 were as follows:

|                                             |  |      |        |      |   |        | 
|-------------------------------------------- |  | ---- | ------ | ---- | - | ------ | 
|(Millions)                                   |  | 2008 |        | 2007 |  
|                                             |  |      |        |      |  
|TRS
 Subsidiaries:                           |  |      |        |      |   |        | 
|American Express Australia Limited           |  | $    | 3,204  |      | $ | 3,897  | 
|American Express Services Europe Limited (a) |  |      | 2,388  |      |   | 3,659  | 
|Amex Bank of Canada                          |  |      | 2,257  |      |   | 2,664  | 
|American Express Centurion Bank(b)           |  |      | 2,225  |      |   |       | 
|American Express International, Inc.         |  |      | 943    |      |   | 535    | 
|American
 Express Co. (Mexico) S.A. de C.V.  |  |      | 392    |      |   | 446    | 
|American
 Express Bank (Mexico) S.A. (c)     |  |      | 317    |      |   |       | 
|                                             |  |      |        |      |   |        | 
|Total (d)                                    |  | $    | 11,726 |      | $ | 11,201 | 
|                                             |  |      |        |      |   |        | 

|    |                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In April
 2008, Credco amended the funding structure with Germany from a transfer of
 receivables with recourse to a purchase of cardmember receivables without
 recourse, thereby reducing the loans to American Express Services Europe
 Limited by approximately $675 million.
|    |                                                                                                                                                                                                                                                                                  
|(b) | During 2008, Credco loaned
 $2.2 billion to Centurion Bank as a consequence of the amendment to the
 Receivables Agreements, described earlier. In February 2009, Centurion Bank
 repaid $2.2 billion to Credco.                                                                 
|    |                                                                                                                                                                                                                                                                                  
|(c) | During 2008, Credco loaned
 $317 million to American Express Bank (Mexico) S.A.                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                  
|(d) | Of the $11.7 billion outstanding of
 loans to affiliates, approximately $6.0 billion are collateralized by the
 underlying cardmember receivables transferred with recourse.                                                                                                     

The above transactions were
based on negotiated pricing between Credco and its related parties and this
pricing is intended to but may not approximate market terms, even though
comparable market pricing for unrelated parties may not be readily available in
all circumstances.

Note 11 Fair Values of Financial
Instruments

SFAS No. 107,
Disclosures About Fair Value of Financial Instruments, requires the
disclosure of the estimated fair value of 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 of SFAS
No. 107 exclude leases, affiliate investments, pension and benefit obligations,
insurance contracts, and all non-financial instruments.

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The following
table discloses fair value information of Credcos financial instrument assets
and liabilities that are included in the scope of SFAS No. 107 as of December
31:

|                                                                       |  |                 |    |            |   |                 |  |            |    |  |   |    | 
|---------------------------------------------------------------------- |  | --------------- | -- | ---------- | - | --------------- |  | ---------- | -- |  | - | -- | 
|(Billions)                                                             |  | 2008            |    | 2007       |  
|                                                                       |  |                 |    |            |  
|                                                                       |  | Carrying
 Value |    | Fair Value |   | Carrying
 Value |  | Fair Value |   
|                                                                       |  |                 |    |            |   |                 |  |            |    |  |   |    | 
|Financial Instrument Assets:                                           |  |                 |    |            |   |                 |  |            |    |  |   |    | 
|Assets for which carrying values equal or
 approximate fair value      |  | $               | 27 |            | $ | 27              |  | $          | 34 |  | $ | 34 | 
|Loans to affiliates                                                    |  | $               | 12 |            | $ | 12              |  | $          | 11 |  | $ | 11 | 
|Financial Instrument Liabilities:                                      |  |                 |    |            |   |                 |  |            |    |  |   |    | 
|Liabilities for which carrying values equal
 or approximate fair value |  | $               | 16 |            | $ | 16              |  | $          | 20 |  | $ | 20 | 
|Long-term debt                                                         |  | $               | 20 |            | $ | 18              |  | $          | 22 |  | $ | 22 | 
|                                                                       |  |                 |    |            |   |                 |  |            |    |  |   |    | 

The fair
values of these financial instruments are estimates based upon market
conditions and perceived risks as of December 31, 2008 and 2007, and require
management judgment. These figures may not be indicative of their future fair
values. The fair value of Credco cannot be estimated by aggregating the amounts
presented.

The following
methods were used to determine estimated fair values:

Financial
instruments assets for which carrying values equal or approximate fair values

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

Investments

Investments
are recorded at fair value on the Consolidated Balance Sheets with unrealized
gains and losses recorded in accumulative other comprehensive (loss) income.
The recognized gains and losses are recognized in the Consolidated Statements
of Income upon disposition of the securities or when management determines that
a decline in value is other-than-temporary. See Note 4 for carrying and fair
value information regarding investments.

Derivative Financial Instruments

Derivative
financial instruments are recorded at fair value on the Consolidated Balance
Sheets, with gains and losses recognized in the Consolidated Statements of
Income or Consolidated Balance Sheets based upon the nature of the derivative.
See Note 8 for fair value information regarding derivative financial
instruments.

Financial
instruments liabilities for which carrying values equal or approximate fair
values

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

Long-term Debt

For long-term
debt, fair value is estimated using either quoted market prices or discounted
cash flows based on Credcos current borrowing rates for similar types of
borrowing. For variable-rate long-term

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debt that
reprices within one year, fair value approximates carrying value.

Note 12 Significant
Credit Concentrations

Concentrations
of credit risk exist when changes in economic, industry or geographic factors
similarly affect groups of counterparties whose aggregate credit exposure is
material in relation to Credcos total credit exposure. Credcos primary credit
exposure, cardmember receivables and loans and loans to affiliates, is
diversified among TRS affiliated companies that operate in diverse industries,
economic sectors and geographic regions.

The following
table details Credcos credit exposure by category at December 31:

|                                         |  |      |    |      |   |    | 
|---------------------------------------- |  | ---- | -- | ---- | - | -- | 
|(Billions)                               |  | 2008 |    | 2007 |  
|                                        
|Balance
 sheet:                          |  |      |    |      |   |    | 
|Individuals                              |  |      |    |      |   |    | 
|Cardmember receivables and loans         |  | $    | 6  |      | $ | 21 | 
|Loans to affiliate                       |  |      | 12 |      |   | 11 | 
|Due from affiliate                       |  |      | 4  |      |   | 2  | 
|Money market securities (a)              |  |      | 9  |      |   | 3  | 
|U.S. Government and agencies obligations |  |      | 3  |      |   | 3  | 
|All other (b)                            |  |      | 6  |      |   | 7  | 
|                                         |  |      |    |      |   |    | 
|Total
 balance sheet (c)                 |  | $    | 40 |      | $ | 47 | 
|                                         |  |      |    |      |   |    | 

|    |                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|(a) | Money market securities
 include money market funds and short-term, high credit quality debt
 obligations of banks and corporations.
|    |                                                                                                                                     
|(b) | All other primarily includes
 cardmember receivables from other Corporate institutions.                                             
|    |                                                                                                                                     
|(c) | Certain distinctions between
 categories require management judgment.                                                               

At December
31, 2008, Credcos most significant concentration of credit risk was primarily
with cardmember receivables and loans. Credco purchased cardmember receivables
and loans from TRS and certain of its subsidiaries. TRS considers, on behalf of
Credco, credit performance by customer tenure, industry, and geographic
location in managing credit exposure. The following table details Credcos
cardmember receivables and lending exposure in the United States and International,
at December 31:

|               |  |      |    |      |   |    | 
|-------------- |  | ---- | -- | ---- | - | -- | 
|(Billions)     |  | 2008 |    | 2007 |  
|              
|Balance sheet: |  |      |    |      |   |    | 
|United States  |  | $    | 8  |      | $ | 24 | 
|International  |  |      | 3  |      |   | 3  | 
|               |  |      |    |      |   |    | 
|Balance sheet  |  | $    | 11 |      | $ | 27 | 
|               |  |      |    |      |   |    | 

The following
table details Credcos loans to affiliates in the United States and
International, at December 31:

|               |  |      |    |      |   |    | 
|-------------- |  | ---- | -- | ---- | - | -- | 
|(Billions)     |  | 2008 |    | 2007 |  
|              
|Balance sheet: |  |      |    |      |   |    | 
|United States  |  | $    | 2  |      | $ |   | 
|International  |  |      | 10 |      |   | 11 | 
|               |  |      |    |      |   |    | 
|Balance sheet  |  | $    | 12 |      | $ | 11 | 
|               |  |      |    |      |   |    | 

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Note 13 Income Taxes

The taxable
income of Credco is included in the consolidated U.S. federal income tax return
of American Express. Under an agreement with TRS, taxes are recognized on a
separate company basis. If income tax 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 the American Express federal tax returns for the years
1997 through 2002. However, for federal income tax purposes, these years
continue to remain open as a consequence of certain issues under appeal.
American Express is currently under examination by the IRS for the years 2003
and 2004.

Credco
routinely assesses the likelihood of additional assessments in each of the
taxing jurisdictions and has established a liability for unrecognized tax
benefits that Credcos management believes to be adequate. Once established,
unrecognized tax benefits are adjusted if more accurate information is
available, or a change in circumstance, or an event occurs necessitating a
change to the liability. Credco believes that it is reasonably possible that
the unrecognized tax benefit will significantly increase or decrease within the
next twelve months. Due to the inherent complexities and the number of tax
years open for examination in multiple jurisdictions, it is not possible to
quantify the impact such changes may have on the effective tax rate and net
income.

The components
of income tax expense included in Credcos Consolidated Statements of Income
and Shareholders Equity were as follows:

|                                            |  |          |      |          |   |      |   |   |     |  
|------------------------------------------- |  | -------- | ---- | -------- | - | ---- | - | - | --- | -
|(Millions)                                  |  | 2008     |      | 2007     |   | 2006 |  
|                                           
|                                            |  | Restated |      | Restated |   |      |   |  
|                                            |  |          |      |          |   |      |   |  
|Current income tax (benefit) expense:       |  |          |      |          |   |      |   |   |     |  
|U.S. federal                                |  | $        | (148 | )        | $ | 84   |   | $ | 94  |  
|U.S. state & local                          |  |          | 13   |          |   | 1    |   |   |    |  
|Non-U.S.                                    |  |          | 55   |          |   | 21   |   |   | 7   |  
|                                            |  |          |      |          |   |      |   |   |     |  
|Total current income tax (benefit) expense  |  |          | (80  | )        |   | 106  |   |   | 101 |  
|                                            |  |          |      |          |   |      |   |   |     |  
|Deferred income tax expense (benefit):      |  |          |      |          |   |      |   |   |     |  
|U.S. federal                                |  |          | 217  |          |   | (46  | ) |   | (6  | )
|Non-U.S.                                    |  |          | (5   | )        |   |     |   |   |    |  
|                                            |  |          |      |          |   |      |   |   |     |  
|Total deferred income tax expense (benefit) |  |          | 212  |          |   | (46  | ) |   | (6  | )
|                                            |  |          |      |          |   |      |   |   |     |  
|Total income tax expense                    |  | $        | 132  |          | $ | 60   |   | $ | 95  |  
|                                            |  |          |      |          |   |      |   |   |     |  

A
reconciliation of the U.S. federal statutory rate of 35 percent to Credcos
actual income tax rate for 2008, 2007 and 2006 was as follows:

|                                                        |  |      |          |      |          |       |   |  |       |  
|------------------------------------------------------- |  | ---- | -------- | ---- | -------- | ----- | - |  | ----- | -
|                                                        |  | 2008 |          | 2007 |          | 2006  |  
|                                                       
|                                                        |  |      | Restated |      | Restated |       |   | 
|                                                        |  |      |          |      |          |       |   |  |       |  
|Combined tax at U.S. statutory federal
 income tax rate |  |      | 35.0     | %    |          | 35.0  | % |  | 35.0  | %
|Increase/ (decrease) in taxes resulting
 from:          |  |      |          |      |          |       |   |  |       |  
|State and Local income taxes                            |  |      | 0.9      |      |          |      |   |  |      |  
|Non-U.S. subsidiaries earnings                          |  |      | (22.6    | )    |          | (27.4 | ) |  | (21.8 | )
|                                                        |  |      |          |      |          |       |   |  |       |  
|Actual tax rates                                        |  |      | 13.3     | %    |          | 7.6   | % |  | 13.2  | %
|                                                        |  |      |          |      |          |       |   |  |       |  

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The following
table presents changes in the unrecognized tax benefits:

|                                                         |  |      |    |      |   |    | 
|-------------------------------------------------------- |  | ---- | -- | ---- | - | -- | 
|(Millions)                                               |  | 2008 |    | 2007 |  
|                                                         |  |      |    |      |  
|Balance,
 January 1                                      |  | $    | 55 |      | $ | 44 | 
|Increases for tax positions related to the
 current year |  |      | 2  |      |   | 10 | 
|Increases for tax positions related to
 prior years      |  |      | 8  |      |   | 1  | 
|Decrease for tax positions related to prior
 years       |  |      | (2 | )    |   |   | 
|                                                         |  |      |    |      |   |    | 
|Balance,
 December 31                                    |  | $    | 63 |      | $ | 55 | 
|                                                         |  |      |    |      |   |    | 

Included in
the $63 million and $55 million of unrecognized tax benefits at December 31,
2008, and December 31, 2007, respectively, are approximately $53 million and
$49 million, respectively that, if recognized, would favorably affect the
effective tax rate in a future period. These benefits primarily relate to
Credcos gross permanent benefits and corresponding foreign tax credits and
federal tax effects.

Interest and
penalties relating to unrecognized tax benefits are reported in the income tax
provision. During the years ended December 31, 2008, and December 31, 2007,
Credco recognized approximately $6 million and $2 million, respectively of
interest and penalties. Credco has approximately $16 million and $10 million
accrued for the payment of interest and penalties at December 31, 2008, and
December 31, 2007, respectively.

Accumulated
earnings of certain non-U.S. subsidiaries, which totaled approximately $2.0
billion at December 31, 2008, are intended to be permanently reinvested outside
the United States. Accordingly, federal taxes, which would have aggregated
approximately $652 million, have not been provided on those earnings.

Credco records
a deferred income tax (benefit) provision when there are differences between
assets and liabilities measured for financial reporting and for income tax
return purposes.

The
significant components of deferred tax assets and liabilities at December 31,
are reflected in the following table:

|                                           |  |      |     |      |   |     | 
|------------------------------------------ |  | ---- | --- | ---- | - | --- | 
|(Millions)                                 |  | 2008 |     | 2007 |  
|                                           |  |      |     |      |  
|Deferred tax assets:                       |  |      |     |      |   |     | 
|Reserves not yet deducted for tax purposes |  | $    | 36  |      | $ | 287 | 
|Unremitted foreign earnings                |  |      | 26  |      |   |    | 
|Net unrealized derivatives losses          |  |      | 19  |      |   | 16  | 
|Foreign currency translation adjustments   |  |      | 13  |      |   |    | 
|State income taxes                         |  |      | 13  |      |   | 9   | 
|Other                                      |  |      | 1   |      |   |    | 
|                                           |  |      |     |      |   |     | 
|Gross deferred tax assets                  |  |      | 108 |      |   | 312 | 
|                                           |  |      |     |      |   |     | 
|Deferred tax liabilities:                  |  |      |     |      |   |     | 
|Net unrealized securities gains            |  |      | 15  |      |   | 15  | 
|Foreign currency translation adjustments   |  |      |    |      |   | 8   | 
|Other                                      |  |      |    |      |   | 8   | 
|                                           |  |      |     |      |   |     | 
|Gross deferred tax liabilities             |  |      | 15  |      |   | 31  | 
|                                           |  |      |     |      |   |     | 
|Net deferred tax assets                    |  | $    | 93  |      | $ | 281 | 
|                                           |  |      |     |      |   |     | 

Current
federal taxes due to/from affiliates included current federal taxes receivable
from TRS of $108 million at December 31, 2008, and current federal taxes
receivable of $3 million at December 31, 2007.

F-28

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Table of Contents

Income taxes
refunded to Credco during 2008, including taxes refunded by TRS, was $4
million. Income taxes paid by Credco during 2007, and 2006, including taxes
paid to TRS was $140 million and $139 million, respectively. These amounts
include estimated tax payments and cash settlements relating to prior tax
years.

Comprehensive
income in the Consolidated Statement of Shareholders Equity is presented net
of the following income tax provision (benefit) amounts:

|                                         |  |      |     |      |   |      |   |   |     |  
|---------------------------------------- |  | ---- | --- | ---- | - | ---- | - | - | --- | -
|Year ended
 December 31, (Millions)      |  | 2008 |     | 2007 |   | 2006 |  
|                                         |  |      |     |      |   |      |  
|Comprehensive
 income components:        |  |      |     |      |   |      |   |   |     |  
|Net unrealized securities gains          |  | $    |    |      | $ | 12   |   | $ | 11  |  
|Net unrealized derivative gains (losses) |  |      | (3  | )    |   | (21  | ) |   | (26 | )
|Foreign currency translation gains       |  |      | (21 | )    |   | 5    |   |   | 2   |  
|Other                                    |  |      |    |      |   | 1    |   |   | 1   |  
|                                         |  |      |     |      |   |      |   |   |     |  
|Net income
 tax provision (benefit)      |  | $    | (24 | )    | $ | (3   | ) | $ | (12 | )
|                                         |  |      |     |      |   |      |   |   |     |  

Note 14 Geographic
Regions

Credco is
principally engaged in the business of purchasing and financing cardmember
receivables and loans arising from the use of the American Express card in the
United States and foreign locations. The following presents Credcos revenues
and pretax income in different geographic regions:

|               |  |          |   |          |  |      |  |   |       |  |  |   |       | 
|-------------- |  | -------- | - | -------- |  | ---- |  | - | ----- |  |  | - | ----- | 
|(Millions)     |  | 2008     |   | 2007     |  | 2006 | 
|               |  |          |   |          |  |      | 
|               |  | Restated |   | Restated |  |      |  |  
|               |  |          |   |          |  |      |  |  
|Revenues       |  |          |   |          |  |      |  |   |       |  |  |   |       | 
|United States  |  |          | $ | 2,136    |  |      |  | $ | 2,749 |  |  | $ | 2,140 | 
|International  |  |          |   | 1,297    |  |      |  |   | 1,121 |  |  |   | 877   | 
|               |  |          |   |          |  |      |  |   |       |  |  |   |       | 
|Consolidated   |  |          | $ | 3,433    |  |      |  | $ | 3,870 |  |  | $ | 3,017 | 
|               |  |          |   |          |  |      |  |   |       |  |  |   |       | 
|Pretax
 income |  |          |   |          |  |      |  |   |       |  |  |   |       | 
|United States  |  |          | $ | 560      |  |      |  | $ | 610   |  |  | $ | 607   | 
|International  |  |          |   | 436      |  |      |  |   | 175   |  |  |   | 110   | 
|               |  |          |   |          |  |      |  |   |       |  |  |   |       | 
|Consolidated   |  |          | $ | 996      |  |      |  | $ | 785   |  |  | $ | 717   | 
|               |  |          |   |          |  |      |  |   |       |  |  |   |       | 

Note 15 Quarterly
Financial Data (Unaudited)

|                            |  |                 |   |                |  |                |  |                |     |                 |  |                |   |     |      |  |  |      |     |  |  |  |   |       |  |  |  |   |     |  |  |   |     |  |   |     | 
|--------------------------- |  | --------------- | - | -------------- |  | -------------- |  | -------------- | --- | --------------- |  | -------------- | - | --- | ---- |  |  | ---- | --- |  |  |  | - | ----- |  |  |  | - | --- |  |  | - | --- |  | - | --- | 
|                            |  | 2008            |   | 2007           | 
|                            |  |                 |   |                | 
|Quarters
 Ended, (Millions) |  | 12/31
 Restated |   | 9/30
 Restated |  | 6/30
 Restated |  | 3/31
 Restated |     | 12/31
 Restated |  | 9/30
 Restated |   |     | 6/30 |  |  | 3/31 |    
|                            |  |                 |   |                |  |                |  |                |     |                 |  |                |   |     |      |  |  |      |    
|Revenues                    |  |                 | $ | 742            |  |                |  | $              | 890 |                 |  |                | $ | 872 |      |  |  | $    | 929 |  |  |  | $ | 1,065 |  |  |  | $ | 989 |  |  | $ | 923 |  | $ | 893 | 
|Pretax
 income              |  |                 |   | 284            |  |                |  |                | 242 |                 |  |                |   | 301 |      |  |  |      | 169 |  |  |  |   | 155   |  |  |  |   | 208 |  |  |   | 227 |  |   | 195 | 
|Net income                  |  |                 |   | 239            |  |                |  |                | 216 |                 |  |                |   | 257 |      |  |  |      | 152 |  |  |  |   | 163   |  |  |  |   | 189 |  |  |   | 201 |  |   | 172 | 
|                            |  |                 |   |                |  |                |  |                |     |                 |  |                |   |     |      |  |  |      |     |  |  |  |   |       |  |  |  |   |     |  |  |   |     |  |   |     | 

F-29

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The following
tables set forth Credcos Consolidated Statements of Income quarterly financial
data for 2008 and 2007, including the effects of the restatement described in
Note 1. No restatement adjustments were required for the three months and six
months ended June 30, 2007 or the three months ended March 31, 2007.

CONSOLIDATED
STATEMENTS OF INCOME

|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|------------------------------------------------------------------------ |  | ----------------------------------- | - | ----------------------------------- | - | -------------------- |  | -------- | --- |  |  |  | - | ----- | - |  |  | - | ----- | - | 
|                                                                         |  | Three Months EndedDecember 31, 2008 |   | Three Months EndedDecember 31, 2007 |  
|                                                                         |  |                                     |   |                                     |  
|(Millions)                                                               |  | AsPreviouslyReported                |   | Restated                            |   | AsPreviouslyReported |  | Restated |    
|                                                                         |  |                                     |   |                                     |   |                      |  |          |    
|                                                                         |  |                                     |   |                                     |   |                      |  |          |    
|Revenues                                                                 |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|Discount revenue earned from purchased cardmember receivables and
 loans |  |                                     | $ | 373                                 |   |                      |  | $        | 373 |  |  |  | $ | 785   |   |  |  | $ | 785   |   | 
|Interest income from affiliates                                          |  |                                     |   | 161                                 |   |                      |  |          | 161 |  |  |  |   | 179   |   |  |  |   | 179   |   | 
|Interest income from investments                                         |  |                                     |   | 28                                  |   |                      |  |          | 28  |  |  |  |   | 75    |   |  |  |   | 75    |   | 
|Finance revenue                                                          |  |                                     |   | 17                                  |   |                      |  |          | 17  |  |  |  |   | 15    |   |  |  |   | 15    |   | 
|Other                                                                    |  |                                     |   | 27                                  |   |                      |  |          | 163 |  |  |  |   |      |   |  |  |   | 11    |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|Total revenues                                                           |  |                                     |   | 606                                 |   |                      |  |          | 742 |  |  |  |   | 1,054 |   |  |  |   | 1,065 |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|Expenses                                                                 |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|Provisions for losses, net of recoveries                                 |  |                                     |   | 93                                  |   |                      |  |          | 93  |  |  |  |   | 334   |   |  |  |   | 334   |   | 
|Interest expense                                                         |  |                                     |   | 302                                 |   |                      |  |          | 302 |  |  |  |   | 415   |   |  |  |   | 415   |   | 
|Interest expense to affiliates                                           |  |                                     |   | 40                                  |   |                      |  |          | 40  |  |  |  |   | 109   |   |  |  |   | 109   |   | 
|Service fees to affiliates                                               |  |                                     |   | 21                                  |   |                      |  |          | 21  |  |  |  |   | 51    |   |  |  |   | 51    |   | 
|Other                                                                    |  |                                     |   | 2                                   |   |                      |  |          | 2   |  |  |  |   | 1     |   |  |  |   | 1     |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|Total expenses                                                           |  |                                     |   | 458                                 |   |                      |  |          | 458 |  |  |  |   | 910   |   |  |  |   | 910   |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|Pretax income                                                            |  |                                     |   | 148                                 |   |                      |  |          | 284 |  |  |  |   | 144   |   |  |  |   | 155   |   | 
|Income tax (benefit) provision                                           |  |                                     |   | (1                                  | ) |                      |  |          | 45  |  |  |  |   | (12   | ) |  |  |   | (8    | ) | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 
|Net income                                                               |  |                                     | $ | 149                                 |   |                      |  | $        | 239 |  |  |  | $ | 156   |   |  |  | $ | 163   |   | 
|                                                                         |  |                                     |   |                                     |   |                      |  |          |     |  |  |  |   |       |   |  |  |   |       |   | 

F-30

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Table of Contents

CONSOLIDATED STATEMENTS OF INCOME

|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|------------------------------------------------------------------------ |  | -------------------------------------- | --- | -------------------------------------- | - | ------------------------------------- |  | ------------------------------------- | --- | ------------------------ | - | -------- |  | ------------------------ | ----- | -------- | - | ----- |  | - | ----- |  | - | ----- | 
|                                                                         |  | Three Months Ended
 September 30, 2008 |     | Three Months Ended
 September 30, 2007 |   | Nine Months Ended
 September 30, 2008 |  | Nine Months Ended
 September 30, 2007 |    
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |    
|(Millions)                                                               |  | As
 Previously
 Reported               |     | Restated                               |   | As
 Previously
 Reported              |  | Restated                              |     | As
 Previously
 Reported |   | Restated |  | As
 Previously
 Reported |       | Restated |  
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |  
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |  
|Revenues                                                                 |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|Discount revenue earned from purchased
 cardmember receivables and loans |  | $                                      | 569 |                                        | $ | 569                                   |  | $                                     | 735 |                          | $ | 735      |  | $                        | 1,818 |          | $ | 1,818 |  | $ | 2,088 |  | $ | 2,088 | 
|Interest income from affiliates                                          |  |                                        | 201 |                                        |   | 201                                   |  |                                       | 168 |                          |   | 168      |  |                          | 583   |          |   | 583   |  |   | 471   |  |   | 471   | 
|Interest income from investments                                         |  |                                        | 76  |                                        |   | 76                                    |  |                                       | 73  |                          |   | 73       |  |                          | 219   |          |   | 219   |  |   | 203   |  |   | 203   | 
|Finance revenue                                                          |  |                                        | 14  |                                        |   | 14                                    |  |                                       | 13  |                          |   | 13       |  |                          | 31    |          |   | 31    |  |   | 38    |  |   | 38    | 
|Other                                                                    |  |                                        | (11 | )                                      |   | 30                                    |  |                                       | 3   |                          |   |         |  |                          | (7    | )        |   | 40    |  |   | 8     |  |   | 5     | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |  
|Total
     revenues                                                      |  |                                        | 849 |                                        |   | 890                                   |  |                                       | 992 |                          |   | 989      |  |                          | 2,644 |          |   | 2,691 |  |   | 2,808 |  |   | 2,805 | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |  
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|Expenses                                                                 |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|Provisions for losses, net of recoveries                                 |  |                                        | 192 |                                        |   | 192                                   |  |                                       | 194 |                          |   | 194      |  |                          | 548   |          |   | 548   |  |   | 508   |  |   | 508   | 
|Interest expense                                                         |  |                                        | 345 |                                        |   | 345                                   |  |                                       | 426 |                          |   | 426      |  |                          | 1,061 |          |   | 1,061 |  |   | 1,197 |  |   | 1,197 | 
|Interest expense to affiliates                                           |  |                                        | 60  |                                        |   | 60                                    |  |                                       | 110 |                          |   | 110      |  |                          | 215   |          |   | 215   |  |   | 325   |  |   | 325   | 
|Service fees to affiliates                                               |  |                                        | 50  |                                        |   | 50                                    |  |                                       | 49  |                          |   | 49       |  |                          | 152   |          |   | 152   |  |   | 141   |  |   | 141   | 
|Other                                                                    |  |                                        | 1   |                                        |   | 1                                     |  |                                       | 2   |                          |   | 2        |  |                          | 3     |          |   | 3     |  |   | 4     |  |   | 4     | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|Total expenses                                                           |  |                                        | 648 |                                        |   | 648                                   |  |                                       | 781 |                          |   | 781      |  |                          | 1,979 |          |   | 1,979 |  |   | 2,175 |  |   | 2,175 | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|Pretax income                                                            |  |                                        | 201 |                                        |   | 242                                   |  |                                       | 211 |                          |   | 208      |  |                          | 665   |          |   | 712   |  |   | 633   |  |   | 630   | 
|Income tax provision                                                     |  |                                        | 12  |                                        |   | 26                                    |  |                                       | 20  |                          |   | 19       |  |                          | 69    |          |   | 87    |  |   | 69    |  |   | 68    | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 
|Net income                                                               |  | $                                      | 189 |                                        | $ | 216                                   |  | $                                     | 191 |                          | $ | 189      |  | $                        | 596   |          | $ | 625   |  | $ | 564   |  | $ | 562   | 
|                                                                         |  |                                        |     |                                        |   |                                       |  |                                       |     |                          |   |          |  |                          |       |          |   |       |  |   |       |  |   |       | 

F-31

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Table of Contents

CONSOLIDATED STATEMENTS OF INCOME

|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|------------------------------------------------------------------------ |  | --------------------------------- | --- | ------------------------------- | - | ------------------------ |  | -------- | ----- |  | - | ----- | 
|                                                                         |  | Three Months Ended
 June 30, 2008 |     | Six Months Ended
 June 30, 2008 |  
|                                                                         |  |                                   |     |                                 |  
|(Millions)                                                               |  | As
 Previously
 Reported          |     | Restated                        |   | As
 Previously
 Reported |  | Restated |      
|                                                                         |  |                                   |     |                                 |   |                          |  |          |      
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Revenues                                                                 |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Discount revenue earned from purchased
 cardmember receivables and loans |  | $                                 | 595 |                                 | $ | 595                      |  | $        | 1,249 |  | $ | 1,249 | 
|Interest income from affiliates                                          |  |                                   | 194 |                                 |   | 194                      |  |          | 382   |  |   | 382   | 
|Interest income from investments                                         |  |                                   | 71  |                                 |   | 71                       |  |          | 143   |  |   | 143   | 
|Finance revenue                                                          |  |                                   | 2   |                                 |   | 2                        |  |          | 17    |  |   | 17    | 
|Other                                                                    |  |                                   | 3   |                                 |   | 10                       |  |          | 4     |  |   | 10    | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Total revenues                                                           |  |                                   | 865 |                                 |   | 872                      |  |          | 1,795 |  |   | 1,801 | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Expenses                                                                 |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Provisions for losses, net of recoveries                                 |  |                                   | 108 |                                 |   | 108                      |  |          | 356   |  |   | 356   | 
|Interest expense                                                         |  |                                   | 339 |                                 |   | 339                      |  |          | 716   |  |   | 716   | 
|Interest expense to affiliates                                           |  |                                   | 72  |                                 |   | 72                       |  |          | 155   |  |   | 155   | 
|Service fees to affiliates                                               |  |                                   | 51  |                                 |   | 51                       |  |          | 102   |  |   | 102   | 
|Other                                                                    |  |                                   | 1   |                                 |   | 1                        |  |          | 2     |  |   | 2     | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Total expenses                                                           |  |                                   | 571 |                                 |   | 571                      |  |          | 1,331 |  |   | 1,331 | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Pretax income                                                            |  |                                   | 294 |                                 |   | 301                      |  |          | 464   |  |   | 470   | 
|Income tax provision                                                     |  |                                   | 41  |                                 |   | 44                       |  |          | 57    |  |   | 61    | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 
|Net income                                                               |  | $                                 | 253 |                                 | $ | 257                      |  | $        | 407   |  | $ | 409   | 
|                                                                         |  |                                   |     |                                 |   |                          |  |          |       |  |   |       | 

F-32

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Table of Contents

|                                                                         |  |                                    |     |          |   |     | 
|------------------------------------------------------------------------ |  | ---------------------------------- | --- | -------- | - | --- | 
|CONSOLIDATED STATEMENT OF INCOME                                        
|                                                                         |  |                                    |    
|                                                                         |  | Three Months Ended
 March 31, 2008 |    
|                                                                         |  |                                    |    
|(Millions)                                                               |  | As
Previously
Reported             |     | Restated |  
|                                                                         |  |                                    |     |          |  
|                                                                         |  |                                    |     |          |   |     | 
|Revenues                                                                 |  |                                    |     |          |   |     | 
|                                                                         |  |                                    |     |          |   |     | 
|Discount revenue earned from purchased cardmember receivables and
 loans |  | $                                  | 654 |          | $ | 654 | 
|Interest income from affiliates                                          |  |                                    | 188 |          |   | 188 | 
|Interest income from investments                                         |  |                                    | 72  |          |   | 72  | 
|Finance revenue                                                          |  |                                    | 15  |          |   | 15  | 
|Other                                                                    |  |                                    | 1   |          |   |    | 
|                                                                         |  |                                    |     |          |   |     | 
|Total revenues                                                           |  |                                    | 930 |          |   | 929 | 
|                                                                         |  |                                    |     |          |   |     | 
|                                                                         |  |                                    |     |          |   |     | 
|Expenses                                                                 |  |                                    |     |          |   |     | 
|                                                                         |  |                                    |     |          |   |     | 
|Provisions for losses, net of recoveries                                 |  |                                    | 248 |          |   | 248 | 
|Interest expense                                                         |  |                                    | 377 |          |   | 377 | 
|Interest expense to affiliates                                           |  |                                    | 83  |          |   | 83  | 
|Service fees to affiliates                                               |  |                                    | 51  |          |   | 51  | 
|Other                                                                    |  |                                    | 1   |          |   | 1   | 
|                                                                         |  |                                    |     |          |   |     | 
|Total expenses                                                           |  |                                    | 760 |          |   | 760 | 
|                                                                         |  |                                    |     |          |   |     | 
|                                                                         |  |                                    |     |          |   |     | 
|Pretax income                                                            |  |                                    | 170 |          |   | 169 | 
|                                                                         |  |                                    |     |          |   |     | 
|Income tax provision                                                     |  |                                    | 16  |          |   | 17  | 
|                                                                         |  |                                    |     |          |   |     | 
|Net income                                                               |  | $                                  | 154 |          | $ | 152 | 
|                                                                         |  |                                    |     |          |   |     | 

F-33

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Table of Contents

The following tables set
forth Credcos Consolidated Balance Sheets quarterly financial data for
2008 and 2007, including the effects of the restatement described in Note 1.

CONSOLIDATED BALANCE SHEETS

|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|---------------------------------------------------------- |  | -------------------- | ------ | ------------------ | - | -------------------- | - | -------- | ------ | - | - | ------ | -
|                                                           |  | September 30, 2008   |        | September 30, 2007 |  
|                                                           |  |                      |        |                    |  
|(Millions)                                                 |  | AsPreviouslyReported |        | Restated           |   | AsPreviouslyReported |   | Restated |       
|                                                           |  |                      |        |                    |   |                      |   |          |       
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Assets                                                     |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Cash and cash equivalents                                  |  | $                    | 4,789  |                    | $ | 4,789                |   | $        | 2,917  |   | $ | 2,917  |  
|Cardmember receivables, less reserves                      |  |                      | 22,170 |                    |   | 21,955               |   |          | 26,109 |   |   | 26,023 |  
|Cardmember loans, less reserves                            |  |                      | 444    |                    |   | 444                  |   |          | 371    |   |   | 371    |  
|Loans to affiliates                                        |  |                      | 11,269 |                    |   | 11,269               |   |          | 10,959 |   |   | 10,959 |  
|Investment securities                                      |  |                      | 2,127  |                    |   | 2,127                |   |          | 2,029  |   |   | 2,029  |  
|Investment securities restricted                           |  |                      | 899    |                    |   | 899                  |   |          | 999    |   |   | 999    |  
|Deferred charges and other assets                          |  |                      | 832    |                    |   | 832                  |   |          | 372    |   |   | 372    |  
|Due from affiliates                                        |  |                      | 2,418  |                    |   | 2,633                |   |          | 1,314  |   |   | 1,400  |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Total assets                                               |  | $                    | 44,948 |                    | $ | 44,948               |   | $        | 45,070 |   | $ | 45,070 |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Liabilities and Shareholders Equity                       |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Short-term debt                                            |  | $                    | 9,388  |                    | $ | 9,388                |   | $        | 9,225  |   | $ | 9,225  |  
|Short-term debt to affiliates                              |  |                      | 8,692  |                    |   | 8,692                |   |          | 8,741  |   |   | 8,741  |  
|Current portion of long-term debt                          |  |                      | 6,229  |                    |   | 6,229                |   |          |       |   |   |       |  
|Long-term debt                                             |  |                      | 16,444 |                    |   | 16,444               |   |          | 23,108 |   |   | 23,108 |  
|Total debt                                                 |  |                      | 40,753 |                    |   | 40,753               |   |          | 41,074 |   |   | 41,074 |  
|Accrued interest and other liabilities                     |  |                      | 555    |                    |   | 575                  |   |          | 383    |   |   | 382    |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Total liabilities                                          |  |                      | 41,308 |                    |   | 41,328               |   |          | 41,457 |   |   | 41,456 |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Shareholders Equity                                       |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Common stock                                               |  |                      | 1      |                    |   | 1                    |   |          | 1      |   |   | 1      |  
|Capital surplus                                            |  |                      | 161    |                    |   | 161                  |   |          | 161    |   |   | 161    |  
|Retained earnings                                          |  |                      | 3,493  |                    |   | 3,527                |   |          | 3,301  |   |   | 3,299  |  
|Accumulated other comprehensive income (loss), net of tax: |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Net unrealized securities
 gains, net of tax               |  |                      | 15     |                    |   | 15                   |   |          | 16     |   |   | 16     |  
|Net unrealized derivatives
 losses, net of tax             |  |                      | (14    | )                  |   | (14                  | ) |          | (3     | ) |   | (3     | )
|Foreign currency translation
 adjustments, net of tax      |  |                      | (16    | )                  |   | (70                  | ) |          | 137    |   |   | 140    |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Total accumulated other comprehensive (loss) income        |  |                      | (15    | )                  |   | (69                  | ) |          | 150    |   |   | 153    |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Total shareholders equity                                 |  |                      | 3,640  |                    |   | 3,620                |   |          | 3,613  |   |   | 3,614  |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  
|Total liabilities and shareholders equity                 |  | $                    | 44,948 |                    | $ | 44,948               |   | $        | 45,070 |   | $ | 45,070 |  
|                                                           |  |                      |        |                    |   |                      |   |          |        |   |   |        |  

F-34

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Table of Contents

CONSOLIDATED
BALANCE SHEETS

|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|---------------------------------------------------------- |  | -------------------- | ------ | ------------- | - | -------------------- | - | -------- | ------ | - | - | ------ | -
|                                                           |  | June 30, 2008        |        | June 30, 2007 |  
|                                                           |  |                      |        |               |  
|(Millions)                                                 |  | AsPreviouslyReported |        | Restated      |   | AsPreviouslyReported |   | Restated |       
|                                                           |  |                      |        |               |   |                      |   |          |       
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Assets                                                     |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Cash and cash equivalents                                  |  | $                    | 5,049  |               | $ | 5,049                |   | $        | 1,922  |   | $ | 1,922  |  
|Cardmember receivables, less reserves                      |  |                      | 24,525 |               |   | 24,362               |   |          | 26,827 |   |   | 26,750 |  
|Cardmember loans, less reserves                            |  |                      | 377    |               |   | 377                  |   |          | 357    |   |   | 357    |  
|Loans to affiliates                                        |  |                      | 11,640 |               |   | 11,640               |   |          | 10,178 |   |   | 10,178 |  
|Investment securities                                      |  |                      | 2,574  |               |   | 2,574                |   |          | 1,789  |   |   | 1,789  |  
|Investment securities restricted                           |  |                      | 467    |               |   | 467                  |   |          | 1,211  |   |   | 1,211  |  
|Deferred charges and other assets                          |  |                      | 441    |               |   | 441                  |   |          | 343    |   |   | 343    |  
|Due from affiliates                                        |  |                      | 1,927  |               |   | 2,090                |   |          | 103    |   |   | 180    |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Total assets                                               |  | $                    | 47,000 |               | $ | 47,000               |   | $        | 42,730 |   | $ | 42,730 |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Liabilities and Shareholders Equity                       |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Short-term debt                                            |  | $                    | 12,768 |               | $ | 12,768               |   | $        | 8,001  |   | $ | 8,001  |  
|Short-term debt to affiliates                              |  |                      | 8,139  |               |   | 8,139                |   |          | 7,941  |   |   | 7,941  |  
|Current portion of long-term debt                          |  |                      | 5,539  |               |   | 5,539                |   |          |       |   |   |       |  
|Long-term debt                                             |  |                      | 16,323 |               |   | 16,323               |   |          | 22,819 |   |   | 22,819 |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Total debt                                                 |  |                      | 42,769 |               |   | 42,769               |   |          | 38,761 |   |   | 38,761 |  
|Accrued interest and other liabilities                     |  |                      | 539    |               |   | 545                  |   |          | 427    |   |   | 427    |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Total liabilities                                          |  |                      | 43,308 |               |   | 43,314               |   |          | 39,188 |   |   | 39,188 |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Shareholders Equity                                       |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Common stock                                               |  |                      | 1      |               |   | 1                    |   |          | 1      |   |   | 1      |  
|Capital surplus                                            |  |                      | 161    |               |   | 161                  |   |          | 161    |   |   | 161    |  
|Retained earnings                                          |  |                      | 3,354  |               |   | 3,361                |   |          | 3,260  |   |   | 3,260  |  
|Accumulated other comprehensive income (loss), net of tax: |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Net unrealized securities gains, net of tax                |  |                      | 30     |               |   | 30                   |   |          | (3     | ) |   | (3     | )
|Net unrealized derivatives losses, net of tax              |  |                      | (37    | )             |   | (37                  | ) |          | 22     |   |   | 22     |  
|Foreign currency translation adjustments, net of tax       |  |                      | 183    |               |   | 170                  |   |          | 101    |   |   | 101    |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Total
     accumulated other comprehensive income          |  |                      | 176    |               |   | 163                  |   |          | 120    |   |   | 120    |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Total shareholders equity                                 |  |                      | 3,692  |               |   | 3,686                |   |          | 3,542  |   |   | 3,542  |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  
|Total liabilities and shareholders equity                 |  | $                    | 47,000 |               | $ | 47,000               |   | $        | 42,730 |   | $ | 42,730 |  
|                                                           |  |                      |        |               |   |                      |   |          |        |   |   |        |  

F-35

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Table of Contents

CONSOLIDATED
BALANCE SHEETS

|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|---------------------------------------------------------- |  | -------------------- | ------ | --------------- | - | -------------------- | - | -------- | ------ | - | - | ------ | -
|                                                           |  | March 31,
 2008      |        | March 31,
 2007 |  
|                                                           |  |                      |        |                 |  
|(Millions)                                                 |  | AsPreviouslyReported |        | Restated        |   | AsPreviouslyReported |   | Restated |       
|                                                           |  |                      |        |                 |   |                      |   |          |       
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Assets                                                     |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Cash and cash equivalents                                  |  | $                    | 7,548  |                 | $ | 7,548                |   | $        | 2,214  |   | $ | 2,214  |  
|Cardmember receivables, less reserves                      |  |                      | 23,705 |                 |   | 23,597               |   |          | 24,749 |   |   | 24,682 |  
|Cardmember loans, less reserves                            |  |                      | 398    |                 |   | 398                  |   |          | 354    |   |   | 354    |  
|Loans to affiliates                                        |  |                      | 11,633 |                 |   | 11,633               |   |          | 9,602  |   |   | 9,602  |  
|Investment securities                                      |  |                      | 2,098  |                 |   | 2,098                |   |          | 2,257  |   |   | 2,257  |  
|Investment securities restricted                           |  |                      | 984    |                 |   | 984                  |   |          | 759    |   |   | 759    |  
|Deferred charges and other assets                          |  |                      | 475    |                 |   | 475                  |   |          | 360    |   |   | 360    |  
|Due from affiliates                                        |  |                      | 4,123  |                 |   | 4,231                |   |          |       |   |   | 67     |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Total assets                                               |  | $                    | 50,964 |                 | $ | 50,964               |   | $        | 40,295 |   | $ | 40,295 |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Liabilities and Shareholders Equity                       |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Short-term debt                                            |  | $                    | 14,639 |                 | $ | 14,639               |   | $        | 5,710  |   | $ | 5,710  |  
|Short-term debt to affiliates                              |  |                      | 11,887 |                 |   | 11,887               |   |          | 7,788  |   |   | 7,788  |  
|Current portion of long-term debt                          |  |                      | 6,081  |                 |   | 6,081                |   |          |       |   |   |       |  
|Long-term debt                                             |  |                      | 14,301 |                 |   | 14,301               |   |          | 22,472 |   |   | 22,472 |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Total debt                                                 |  |                      | 46,908 |                 |   | 46,908               |   |          | 35,970 |   |   | 35,970 |  
|Due to affiliates                                          |  |                      |       |                 |   |                     |   |          | 474    |   |   | 474    |  
|Accrued interest and other liabilities                     |  |                      | 568    |                 |   | 570                  |   |          | 413    |   |   | 413    |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Total liabilities                                          |  |                      | 47,476 |                 |   | 47,478               |   |          | 36,857 |   |   | 36,857 |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Shareholders Equity                                       |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Common stock                                               |  |                      | 1      |                 |   | 1                    |   |          | 1      |   |   | 1      |  
|Capital surplus                                            |  |                      | 161    |                 |   | 161                  |   |          | 161    |   |   | 161    |  
|Retained earnings                                          |  |                      | 3,186  |                 |   | 3,189                |   |          | 3,209  |   |   | 3,209  |  
|Accumulated other comprehensive income (loss), net of tax: |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Net unrealized securities gains, net of tax                |  |                      | 54     |                 |   | 54                   |   |          | 6      |   |   | 6      |  
|Net unrealized derivatives losses, net of tax              |  |                      | (76    | )               |   | (76                  | ) |          | 6      |   |   | 6      |  
|Foreign currency translation adjustments, net of tax       |  |                      | 162    |                 |   | 157                  |   |          | 57     |   |   | 57     |  
|Other                                                      |  |                      |       |                 |   |                     |   |          | (2     | ) |   | (2     | )
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Total
    accumulated other comprehensive income           |  |                      | 140    |                 |   | 135                  |   |          | 67     |   |   | 67     |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Total shareholders equity                                 |  |                      | 3,488  |                 |   | 3,486                |   |          | 3,438  |   |   | 3,438  |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  
|Total liabilities and shareholders equity                 |  | $                    | 50,964 |                 | $ | 50,964               |   | $        | 40,295 |   | $ | 40,295 |  
|                                                           |  |                      |        |                 |   |                      |   |          |        |   |   |        |  

F-36

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EXHIBIT INDEX

Pursuant
to Item 601 of Regulation S-K

| |             |  |                                                                       |  |                                                                                                                                                          
| | ----------- |  | --------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibit No. |  | Description                                                           |  |                                                                                                                                                          
| |             |  |                                                                       |  |                                                                                                                                                          
| | 3(a)        |  | Registrants
 Certificate of Incorporation, as
 amended               |  | Incorporated
 by reference to Exhibit 3(a) to Registrants Registration Statement on Form
 S-1 dated February 25, 1972 (File No. 2-43170).               
| |             |  |                                                                       |  |                                                                                                                                                          
| | 3(b)        |  | Registrants
 By-Laws, amended and restated as of November 24, 1980   |  | Incorporated
 by reference to Exhibit 3(b) to Registrants Annual Report on Form 10-K
 (Commission File No. 1-6908) for the year ended December 31, 1985.
| |             |  |                                                                       |  |                                                                                                                                                          
| | 4(a)        |  | Registrants
 Debt Securities Indenture dated as of September 1, 1987 |  | Incorporated
 by reference to Exhibit 4(s) to Registrants Registration Statement on Form
 S-3 dated September 2, 1987 (File No. 33-16874).              
| |             |  |                                                                       |  |                                                                                                                                                          
| | 4(b)        |  | Registrants
 Debt Securities Indenture dated as of June 1, 2006      |  | Incorporated
 by reference to Exhibit 4(a) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).                 
| |             |  |                                                                       |  |                                                                                                                                                          
| | 4(c)        |  | Form of
 Supplemental Indenture providing for an additional Trustee   |  | Incorporated
 by reference to Exhibit 4(b) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).                 
| |             |  |                                                                       |  |                                                                                                                                                          
| | 4(d)        |  | Form of Note
 with optional redemption provisions                     |  | Incorporated
 by reference to Exhibit 4(c) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).                 

E-1

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| |      |  |                                                                               |  |                                                                                                                                         
| | ---- |  | ----------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
| | 4(e) |  | Form of Note
 with optional redemption and sinking fund provisions            |  | Incorporated
 by reference to Exhibit 4(d) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).
| |      |  |                                                                               |  |                                                                                                                                         
| | 4(f) |  | Form of
 Original Issue Discount Note with optional redemption provisions     |  | Incorporated
 by reference to Exhibit 4(e) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).
| |      |  |                                                                               |  |                                                                                                                                         
| | 4(g) |  | Form of Zero
 Coupon Note with optional redemption provisions                 |  | Incorporated
 by reference to Exhibit 4(f) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).
| |      |  |                                                                               |  |                                                                                                                                         
| | 4(h) |  | Form of
 Variable Rate Note with optional redemption and repayment provisions |  | Incorporated
 by reference to Exhibit 4(g) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).
| |      |  |                                                                               |  |                                                                                                                                         
| | 4(i) |  | Form of
 Extendible Note with optional redemption and repayment provisions    |  | Incorporated
 by reference to Exhibit 4(h) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).
| |      |  |                                                                               |  |                                                                                                                                         
| | 4(j) |  | Form of
 Fixed Rate Note                                                      |  | Incorporated
 by reference to Exhibit 4(i) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).
| |      |  |                                                                               |  |                                                                                                                                         
| | 4(k) |  | Form of
 Floating Rate Note                                                   |  | Incorporated
 by reference to Exhibit 4(j) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).

E-2

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| |      |  |                                                                                  |  |                                                                                                                                                          
| | ---- |  | -------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4(l) |  | Form of
 Warrant Agreement                                                       |  | Incorporated
 by reference to Exhibit 4(k) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).                 
| |      |  |                                                                                  |  |                                                                                                                                                          
| | 4(m) |  | Terms and
 conditions of debt instruments to be issued outside the United States |  | Incorporated
 by reference to Exhibit 4(l) to Registrants Annual Report on Form 10-K
 (Commission File No. 1-6908) for the year ended December 31, 1997.
| |      |  |                                                                                  |  |                                                                                                                                                          
| | 4(n) |  | Form of
 Permanent Global Fixed Rate Senior Note, Series B                       |  | Incorporated
 by reference to Exhibit 4(s) to Registrants Current Report on Form 8-K
 (Commission File No. 1-6908) dated December 21, 2001.             
| |      |  |                                                                                  |  |                                                                                                                                                          
| | 4(o) |  | Form of
 Permanent Global Floating Rate Senior Note, Series B                    |  | Incorporated
 by reference to Exhibit 4(t) to Registrants Current Report on Form 8-K
 (Commission File No. 1-6908) dated December 21, 2001.             
| |      |  |                                                                                  |  |                                                                                                                                                          
| | 4(p) |  | Form of
 Senior Floating Rate Note Extendible Liquidity Securitiesâ
 (EXLsâ)     |  | Incorporated
 by reference to Exhibit 4(u) to Registrants Current Report on Form 8-K
 (Commission File No. 1-6908) dated February 6, 2003.              
| |      |  |                                                                                  |  |                                                                                                                                                          
| | 4(q) |  | Form of
 Global Fixed Rate Note                                                  |  | Incorporated
 by reference to Exhibit 4(v) to Registrants Current Report on Form 8-K
 (Commission File No. 1-6908) dated May 14, 2003.                  
| |      |  |                                                                                  |  |                                                                                                                                                          
| | 4(r) |  | Form of
 Global LIBOR Floating Rate Note                                         |  | Incorporated
 by reference to Exhibit 4(w) to Registrants Current Report on Form 8-K
 (Commission File No. 1-6908) dated May 14, 2003.                  

E-3

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| |      |  |                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                          
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4(s) |  | Form of
 extendible monthly securities                                                                                                                                                                                                                                                                                    |  | Incorporated
 by reference to Exhibit 4(n) to Registrants Current Report on Form 8-K
 (Commission File No. 1-6908) dated June 22, 2006.                 
| |      |  |                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                          
| | 4(t) |  | Form of
 Permanent Global Registered Fixed Rate Senior Note, Series C                                                                                                                                                                                                                                                     |  | Incorporated
 by reference to Exhibit 4(l) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).                 
| |      |  |                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                          
| | 4(u) |  | Form of
 Permanent Global Registered Floating Rate Senior Note, Series C                                                                                                                                                                                                                                                  |  | Incorporated
 by reference to Exhibit 4(m) to Registrants Registration Statement on Form
 S-3 dated June 8, 2006 (File No. 333-134864).                 
| |      |  |                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                          
| | 4(v) |  | Conditions
 of Notes to be issued outside the United States under the Registrants
 Australian Debt Issuance Program                                                                                                                                                                                                      |  | Incorporated
 by reference to Exhibit 4(v) to Registrants Annual Report on Form 10-K
 (Commission File No. 1-6908) for the year ended December 31, 2006.
| |      |  |                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                          
| | 4(w) |  | Form of
 Medium-Term Note  Master Note relating to the Registrants InterNotes® program                                                                                                                                                                                                                                  |  | Incorporated
 by reference to Exhibit 4 to Registrants Current Report on Form 8-K
 (Commission File No. 1-6908) dated August 25, 2008.                  
| |      |  |                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                          
| | 4(x) |  | The
 Registrant hereby agrees to furnish the Commission, upon request, with copies
 of the instruments defining the rights of holders of each issue of long-term
 debt of the Registrant for which the total amount of securities authorized
 thereunder does not exceed 10 percent of the total assets of the Registrant |  |                                                                                                                                                          

E-4

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| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10(a) |  | Receivables
 Agreement dated as of January 1, 1983 between the Registrant and American
 Express Travel Related Services Company, Inc.                                               |  | Incorporated
 by reference to Exhibit 10(b) to Registrants Annual Report on Form 10-K
 (Commission File No. 1-6908) for the year ended December 31, 1987.      
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 10(b) |  | Amended and
 Restated Agreement for Sale and Purchase of Receivables dated as of October
 30, 2008 between American Express Centurion Bank and American Express Credit
 Corporation |  | Incorporated by reference
 to Exhibit 10.1 to Registrants Quarterly Report on Form 10-Q (Commission File
 No. 1-6908) for the quarter ended September 30, 2008.
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 10(c) |  | Amended and Restated
 Agreement for Sale and Purchase of Receivables dated as of October 30, 2008
 between American Express Bank, FSB and American Express Credit Corporation       |  | Incorporated by reference
 to Exhibit 10.2 to Registrants Quarterly Report on Form 10-Q (Commission
 File No. 1-6908) for the quarter ended September 30, 2008.
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 12.1  |  | Computation
 in Support of Ratio of Earnings to Fixed Charges of American Express Credit
 Corporation                                                                               |  | Electronically
 filed herewith.                                                                                                                                 
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 12.2  |  | Computation
 in Support of Ratio of Earnings to Fixed Charges of American Express Company                                                                                           |  | Electronically
 filed herewith.                                                                                                                                 
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 23.1  |  | Consent of
 PricewaterhouseCoopers LLP Independent Registered Public Accounting Firm                                                                                                |  | Electronically
 filed herewith.                                                                                                                                 
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 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.                                                                                                                                 
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 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.                                                                                                                                 
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 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.                                                                                                                                 
| |       |  |                                                                                                                                                                                     |  |                                                                                                                                                                 
| | 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.                                                                                                                                 

E-5

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