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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington,
D.C. 20549




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, 2006ORo TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934For 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) 
  Registrants telephone number including area code: (302) 594-3350. | (Zip
  Code) | 

Securities registered pursuant to
Section 12 (b) of the Act:

|                                            |  |                           | 
|------------------------------------------- |  | ------------------------- | 
|                                            |  | Name of
  each exchange   | 
|Title of
  each class                       |  | on which
  registered     | 
|                                            |  |                           | 
|Floating Rate Medium-Term
  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 or any amendment to this Form 10-K. x

Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer or a
non-accelerated filer. See definition of accelerated filer and large
accelerated filer in Rule 12b-2 of the Exchange Act. Large
accelerated fileroAccelerated fileroNon-accelerated filerx

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

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, 2007, 1,054,938 shares were outstanding.

Documents
incorporated by reference: None

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PART I

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

Introduction

American Express Credit Corporation (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.

Credco is primarily engaged in the business of
financing most 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 and extended
payment plan receivables comprised of American Express credit cards, Sign &
Travel® and Extended Payment Option receivables
and lines of credit and loans to American Express Bank Ltd. (AEB) customers, although cardmember 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 cards are currently issued in over 40
currencies (including cards issued by third-party banks and other qualified
institutions). The card, which is issued to individual consumers for their
personal account or through a corporate account established by their employer
for its business purposes, permits cardmembers to charge purchases of goods or
services in the United States and in most countries around the world at service
establishments that have agreed to accept the card. As a merchant processor,
TRS accepts and processes from each participating establishment the charges
arising from cardmember purchases at a discount that is principally determined
by the value that is delivered to the service establishment and generally
includes a premium over other card networks. Value is delivered to the service
establishment through higher spending cardmembers relative to competing card
networks, the volume of spending by all cardmembers, marketing programs and the
insistence of cardmembers to use their cards when enrolled in rewards or other
card loyalty programs. 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 account history, credit record and personal
resources. Charge cards generally require payment by the cardmember of the full
amount billed each month, and no finance charges are assessed. 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. 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 regulation 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:

|  |                                                                                                                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the Equal Credit Opportunity Act (which generally
  prohibits discrimination in the granting and handling of credit);                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                        
| | the Fair Credit Reporting Act and the Fair and
  Accurate Credit Transactions 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);
|  |                                                                                                                                                                                                                                                                                        

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|  |                                                                                                                                                                                                                                                                                                                                                      
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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); and                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                      
| | the Electronic Funds Transfer Act (which regulates
  disclosures and settlement of transactions for electronic funds transfers
  including those at ATMs).                                                                                                                                                                                           

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 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 written-off as uncollectible. Card issuers and card networks
are subject to anti-money laundering and anti-terrorism legislation, including,
in the United States, the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA
PATRIOT Act).

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.

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, which include extended payment plan
receivables, 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 extended payment plan
receivables comprised of American Express credit card, Sign & Travel®
and Extended Payment Option receivables and lines of credit and loans to AEB
customers.

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 Germany, 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

2

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strategies result in Credco
recording additional loans with affiliates. Beginning in 2007, Credco started a
similar funding strategy in Mexico.

Beginning in May 2005, 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.

Prior to May 2005, CRC
purchased such interests from American Express Receivables Financing
Corporation LLC (RFC), which was consolidated by TRS and dissolved in the third
quarter of 2005. The interests purchased represented undivided interests in
cardmember receivables transferred to the American Express Master Trust (AEMT)
by TRS. TRS and its subsidiaries  originated the receivables. Prior to dissolution, AEMT was also a
non-qualifying special purpose entity that was consolidated by TRS.

A subsidiary of TRS, as agent for Credco, 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 the 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 that 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.

Volume of Business

The following table shows the volume of all cardmember
receivables and cardmember loans purchased by Credco, excluding cardmember
receivables and cardmember loans sold to affiliates, 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 |      
|     |  |                                                                                      |   |                                               |  |       |  |          |      |         |  |       |      
|2006 |  |                                                                                      | $ | 251.5                                         |  |       |  | $        | 29.5 |         |  | $     | 281.0 |  |  | $ | 25.0 |  | 
|2005 |  |                                                                                      |   | 233.0                                         |  |       |  |          | 26.9 |         |  |       | 259.9 |  |  |   | 21.9 |  | 
|2004 |  |                                                                                      |   | 188.8                                         |  |       |  |          | 51.3 |         |  |       | 240.1 |  |  |   | 19.7 |  | 
|2003 |  |                                                                                      |   | 153.2                                         |  |       |  |          | 56.1 |         |  |       | 209.3 |  |  |   | 17.8 |  | 
|2002 |  |                                                                                      |   | 137.2                                         |  |       |  |          | 46.9 |         |  |       | 184.1 |  |  |   | 15.2 |  | 

The card business does not experience significant
seasonal fluctuation, although card billed business tends to be moderately
higher in the fourth quarter than in other quarters.

Cardmember Receivables

At December 31, 2006 and 2005, Credco owned $27.6
billion and $24.4 billion, respectively, of cardmember receivables and participation
interests in cardmember receivables, representing 99 percent and 98 percent of
the total cardmember receivables and loans owned at December 31, 2006 and 2005,
respectively. Cardmember receivables represent amounts due from charge card
customers and are recorded at the time a

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transaction is submitted by the merchant and captured
by American Express. As previously noted, CRC purchases the participation interests from RFC V in conjunction
with TRS securitization program. During the period from May 1, 2005
through December 31, 2005, RFC V participated to CRC undivided interests
totaling $8.5 billion. Prior to May
2005, CRC purchased such interests from RFC. At December 31, 2006 and 2005, CRC
owned approximately $8.2 billion and $8.6 billion, respectively, of
participation interests purchased from RFC V.

|                                                        |  |      |        |      |   |        |   |   |        |  
|------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|Years ended December 31, (Millions, except percentages) |  | 2006 |        | 2005 |   | 2004   |  
|                                                        |  |      |        |      |   |        |  
|Total cardmember receivables                            |  | $    | 27,593 |      | $ | 24,421 |   | $ | 21,888 |  
|90 days past due as a % of total                        |  |      | 2.1    | %    |   | 1.7    | % |   | 2.1    | %
|Loss reserves                                           |  | $    | 739    |      | $ | 671    |   | $ | 555    |  
|as a % of
  receivables                                 |  |      | 2.7    | %    |   | 2.7    | % |   | 2.5    | %
|as a % of 90 days
  past due                            |  |      | 128    | %    |   | 159    | % |   | 122    | %
|Write-offs, net of recoveries                           |  | $    | 525    |      | $ | 579    |   | $ | 471    |  
|Net write-off rate (1)                                  |  |      | 0.19   | %    |   | 0.22   | % |   | 0.20   | %
|Average life of cardmember receivables (in days) (2)    |  |      | 32     |      |   | 32     |   |   | 32     |  
|                                                        |  |      |        |      |   |        |   |   |        |  

(2) 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.

Cardmember receivables
increased $3.2 billion from December 31, 2005, as a result of higher consumer,
small business and corporate cardmember receivables purchased during 2006. The
cardmember receivables purchased during 2006 increased approximately 8 percent
from the cardmember receivables purchased during 2005, due to overall business
growth.

Cardmember Loans

At December 31, 2006 and 2005, Credco owned cardmember
loans totaling $0.3 billion and $0.6 billion, respectively, representing 1
percent and 2 percent of the total cardmember receivables and loans owned by
Credco at December 31, 2006 and 2005, respectively. These loans consist of
certain interest-bearing and discounted extended payment plan receivables
comprised principally of American Express credit card, Sign & Travel and
Extended Payment Option receivables, and lines of credit and loans to AEB
customers. At December 31, 2006 and 2005, CRC did not own any participation
interests in cardmember loans.

|                                                        |  |      |      |      |   |      |   |   |      |  
|------------------------------------------------------- |  | ---- | ---- | ---- | - | ---- | - | - | ---- | -
|Years ended December 31, (Millions, except percentages) |  | 2006 |      | 2005 |   | 2004 |  
|                                                        |  |      |      |      |   |      |  
|Total cardmember loans                                  |  | $    | 356  |      | $ | 569  |   | $ | 622  |  
|Past due cardmember loans as a % of total:              |  |      |      |      |   |      |   |   |      |  
|30-89 days                                              |  |      | 5.9  | %    |   | 4.9  | % |   | 6.3  | %
|90+ days                                                |  |      | 2.1  | %    |   | 1.4  | % |   | 1.9  | %
|Loss reserves                                           |  | $    | 10   |      | $ | 15   |   | $ | 55   |  
|as a % of
  cardmember loans                            |  |      | 2.8  | %    |   | 2.6  | % |   | 8.9  | %
|as a % of past
  due                                    |  |      | 35   | %    |   | 41   | % |   | 108  | %
|Write-offs, net of recoveries                           |  | $    | 8    |      | $ | 21   |   | $ | 183  |  
|Net write-off rate (1)                                  |  |      | 2.02 | %    |   | 3.57 | % |   | 4.40 | %
|                                                        |  |      |      |      |   |      |   |   |      |  

The year-over-year decrease in Credcos owned cardmember loans was
primarily driven by Credcos sale of certain Hong Kong, New Zealand and United
States loan portfolios.

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Loans with Affiliates

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

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

|                                           |  |      |       |      |   |       | 
|------------------------------------------ |  | ---- | ----- | ---- | - | ----- | 
|(Millions)                                 |  | 2006 |       | 2005 |  
|                                           |  |      |       |      |  
|TRS Parent                                 |  | $    | 531   |      | $ | 750   | 
|TRS Subsidiaries:                          |  |      |       |      |   |       | 
|American Express
  Services Europe Limited |  |      | 3,360 |      |   | 2,799 | 
|American Express
  Australia Limited       |  |      | 3,529 |      |   | 2,489 | 
|Amex Bank of
  Canada                      |  |      | 2,166 |      |   | 1,797 | 
|American Express
  International, Inc.     |  |      | 105   |      |   | 419   | 
|                                           |  |      |       |      |   |       | 
|Total                                      |  | $    | 9,691 |      | $ | 8,254 | 
|                                           |  |      |       |      |   |       | 

On February 9, 2007, the
loan with TRS Parent of $531 million was repaid.

Sources of Funds

Credcos business is financed by short-term borrowings,
consisting principally of commercial paper, borrowings under bank lines of
credit and issuances of U.S. and non-U.S. dollar medium- and long-term debt, as
well as through operations. 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 |  
|     |  |                                    |  
|2006 |  | 4.63                               | % | 
|2005 |  | 3.63                               | % | 
|2004 |  | 2.98                               | % | 
|2003 |  | 3.46                               | % | 
|2002 |  | 3.96                               | % | 

See Notes 4 and 5 to the Consolidated Financial
Statements for additional information about Credcos debt, including Credcos
lines of credit and long-term debt.

Foreign Operations

See Notes 1, 7 and 13 to the Consolidated Financial
Statements for information about Credcos foreign exchange translation and
operations in different geographic regions.

Employees

At December 31, 2006, Credco had 23 employees.

5

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

This section highlights
specific risks that could affect Credco and its businesses. You should
carefully consider each of the following risks and all of the other information
set forth in this Annual Report on Form 10-K. Based on the information
currently known to Credco, we believe that the following information identifies
the most significant risk factors affecting Credco. However, the risks and
uncertainties Credco faces are not limited to those described below. Additional
risks and uncertainties not presently known to us or that we currently believe
to be immaterial may also adversely affect Credcos business.

If any of the following
risks and uncertainties develops into actual events or the circumstances
described in the risks and uncertainties occur, these events or circumstances
could have a material adverse effect on Credcos business, financial condition
or results of operations. These events could also have a negative effect on the
trading price of Credcos securities.

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

Credco and the Card Issuers
must effectively manage credit risk related to consumer debt, business loans,
merchant bankruptcies and other credit trends and the rate of bankruptcies,
which can affect spending on card products, debt payments by individual and
corporate customers and businesses that accept the Card Issuers products.
Credit risk is the risk of loss from obligor or counterparty default. Credco
and the Card Issuers are exposed to both consumer credit risk, principally from
Cardmember receivables, and institutional credit risk, primarily through TRScorporate card, large establishment services and network services businesses.
While consumer credit risk is more closely linked to general economic
conditions rather than borrower-specific events like institutional credit risk,
both expose Credco and the Card Issuers to the risk of loss. Third parties may
default on their obligations to Credco due to bankruptcy, lack of liquidity,
operational failure or other reasons. Country, regional and political risks are
components of credit risk. Although Credco and the Card Issuers make estimates
to provide for credit losses in their respective outstanding portfolios of
loans and receivables, these estimates may not be accurate. In addition, the
information that Credco and the Card Issuers use in managing credit risk may be
inaccurate or incomplete. Although Credco and the Card Issuers regularly review
their credit exposures to specific clients and counterparties and to specific
industries, countries and regions that they 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 their
customers.

Credco must also effectively
manage market risk to which it is exposed. Market risk represents the loss in
value of portfolios and financial instruments due to adverse changes in market
variables. Credco is exposed to market risk from both interest rates from the
Card business and foreign exchange risk from its international operations.
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.

Finally, the Card Issuers
must also manage the operational risks to which they are exposed. The Card
Issuers consider operational risk to be the risk of not achieving their
respective business objectives due to failed processes, people or information
systems, or from the external environment, such as natural disasters.
Operational risks include the risk that they may not accurately estimate the
provision expense for the cost of the Membership Rewards program, as well as the risk
that they are unable to manage a downturn in their respective businesses and/or
negative changes in ratings, which could result in contingent payments under
contracts, decreased liquidity and higher borrowing costs.

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, their
hedging strategies and other risk management techniques may not be fully
effective in mitigating risk exposures in all market environments or against
all types of risk, including risks that are unidentified or unanticipated. See
Item 7A Quantitative and Qualitative Disclosures about Market Risk for a
discussion of the policies and procedures Credco uses to

6

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identify, monitor and manage risks. 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
is exposed to risks associated with fluctuations in foreign currency exchange
rates and foreign exchange controls.

Credco generates a portion
of its activities from outside the United States, including by financing card
receivables and loan receivables denominated in currencies other than the U.S.
dollar. Revenues generated outside the United States or denominated in
currencies other than the U.S. dollar are subject to unpredictable and
indeterminate fluctuations in the values of other currencies relative to the
U.S. dollar. Credcos risk management activities provide protection with
respect to adverse changes in the value of only a limited number of currencies.
Furthermore, Credco or the Card Issuers may become subject to exchange control
regulations that might restrict or prohibit the conversion of their other
revenue currencies into U.S. dollars. The occurrence of any of these factors
could decrease revenues received from international operations and have a
material adverse impact on their respective businesses.

Credcos access to financing may be limited.

In general, the amount, type
and cost of Credcos funding, including financing from other financial
institutions and the capital markets, directly impacts its expense in operating
its business and therefore can positively or negatively affect Credcos
financial results. A number of factors could make such financing more
difficult, more expensive or unavailable on any terms both domestically and
internationally (where funding transactions may be on terms more or less
favorable than in the United States), including, but not limited to, financial
results and losses, specific events that adversely affect Credcos or the Card
Issuers reputations, changes in the activities of the Card Issuers business
partners, disruptions in the capital markets, specific events that adversely
impact the financial services industry, counter-party availability, changes
affecting Credcos assets, Credcos corporate and regulatory structure,
interest rate fluctuations, rating agencies action, general economic
conditions and the legal, regulatory, accounting and tax environments governing
Credcos funding transactions. In addition, Credcos ability to raise funds is
strongly affected by the general state of the United States and world
economies, and may become increasingly difficult due to economic or other
factors. Also, Credco competes for funding with other financial institutions,
some of which are publicly funded. Competition from these institutions may
increase Credcos cost of funds.

Existing
and proposed regulation in the areas of consumer privacy and data use and
security could decrease the number of charge and credit cards issued and could
increase costs.

The Card Issuers are subject
to regulations related to privacy and data use and security in the
jurisdictions in which they do business, and they could be negatively impacted
by these regulations. For example, in the United States, TRS, American Express
Centurion Bank (Centurion Bank) and American Express Bank, FSB are subject to
the Federal Trade Commissions information safeguards rule under the
Gramm-Leach-Bliley Act. The rule requires that each financial institution develop,
implement and maintain a written, comprehensive information security program
containing safeguards that are appropriate to the financial institutions size
and complexity, the nature and scope of the financial institutions activities,
and the sensitivity of any customer information at issue. The heightened
legislative and regulatory focus on data security, including requiring consumer
notification in the event of a data breach continues. In the United States,
there are a number of bills pending in Congress and there have been several
Congressional hearings to address these issues. Congress will likely consider
data security/data breach legislation in 2007 that, if implemented, could
affect the Card Issuers.

In addition, a number of
states have enacted security breach legislation, requiring varying levels of
consumer notification in the event of a security breach, and several other
states are considering similar legislation. In

7

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Europe, the European
Parliament and Council passed European Directive 95/46/EC on the protection of
individuals with regard to the processing of personal data and on the free
movement of such data (commonly referred to as the Data Protection Directive),
which obligates the controller of an individuals personal data to take the
necessary technical and organizational measures to protect personal data. The
Data Protection Directive has been implemented through local laws regulating
data protection in European Union member states to which certain Card Issuers
are subject. Regulation of privacy and data use and security in these and other
jurisdictions may increase costs for issuing charge and credit cards, which may
decrease the number of cards issued. Any additional regulations in these areas
may also increase costs to comply with such regulations, which could materially
and adversely affect profitability. Finally, failure to comply with the privacy
and data use and security laws and regulations to which the Card Issuers are
subject could result in fines, sanctions or other penalties, which could
materially and adversely affect their respective results of operations and
overall businesses.

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.

Forward-looking Statements

Various
statements have been made in this 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 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. We caution you that the risk factors
described above and below are not exclusive. 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 and the rate of bankruptcies, which can affect spending on card
  products and debt payments by individual and corporate customers;
| |   |                                                                                                                                                    
| |  | Credcos
  ability to accurately estimate the provision 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;                             
| |   |                                                                                                                                                    
| |  | the effect
  of fluctuating interest rates, which could affect Credcos borrowing costs;
  and                                                     
| |   |                                                                                                                                                    
| |  | the impact
  on American Express Companys business resulting from continuing geopolitical
  uncertainty.                                          

8

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

None.

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

Credco neither
owns nor leases any material physical properties.

|        |                   
|------- | ------------------
|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.

9

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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 $500 million and $200 million to TRS in 2006 and 2005,
respectively. On February 9, 2007, Credco paid a cash dividend of $150 million
to TRS. For information about limitations on Credcos ability to pay dividends,
see Note 6 to the Consolidated Financial Statements.

10

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|          |                           
|--------- | --------------------------
|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)                                 |  | 2006 |        | 2005 |   | 2004   |  | 2003 |        | 2002 |  
|                                           |  |      |        |      |   |        |  |      |        |      |  
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Income
  Statement Data                    |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Revenues                                   |  | $    | 3,017  |      | $ | 2,276  |  | $    | 1,832  |      | $ | 1,987  |  | $ | 2,153  | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Provision for losses, net of recoveries    |  |      | 589    |      |   | 662    |  |      | 628    |      |   | 701    |  |   | 846    | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Interest expense                           |  |      | 1,614  |      |   | 1,141  |  |      | 863    |      |   | 852    |  |   | 916    | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Income tax provision                       |  |      | 95     |      |   | 50     |  |      | 75     |      |   | 135    |  |   | 118    | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Net income                                 |  |      | 622    |      |   | 415    |  |      | 234    |      |   | 260    |  |   | 228    | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Balance
  Sheet Data                       |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Gross cardmember receivables               |  | $    | 27,593 |      | $ | 24,421 |  | $    | 21,888 |      | $ | 21,165 |  | $ | 17,169 | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Reserve for losses, cardmember receivables |  |      | 739    |      |   | 671    |  |      | 555    |      |   | 555    |  |   | 498    | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Gross cardmember loans                     |  |      | 356    |      |   | 569    |  |      | 622    |      |   | 5,067  |  |   | 4,858  | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Reserve for losses, cardmember loans       |  |      | 10     |      |   | 15     |  |      | 55     |      |   | 182    |  |   | 243    | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Loans with affiliates                      |  |      | 9,691  |      |   | 8,254  |  |      | 7,039  |      |   | 1,923  |  |   | 2,047  | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Total assets                               |  |      | 40,966 |      |   | 37,369 |  |      | 36,260 |      |   | 31,949 |  |   | 27,665 | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Short-term debt                            |  |      | 15,469 |      |   | 15,982 |  |      | 13,245 |      |   | 15,718 |  |   | 15,145 | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Current portion of long-term debt          |  |      | 3,440  |      |   | 2,300  |  |      | 5,734  |      |   | 1,978  |  |   | 5,751  | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Long-term debt                             |  |      | 18,350 |      |   | 14,629 |  |      | 12,880 |      |   | 10,216 |  |   | 2,117  | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Shareholders equity                       |  |      | 3,422  |      |   | 3,271  |  |      | 2,993  |      |   | 2,750  |  |   | 2,315  | 
|                                           |  |      |        |      |   |        |  |      |        |      |   |        |  |   |        | 
|Cash dividends                             |  |      | 500    |      |   | 200    |  |      | 125    |      |   |       |  |   |       | 

11

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

Critical Accounting Policies

American Express Credit Corporations (Credco)
significant accounting policies are described in Note 1 to the Consolidated
Financial Statements. The following provides information about critical
accounting policies that are important to the Consolidated Financial Statements
and that involve estimates requiring significant management assumptions and
judgments about the effect of matters that are uncertain. These policies relate
to reserves for cardmember losses.

Reserves
for cardmember losses

Credcos reserves for losses relating to cardmember
receivables and loans represent managements estimate of the losses inherent in
Credcos outstanding portfolio of loans and receivables. Managements
evaluation process requires certain estimates and judgments. Reserves for these
losses are primarily based upon models that analyze several 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 (loan balances
are written-off when 180 days past due), and average bankruptcy and recovery
rates. Also, to a lesser extent, these reserves reflect managements judgment
regarding overall reserve adequacy. Management considers whether to adjust
reserves that are calculated by the analytic models based on other factors,
such as the level of coverage of past-due accounts, as well as leading economic
and market indicators, such as the unemployment rate, the consumer confidence
index, the purchasing managers index, bankruptcy filings and the legal and
regulatory environment.

Receivables and loans are written-off when management
deems amounts to be uncollectible, and is generally determined by the number of
days past due. In general, receivables and loans in bankruptcy or owed by
deceased individuals are written-off upon notification, or 180 days past due
for lending products and 360 days past due for charge card products. To the
extent historical credit experience is not indicative of future performance,
actual loss experience 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, 2006, if average write-off rates were
five percent higher or lower, the reserve for losses would change by
approximately $37 million.

Consolidated Capital Resources and Liquidity

Credco is committed to
maintaining cost-effective, well-diversified funding programs to support
current and future asset growth in its global businesses. Credcos funding plan
is structured to meet expected and changing business needs to fund asset
balances efficiently and cost-effectively. Credco relies on diverse sources, to
help ensure the availability of financing in unexpected periods of stress and to
manage interest rate exposures. In addition to the funding plan described
below, Credco has a contingent funding strategy to allow for the continued
funding of business operations through difficult economic, financial market and
business conditions when access to regular funding sources could become
diminished or interrupted.

Financing
Activities

Credcos funding requirements are met primarily by the
sale of commercial paper, the issuance of medium- and long-term notes,
borrowings under long-term bank credit facilities in certain international
markets and equity capital. 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 2006, Credco had uninterrupted
access to the commercial paper and capital markets to fund its business
operations.

12

---



The commercial paper market represents the primary
source of short-term funding for Credco. Credcos commercial paper is a widely
recognized name among short-term investors. At December 31, 2006, Credco had $5.8 billion
of commercial paper outstanding. The outstanding amount decreased $1.9 billion
or 25 percent from a year ago. Average commercial paper outstanding was $7.8
billion and $8.1 billion in 2006 and 2005, respectively. Credco currently
manages the level of short-term debt outstanding such that its total back-up
liquidity, including 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, which
consists of commercial paper and certain other short-term borrowings less cash
and cash equivalents, was $5.1 billion at December 31, 2006. Based on the maximum available borrowings
under bank credit facilities and term liquidity portfolio investment
securities, Credcos total back-up liquidity coverage of net short-term debt
was 212 percent at December 31,
2006.

Medium- and long-term debt is raised through the
offering of debt securities in the United States and international capital
markets. Medium-term debt is generally defined as any debt with an
original maturity greater than 12 months but less than 36 months. Long-term
debt is generally defined as any debt with an original maturity greater
than 36 months.

Credco had the following medium- and long-term debt
outstanding at December 31:

|                    |  |      |      |      |   |      | 
|------------------- |  | ---- | ---- | ---- | - | ---- | 
|(Billions)          |  | 2006 |      | 2005 |  
|                    |  |      |      |      |   |      | 
|                   
|Medium-term debt(a) |  | $    | 12.4 |      | $ | 8.6  | 
|Long-term debt      |  |      | 9.4  |      |   | 8.3  | 
|                    |  |      |      |      |   |      | 
|Total               |  | $    | 21.8 |      | $ | 16.9 | 
|                    |  |      |      |      |   |      | 

|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|(a) | A portion of which can be
  extended by the holders up to an additional five years.

During 2006 and 2005, Credcos average medium- and
long-term debt outstanding was $19.2 billion and $16.5 billion, respectively.

In 2006, United States and international fixed and
floating rate medium- and long-term debt in an aggregate principal amount of
$8.4 billion with maturities ranging from two to five years was issued.

Credco, TRS, AEOCC, Centurion Bank, a wholly-owned
subsidiary of TRS, and American Express Bank Ltd., a wholly-owned subsidiary of
American Express, have established a program for the issuance, outside the
U.S., of debt instruments to be listed on the Luxembourg Stock Exchange. As of
December 31, 2006, the maximum aggregate principal amount of debt instruments
outstanding at any one time under the program may not exceed $10.0 billion. The
proceeds of these issuances were used for financing operations, including the
purchase of receivables and the repayment of previously issued debt. At
December 31, 2006, $4.5 billion was outstanding under this program, of which
$3.2 billion were issued by Credco.

During 2005, Credco received
regulatory approval in Canada for a base shelf prospectus for a medium-term
note program providing for the issuance from time to time, in Canada, of up to
approximately $3.0 billion of notes by American Express Canada Credit
Corporation, a wholly-owned subsidiary of Credco, which notes would be
guaranteed by Credco. During 2006, Credco issued and sold approximately $900
million of fixed medium-term notes due between 2008 and 2011 and approximately
$400 million floating medium-term notes due 2008. At December 31, 2006,
approximately $2.0 billion of debt
securities was outstanding under this program.

During the fourth quarter of 2006, Credco established
a program for the issuance from time to time, in Australia, of up to
approximately $4.6 billion and issued approximately $118 million of fixed rate
notes due in 2011 and approximately $236 million of floating rate notes due in
2011. At December 31, 2006,

13

---



approximately $4.3 billion was available for issuance
under this program. Proceeds of the notes were used to repay a portion of the
Australian credit facility.

Credco also has the ability to issue debt securities
under shelf registrations filed with the Securities and Exchange Commission
(SEC). During the second quarter of 2006, Credco filed a shelf registration
statement with the SEC for an unspecified amount of debt securities to be issued
from time to time. At December 31, 2006, Credco had $13.4 billion of debt
securities outstanding, issued under SEC registration statements.

Credco continues to issue
long-term debt with a wide range of maturities to diversify the refinancing
requirement in future periods.

Credcos funding strategy is designed to maintain high
and stable debt ratings from the major credit rating agencies, Moodys,
Standard & Poors and Fitch Ratings. Maintenance of high and stable debt
ratings is critical to ensuring Credcos continuous access to the capital and
credit markets. It also enables Credco to reduce its overall borrowing costs.
At December 31, 2006, Credcos debt ratings were as follows:

|                 |  |         |  |                    |  |              
|---------------- |  | ------- |  | ------------------ |  | -------------
|                 |  | Moodys |  | Standard 
& Poors |  | Fitch Ratings
|                 |  |         |  |                    |  |              
|Short-term       |  | P-1     |  | A-1                |  | F1           
|Senior unsecured |  | Aa3     |  | A+                 |  | A+           
|                 |  |         |  |                    |  |              

Rating agencies review factors such as capital
adequacy with a view towards maintaining certain levels of capital, liquidity,
business volumes, asset quality and economic market trends, among others, in
assessing Credcos and its subsidiaries appropriate ratings.

Credco actively manages the risk of liquidity and cost
of funds resulting from Credcos financing activities. Management believes a
decline in Credcos long-term credit rating by two levels could result in Credco
having to significantly reduce its commercial paper and other short-term
borrowings. Remaining borrowing requirements would be addressed through other
means such as the issuance of long-term debt and the sale of investment
securities or drawing on existing credit lines. This would result in higher
interest expense on Credcos commercial paper and other debt, as well as higher
fees related to unused lines of credit. Credco believes a two level downgrade
is highly unlikely due to its capital position and growth prospects.

Credco paid cash dividends of $500 million and $200
million to TRS in 2006 and 2005, respectively. On February 9, 2007, Credco paid
a cash dividend of $150 million to TRS.

Liquidity

Credco balances the trade-offs between having 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. Credco considers various factors in determining its
liquidity needs, such as economic and financial market conditions,
seasonality in business operations, cost and availability of alternative
liquidity sources, and credit rating agency considerations. In 2006, short-term debt as a percentage of
total debt decreased to 42 percent at December 31, 2006, from 49 percent at
December 31, 2005.

Credco estimates it will have funding requirements of
approximately $3.4 billion within the next year related to the maturity of
medium- and long-term debt obligations. Credco believes that its funding plan
is adequate to meet these requirements. In addition, alternative liquidity
sources are available, mainly in the form of the liquidity portfolio,
securitization of cardmember receivables and loans through American Express
affiliates, and bank credit facilities, to provide uninterrupted funding over a
twelve-month period should access to unsecured debt sources become impaired.

14

---



Credco has
developed a contingent funding plan that enables it to meet its daily funding
obligations when access to unsecured funds in the debt capital markets is
impaired or unavailable. This plan is designed to ensure that Credco could
continuously maintain normal business operations for a twelve-month period in
which its access to unsecured funds is interrupted. From time to time, Credco
may increase its liquidity portfolio in order to prefund maturing debt
obligations when financial market conditions are favorable. These levels are
monitored and adjusted when necessary to maintain short-term liquidity needs in
response to seasonal or changing business conditions.

The funding
sources that would be relied upon depend on the exact nature of such a hypothetical
liquidity crisis; nonetheless, Credcos liquidity sources are designed with the
goal of ensuring there is sufficient cash on hand to fund business operations
over a twelve-month period regardless of whether the liquidity crisis was
caused by an external, industry or Credco-specific event. The contingent
funding plan also addresses operating flexibilities in quickly making these
funding sources available to meet all financial obligations. The simulated
liquidity crisis is defined as a sudden and unexpected event that
temporarily impairs access to or makes unavailable funding in the unsecured
debt markets.

The contingent
funding plan includes access to diverse sources of alternative funding. Such
sources include but are not limited to its liquidity investment portfolio,
committed bank lines, intercompany borrowings and securitization of cardmember
receivables and loans through American Express affiliates. Credco estimates
that, under a worst case liquidity crisis scenario, it has identified up to
$8.3 billion in alternate funding sources available to cover cash needs over
the first 60 days after a liquidity crisis has occurred.

Liquidity Investment Portfolio

During the
normal course of business, funding activities may raise more proceeds than are
necessary for immediate funding needs. These amounts are invested principally
in short-term overnight, highly liquid securities. Credco also maintains a term
liquidity portfolio comprised of high credit quality, highly liquid securities.
At December 31, 2006, Credco held $3.0 billion of U.S. Treasury and government
agency securities in this portfolio. The invested amounts of the term liquidity
portfolio provide back-up liquidity, primarily for Credcos commercial paper
program. U.S. Treasury and government agency securities are the highest credit
quality and most liquid of investment instruments available. Credco can easily
sell these securities or enter into sale/repurchase agreements to immediately
raise cash proceeds to meet liquidity needs.

Credco entered
into securities lending agreements in June 2006 with other financial
institutions to enhance investment income. At December 31, 2006, the liquidity
investment portfolio included approximately $716 million of investment
securities loaned under these agreements. See Note 2 to the Consolidated
Financial Statements for further discussion regarding Credcos securities
lending program.

Other Investment Activities

At December
31, 2004, CRC invested $142 million and $56 million in Class B and C Notes,
respectively, issued by American Express Credit Account Master Trust, a
qualified special purpose entity. During 2005, $37 million of the Class C Notes and
$142 million of Class B Notes matured. At December 31, 2005, CRC had
approximately $19 million of Class C Notes remaining. During 2006, the
remaining $19 million of the Class C Notes matured.

Committed Bank Credit Facilities

Credco maintained committed
bank credit facilities with 38 large institutions totaling $10.8 billion
(including $1.2 billion available to American Express and the $3.3 billion
Australian credit facility) at December 31, 2006. Credco had $2.7 billion
outstanding under these facilities, related to the Australian credit facility.
These facilities expire as follows (billions): 2009, $3.3; 2010, $4.8; and 2011,
$2.7.

15

---



The availability of the
credit lines is subject to compliance with certain financial covenants by
Credco, including the maintenance of a 1.25 ratio of earnings to fixed charges.
The ratio of earnings to fixed charges for Credco was 1.44, 1.41 and
1.36 in 2006, 2005 and 2004, respectively. The ratio of earnings to fixed
charges for American Express for 2006, 2005 and 2004 was 2.80, 2.83 and 3.13,
respectively.

Committed bank
credit facilities do not contain material adverse change clauses, which may
preclude borrowing under the credit facilities. The facilities may not be
terminated should there be a change in Credcos credit rating.

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 total
discount to Credcos interest expense and the collectibility of cardmember
receivables and loans purchased.

Credcos
consolidated net income rose 50 percent to $622 million for the year ended
December 31, 2006, as compared to the year ended December 31, 2005. The
year-over-year increase was primarily due to the increase of discount revenue
earned on purchased cardmember receivables and loans and the interest income
from affiliates, offset by the increase of interest expense to affiliates and
others.

Discount Revenue Earned on Purchased
Cardmember Receivables and Loans

Discount revenue increased
32 percent or $543 million to $2.2 billion for the year ended December 31,
2006, as compared to the same period in 2005. The year-over-year increase was
primarily due to an increase in both volume of receivables purchased and
discount rates. Volume of receivables purchased for the year ended December 31,
2006, was 8 percent higher than the same period a year ago primarily due to an
increase in cardmember spending. Discount rates, which vary over time due to
changes in market interest rates or changes in the collectibility of cardmember
receivables, increased an average of approximately 14 basis points compared to
the year ended December 31, 2005.

Interest Income from Investments

Interest income from
investments increased 74 percent or $93 million to $218 million for the year
ended December 31, 2006, as compared to the same period in the prior year. The
year-over-year increase was due to a higher interest rate environment as well
as the replacement of matured U.S. Treasury securities primarily with higher
yielding government agency securities. The average rate on the total investment
portfolio increased 186 basis points for the year ended December 31, 2006,
compared to the year ended December 31, 2005.

Interest Income from Affiliates

Interest income from
affiliates increased 32 percent or $127 million to $523 million for the year
ended December 31, 2006, as compared to the year ended December 31, 2005. The
year-over-year increase was primarily due to an increase in the volume of loans
with affiliates. The average rate charged to affiliates during the year ended
December 31, 2006, was 49 basis points higher than the average rate charged to
affiliates in the same period a year ago, primarily due to the floating rate
interest-bearing borrowings with affiliates.

16

---



Provision for Losses, Net of Recoveries

The provision for losses,
net of recoveries decreased 11 percent or $73 million for the year ended
December 31, 2006, as compared to the year ended December 31, 2005. The
year-over-year decrease reflects a lower loss rate and improved results from
collection activities.

Interest Expense and Interest Expense to Affiliates

Interest expense and
interest expense to affiliates increased 36 percent and 68 percent,
respectively, for the year ended December 31, 2006, as compared to the same
period a year ago. The increase is primarily due to higher effective cost of
funds and higher debt funding levels. The average rate due to affiliates during
the year ended December 31, 2006, was 140 basis points higher than the same
period a year ago, primarily due to the fact that a high proportion of the interest-bearing
borrowings due to affiliates were at floating rate.

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

|                                                                         |  |      |      |      |   |      |  
|------------------------------------------------------------------------ |  | ---- | ---- | ---- | - | ---- | -
|(Millions)                                                               |  | 2006 |      | 2005 |  
|                                                                         |  |      |      |      |  
|Discount revenue earned on purchased
  cardmember receivables and loans: |  |      |      |      |   |      |  
|Volume of receivables purchased                                          |  | $    | 139  |      | $ | 148  |  
|Discount rates                                                           |  |      | 404  |      |   | 266  |  
|                                                                         |  |      |      |      |   |      |  
|Total                                                                    |  | $    | 543  |      | $ | 414  |  
|                                                                         |  |      |      |      |   |      |  
|Finance charge revenue:                                                  |  |      |      |      |   |      |  
|Volume of loans purchased                                                |  | $    | (17  | )    | $ | (292 | )
|Interest rates                                                           |  |      | (5   | )    |   | 22   |  
|                                                                         |  |      |      |      |   |      |  
|Total                                                                    |  | $    | (22  | )    | $ | (270 | )
|                                                                         |  |      |      |      |   |      |  
|Interest income from investments:                                        |  |      |      |      |   |      |  
|Average investments outstanding                                          |  | $    | (1   | )    | $ | (11  | )
|Interest rates                                                           |  |      | 94   |      |   | 32   |  
|                                                                         |  |      |      |      |   |      |  
|Total                                                                    |  | $    | 93   |      | $ | 21   |  
|                                                                         |  |      |      |      |   |      |  
|Interest income from affiliates:                                         |  |      |      |      |   |      |  
|Average loans with affiliates                                            |  | $    | 83   |      | $ | 164  |  
|Interest rates                                                           |  |      | 44   |      |   | 113  |  
|                                                                         |  |      |      |      |   |      |  
|Total                                                                    |  | $    | 127  |      | $ | 277  |  
|                                                                         |  |      |      |      |   |      |  
|Provision for losses, net of recoveries:                                 |  |      |      |      |   |      |  
|Volume of receivables purchased                                          |  | $    | 67   |      | $ | 66   |  
|Provision rates and volume of recoveries                                 |  |      | (140 | )    |   | (32  | )
|                                                                         |  |      |      |      |   |      |  
|Total                                                                    |  | $    | (73  | )    | $ | 34   |  
|                                                                         |  |      |      |      |   |      |  
|Interest expense:                                                        |  |      |      |      |   |      |  
|Average debt outstanding                                                 |  | $    | 94   |      | $ | 58   |  
|Interest rates                                                           |  |      | 244  |      |   | 127  |  
|                                                                         |  |      |      |      |   |      |  
|Total                                                                    |  | $    | 338  |      | $ | 185  |  
|                                                                         |  |      |      |      |   |      |  
|Interest expense to affiliates:                                          |  |      |      |      |   |      |  
|Average debt outstanding                                                 |  | $    | 28   |      | $ | 12   |  
|Interest rates                                                           |  |      | 107  |      |   | 81   |  
|                                                                         |  |      |      |      |   |      |  
|Total                                                                    |  | $    | 135  |      | $ | 93   |  
|                                                                         |  |      |      |      |   |      |  

17

---



Income Taxes

Credcos effective tax rate for
the years ended December 31, 2006, 2005 and 2004, was 13.2 percent, 10.8
percent and 24.3 percent, respectively. The effective tax rate was higher in 2006
compared to 2005 primarily as a result of a decrease in the proportion of
foreign subsidiary pretax income to total pretax income. The effective tax rate
was lower in 2005 as compared to 2004 primarily as a result of ongoing benefits
related to changes in international funding strategy during 2004. The shifts in
international funding strategy, which diversify funding sources and increase
liquidity, are expected also to benefit Credcos effective tax rate and net
income in future periods despite somewhat higher related funding costs.

18

---



|         |                                                            
|-------- | -----------------------------------------------------------
|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 three fundamental sources of risk: credit risk, market 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, 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, 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 a rigorous understanding of risks across American Express, including
Credco, and supports management in making risk-return decisions.

Credit Risk

Credit risk is defined as
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. Since such a portfolio consists of millions of borrowers and
individual exposures, 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 management. The American Express
Board approved policies related to market risk management and the use of
derivative financial instruments have been established. With respect to
derivative financial instruments, the value of such instruments is derived from
an underlying variable or multiple variables, including commodity, equity,
foreign exchange and interest rate 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 7 for additional
discussion of Credcos derivative financial instruments.

Interest rate risk is
generated by the funding of cardmember receivables and fixed rate cardmember
loan purchases through longer term variable rate borrowings. Such assets and
liabilities generally do not create naturally offsetting positions with respect to basis, re-pricing or maturity characteristics. By using derivative

19

---



financial instruments, such
as interest rate swaps, the interest rate profile can be adjusted to maintain
and manage a desired profile. As of December 31, 2006 and 2005, the total
notional amount of interest rate swaps was $6 billion and $2 billion, respectively.
These derivatives generally qualify for hedge accounting. A portion of these
derivatives outstanding as of December 31, 2006 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.
As of December 31, 2006 and 2005, the total notional amount of foreign exchange
derivatives was $125 million and $27 million, respectively. These derivatives
generally do not qualify for hedge accounting.

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 $151 million based on the 2006 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 year-end 2006 and 2005 foreign exchange positions, the effect on
Credcos earnings of the hypothetical 10 percent strengthening of the U.S.
dollar would be immaterial.

Operational Risk Management Process

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.
Credco is committed to improving its ability to prioritize and manage
operational risk through the delivery of a comprehensive operational risk
program. American Express has developed a comprehensive program to identify,
measure, monitor, and report inherent and emerging operational risks. However,
day-to-day management of operational risk lies with Credco. Credco continues to
enhance its operational risk management practices on an ongoing basis. The
implementation of this operational risk program is expected to result in
improved operational risk intelligence and a heightened level of preparedness
to deal with operational risk events and conditions that may adversely impact
Credcos operations.

20

---



|        |                                             
|------- | --------------------------------------------
|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 14 to the Consolidated Financial
  Statements appearing herein.
| |    |                                                                                                              

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 9.  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Not
  applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 9A. | CONTROLS AND PROCEDURES.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Credcos
  management, with the participation of Credcos Chief Executive Officer and
  Chief Financial Officer, has evaluated the effectiveness of Credcos
  disclosure controls and procedures (as such term is defined in Rules
  13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
  (the Exchange Act)) as of the end of the period covered by this report.
  Based on such evaluation, Credcos Chief Executive Officer and Chief
  Financial Officer have concluded that, as of the end of such period, Credcos
  disclosure controls and procedures are effective. There have not been any
  changes in Credcos internal control over financial reporting (as such term
  is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during
  Credcos fourth fiscal quarter that have materially affected, or are
  reasonably likely to materially affect, Credcos internal control over
  financial reporting.
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 9B. | OTHER INFORMATION.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|PART III
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Omitted pursuant
  to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

21

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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | 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 $258,275 and $346,250 for the years ended December 31, 2006 and 2005,
  respectively.                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | Audit-Related
  Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | Credco was
  not billed by PricewaterhouseCoopers LLP for any fees for audit-related
  services for 2006 or 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | Tax Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | Credco was
  not billed by PricewaterhouseCoopers LLP for any tax fees for 2006 or 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | All Other
  Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | Credco was
  not billed by PricewaterhouseCoopers LLP for any other fees for 2006 or 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         | 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 accountants are 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 accountants require pre-approval by the Audit Committee in
  accordance with pre-approval procedures established by the Audit Committee.
  The procedures require all proposed engagements of Credcos independent
  registered public accountants 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.

22

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

23

---



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.                                

24

---



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: March 30, 2007 | By | /s/Christopher S. Forno              
|                     |    |                                      
|                     |    | Christopher S. Forno                 
|                     |    | President and 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: March 30, 2007 | By | /s/Christopher S. Forno                                                 
|                     |    |                                                                         
|                     |    | Christopher S. Forno
  President, Chief Executive Officer
  and Director
|                     |    |                                                                         
|DATE: March 30, 2007 |    | /s/Kevin M. Gould                                                       
|                     |    |                                                                         
|                     |    | Kevin M. Gould
  Vice President and Chief Accounting Officer            
|                     |    |                                                                         
|DATE: March 30, 2007 |    | /s/David L. Yowan                                                       
|                     |    |                                                                         
|                     |    | David L. Yowan
  Chief Financial Officer and Director                   

25

---



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

(Item 15 (a))

|                                                            |  |                
|----------------------------------------------------------- |  | ---------------
|                                                            |  | Page Number    
|                                                            |  |                
|                                                            |  |                
|Financial
  Statements:                                     |  |                
|                                                            |  |                
|Reports
  of Independent Registered Public Accounting Firms |  | F  2 and F  3
|                                                            |  |                
|Consolidated
  Statements of Income                         |  | F  4          
|                                                            |  |                
|Consolidated
  Balance Sheets                               |  | F  5          
|                                                            |  |                
|Consolidated
  Statements of Cash Flows                     |  | F  6          
|                                                            |  |                
|Consolidated
  Statements of Shareholders Equity           |  | F  7          
|                                                            |  |                
|Notes
  to Consolidated Financial Statements                |  | F  8 to F  24

All other schedules are omitted since the required
information is not present or not present in amounts sufficient to require
submission of the schedule, or because the information required is included in
the Consolidated Financial Statements or notes thereto.

F-1

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the
Board of Directors 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, 2006 and 2005, and the results of their operations
and their cash flows for each of the two years ended December 31, 2006 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.

/s/PricewaterhouseCoopers
LLP

New York, New York
March 30, 2007

F-2

---



REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The
Board of Directors of
American Express Credit Corporation

We have audited the accompanying consolidated
statements of income, shareholders equity and cash flows of American Express
Credit Corporation for the year ended December 31, 2004. 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 audit.

We conducted our audit 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. We were not engaged to perform an audit of American
Express Credit Corporations internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Companys internal control over financial reporting. Accordingly, we express no
such opinion. An audit also 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, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to
above present fairly, in all material respects, the consolidated results of the
Companys operations and its cash flows for the year ended December 31, 2004,
in conformity with accounting principles generally accepted in the United
States.

/s/Ernst & Young LLP

New York, New York
March 16, 2005

F-3

---



AMERICAN EXPRESS CREDIT CORPORATIONCONSOLIDATED STATEMENTS OF INCOME

|                                                                          |  |      |       |      |   |       |  |   |       | 
|------------------------------------------------------------------------- |  | ---- | ----- | ---- | - | ----- |  | - | ----- | 
|Years Ended December 31, (Millions)                                       |  | 2006 |       | 2005 |   | 2004  | 
|                                                                         
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Revenues                                                                  |  |      |       |      |   |       |  |   |       | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Discount revenue
  earned from purchased cardmember receivables and loans |  | $    | 2,223 |      | $ | 1,680 |  | $ | 1,266 | 
|Interest income
  from affiliates                                         |  |      | 523   |      |   | 396   |  |   | 119   | 
|Interest income
  from investments                                        |  |      | 218   |      |   | 125   |  |   | 104   | 
|Finance charge
  revenue                                                  |  |      | 47    |      |   | 69    |  |   | 339   | 
|Other                                                                     |  |      | 6     |      |   | 6     |  |   | 4     | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Total revenues                                                            |  |      | 3,017 |      |   | 2,276 |  |   | 1,832 | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Expenses                                                                  |  |      |       |      |   |       |  |   |       | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Provision for
  losses, net of recoveries:                                |  |      |       |      |   |       |  |   |       | 
|2006, $158;
  2005, $172; 2004, $187                                      |  |      | 589   |      |   | 662   |  |   | 628   | 
|Interest expense                                                          |  |      | 1,281 |      |   | 943   |  |   | 758   | 
|Interest expense
  to affiliates                                          |  |      | 333   |      |   | 198   |  |   | 105   | 
|Service fees to
  affiliates                                              |  |      | 93    |      |   | 2     |  |   | 25    | 
|Other                                                                     |  |      | 4     |      |   | 6     |  |   | 7     | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Total expenses                                                            |  |      | 2,300 |      |   | 1,811 |  |   | 1,523 | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Pretax income                                                             |  |      | 717   |      |   | 465   |  |   | 309   | 
|Income tax
  provision                                                    |  |      | 95    |      |   | 50    |  |   | 75    | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|                                                                          |  |      |       |      |   |       |  |   |       | 
|Net income                                                                |  | $    | 622   |      | $ | 415   |  | $ | 234   | 
|                                                                          |  |      |       |      |   |       |  |   |       | 

See Notes to Consolidated Financial Statements.

F-4

---



AMERICAN EXPRESS CREDIT CORPORATIONCONSOLIDATED BALANCE SHEETS

|                                                                                                         |  |      |        |      |   |        |  
|-------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|December 31, (Millions, except share data)                                                               |  | 2006 |        | 2005 |  
|                                                                                                        
|                                                                                                         |  |      |        |      |   |        |  
|Assets                                                                                                   |  |      |        |      |   |        |  
|                                                                                                         |  |      |        |      |   |        |  
|Cash and cash
  equivalents                                                                              |  | $    | 737    |      | $ | 1,051  |  
|Investment
  securities                                                                                  |  |      | 2,299  |      |   | 2,996  |  
|Investment
  securities restricted                                                                       |  |      | 716    |      |   |       |  
|Cardmember
  receivables, less reserves:                                                                 |  |      |        |      |   |        |  
|2006, $739;
  2005, $671                                                                                 |  |      | 26,854 |      |   | 23,750 |  
|Cardmember
  loans, less reserves:                                                                       |  |      |        |      |   |        |  
|2006, $10; 2005,
  $15                                                                                   |  |      | 346    |      |   | 554    |  
|Loans with
  affiliates                                                                                  |  |      | 9,691  |      |   | 8,254  |  
|Deferred charges
  and other assets                                                                      |  |      | 316    |      |   | 764    |  
|Due from
  affiliates                                                                                    |  |      | 7      |      |   |       |  
|                                                                                                         |  |      |        |      |   |        |  
|Total assets                                                                                             |  | $    | 40,966 |      | $ | 37,369 |  
|                                                                                                         |  |      |        |      |   |        |  
|                                                                                                         |  |      |        |      |   |        |  
|Liabilities
  and Shareholders Equity                                                                   |  |      |        |      |   |        |  
|                                                                                                         |  |      |        |      |   |        |  
|Short-term debt                                                                                          |  | $    | 5,883  |      | $ | 7,939  |  
|Short-term debt
  with affiliates                                                                        |  |      | 9,586  |      |   | 8,043  |  
|Long-term debt                                                                                           |  |      | 21,790 |      |   | 16,929 |  
|                                                                                                         |  |      |        |      |   |        |  
|Total debt                                                                                               |  |      | 37,259 |      |   | 32,911 |  
|Due to
  affiliates                                                                                      |  |      |       |      |   | 1,021  |  
|Accrued interest
  and other liabilities                                                                 |  |      | 285    |      |   | 166    |  
|                                                                                                         |  |      |        |      |   |        |  
|Total
  liabilities                                                                                      |  |      | 37,544 |      |   | 34,098 |  
|                                                                                                         |  |      |        |      |   |        |  
|                                                                                                         |  |      |        |      |   |        |  
|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                                                                                      |  |      | 3,202  |      |   | 3,080  |  
|Accumulated
  other comprehensive income (loss):                                                         |  |      |        |      |   |        |  
|Net unrealized
  securities gains (losses),  net of
  tax:                                               |  |      |        |      |   |        |  
|2006, $(3); 2005,
  $8                                                                                   |  |      | 5      |      |   | (16    | )
|Net unrealized
  derivatives gains, net of tax:                                                          |  |      |        |      |   |        |  
|2006, $(5); 2005,
  $(31)                                                                                |  |      | 10     |      |   | 57     |  
|Foreign currency
  translation adjustments                                                               |  |      | 45     |      |   | (12    | )
|Other                                                                                                    |  |      | (2     | )    |   |       |  
|                                                                                                         |  |      |        |      |   |        |  
|Total
  accumulated other comprehensive income                                                           |  |      | 58     |      |   | 29     |  
|                                                                                                         |  |      |        |      |   |        |  
|Total
  shareholders equity                                                                             |  |      | 3,422  |      |   | 3,271  |  
|                                                                                                         |  |      |        |      |   |        |  
|Total
  liabilities and shareholders equity                                                             |  | $    | 40,966 |      | $ | 37,369 |  
|                                                                                                         |  |      |        |      |   |        |  

See Notes to Consolidated Financial Statements.

F-5

---



AMERICAN EXPRESS CREDIT CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                         |  |      |        |      |   |        |   |   |        |  
|---------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|Years Ended December 31, (Millions)                                                      |  | 2006 |        | 2005 |   | 2004   |  
|                                                                                        
|Cash Flows from Operating
  Activities                                                   |  |      |        |      |   |        |   |   |        |  
|Net income                                                                               |  | $    | 622    |      | $ | 415    |   | $ | 234    |  
|Adjustments to
  reconcile net income to net cash provided by operating activities:      |  |      |        |      |   |        |   |   |        |  
|Provision for
  losses                                                                   |  |      | 747    |      |   | 834    |   |   | 815    |  
|Amortization and
  other                                                                 |  |      | 9      |      |   | 14     |   |   | 13     |  
|Deferred taxes                                                                           |  |      | (6     | )    |   | (3     | ) |   | 30     |  
|Changes in
  operating assets and liabilities:                                           |  |      |        |      |   |        |   |   |        |  
|Due to
  affiliates                                                                      |  |      | 39     |      |   | 57     |   |   | 11     |  
|Other operating
  assets and liabilities                                                 |  |      | 258    |      |   | (286   | ) |   | (299   | )
|                                                                                         |  |      |        |      |   |        |   |   |        |  
|Net cash
  provided by operating activities                                              |  |      | 1,669  |      |   | 1,031  |   |   | 804    |  
|                                                                                         |  |      |        |      |   |        |   |   |        |  
|Cash Flows from Investing
  Activities                                                   |  |      |        |      |   |        |   |   |        |  
|Net (increase)
  decrease in cardmember receivables and loans                            |  |      | (3,643 | )    |   | (3,410 | ) |   | 2,780  |  
|Purchase of
  investments                                                                |  |      | (3,012 | )    |   | (792   | ) |   | (2,237 | )
|Maturity of
  investments                                                                |  |      | 3,019  |      |   | 979    |   |   | 333    |  
|Sale of
  investments                                                                    |  |      |       |      |   |       |   |   | 1,244  |  
|Net increase in
  loans with affiliates                                                  |  |      | (570   | )    |   | (1,524 | ) |   | (4,760 | )
|Net (decrease)
  increase in due to affiliates                                           |  |      | (1,067 | )    |   | (185   | ) |   | 718    |  
|                                                                                         |  |      |        |      |   |        |   |   |        |  
|Net cash used in
  investing activities                                                  |  |      | (5,273 | )    |   | (4,932 | ) |   | (1,922 | )
|                                                                                         |  |      |        |      |   |        |   |   |        |  
|Cash Flows from Financing
  Activities                                                   |  |      |        |      |   |        |   |   |        |  
|Net increase in
  short-term debt with affiliates with maturities of ninety days or less |  |      | 1,542  |      |   | 2,579  |   |   | 309    |  
|Net decrease in
  short-term debt with maturities of ninety days or less                 |  |      | (2,710 | )    |   | (12    | ) |   | (1,490 | )
|Issuance of debt                                                                         |  |      | 12,208 |      |   | 6,636  |   |   | 9,538  |  
|Redemption of
  debt                                                                     |  |      | (7,250 | )    |   | (7,853 | ) |   | (4,840 | )
|Dividends paid                                                                           |  |      | (500   | )    |   | (200   | ) |   | (125   | )
|                                                                                         |  |      |        |      |   |        |   |   |        |  
|Net cash
  provided by financing activities                                              |  |      | 3,290  |      |   | 1,150  |   |   | 3,392  |  
|                                                                                         |  |      |        |      |   |        |   |   |        |  
|Net (decrease)
  increase  in cash and cash equivalents                                  |  |      | (314   | )    |   | (2,751 | ) |   | 2,274  |  
|Cash and cash
  equivalents at beginning of year                                         |  |      | 1,051  |      |   | 3,802  |   |   | 1,528  |  
|                                                                                         |  |      |        |      |   |        |   |   |        |  
|Cash and cash
  equivalents at end of year                                               |  | $    | 737    |      | $ | 1,051  |   | $ | 3,802  |  
|                                                                                         |  |      |        |      |   |        |   |   |        |  

See Notes to Consolidated Financial Statements.

F-6

---



AMERICAN EXPRESS CREDIT CORPORATIONCONSOLIDATED 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, 2003                       |  | $     | 2,750 |                 | $ | 1                  |  | $                                                     | 161 |                     | $ | (168 | ) | $ | 2,756 |  
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Comprehensive
  income:                               |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Net income                                            |  |       | 234   |                 |   |                    |  |                                                       |     |                     |   |      |   |   | 234   |  
|Change in net
  unrealized securities (losses) gains  |  |       | (36   | )               |   |                    |  |                                                       |     |                     |   | (36  | ) |   |       |  
|Change in net
  unrealized derivatives losses         |  |       | 26    |                 |   |                    |  |                                                       |     |                     |   | 26   |   |   |       |  
|Derivatives
  losses reclassified to earnings         |  |       | 142   |                 |   |                    |  |                                                       |     |                     |   | 142  |   |   |       |  
|Foreign currency
  translation adjustments            |  |       | 2     |                 |   |                    |  |                                                       |     |                     |   | 2    |   |   |       |  
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Total
  comprehensive income                          |  |       | 368   |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Cash dividends
  paid                                 |  |       | (125  | )               |   |                    |  |                                                       |     |                     |   |      |   |   | (125  | )
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Balances at
  December 31, 2004                       |  |       | 2,993 |                 |   | 1                  |  |                                                       | 161 |                     |   | (34  | ) |   | 2,865 |  
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Comprehensive
  income:                               |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Net income                                            |  |       | 415   |                 |   |                    |  |                                                       |     |                     |   |      |   |   | 415   |  
|Change in net
  unrealized securities losses          |  |       | 9     |                 |   |                    |  |                                                       |     |                     |   | 9    |   |   |       |  
|Change in net
  unrealized derivatives gains (losses) |  |       | 60    |                 |   |                    |  |                                                       |     |                     |   | 60   |   |   |       |  
|Derivatives
  losses reclassified to earnings         |  |       | 8     |                 |   |                    |  |                                                       |     |                     |   | 8    |   |   |       |  
|Foreign currency
  translation adjustments            |  |       | (14   | )               |   |                    |  |                                                       |     |                     |   | (14  | ) |   |       |  
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Total
  comprehensive income                          |  |       | 478   |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Cash dividends
  paid                                 |  |       | (200  | )               |   |                    |  |                                                       |     |                     |   |      |   |   | (200  | )
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Balances at
  December 31, 2005                       |  |       | 3,271 |                 |   | 1                  |  |                                                       | 161 |                     |   | 29   |   |   | 3,080 |  
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Comprehensive
  income:                               |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Net income                                            |  |       | 622   |                 |   |                    |  |                                                       |     |                     |   |      |   |   | 622   |  
|Change in net
  unrealized securities gains (losses)  |  |       | 21    |                 |   |                    |  |                                                       |     |                     |   | 21   |   |   |       |  
|Change in net
  unrealized derivatives gains          |  |       | 22    |                 |   |                    |  |                                                       |     |                     |   | 22   |   |   |       |  
|Derivatives
  gains reclassified to earnings          |  |       | (69   | )               |   |                    |  |                                                       |     |                     |   | (69  | ) |   |       |  
|Foreign currency
  translation adjustments            |  |       | 57    |                 |   |                    |  |                                                       |     |                     |   | 57   |   |   |       |  
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Total
  comprehensive income                          |  |       | 653   |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Other                                                 |  |       | (2    | )               |   |                    |  |                                                       |     |                     |   | (2   | ) |   |       |  
|Cash dividends
  paid                                 |  |       | (500  | )               |   |                    |  |                                                       |     |                     |   |      |   |   | (500  | )
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  
|Balances at
  December 31, 2006                       |  | $     | 3,422 |                 | $ | 1                  |  | $                                                     | 161 |                     | $ | 58   |   | $ | 3,202 |  
|                                                      |  |       |       |                 |   |                    |  |                                                       |     |                     |   |      |   |   |       |  

See Notes to Consolidated Financial Statements.

F-7

---



AMERICAN EXPRESS CREDIT CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                 
|-------------------------------------------------
|                                                 
|Note 1 Summary of Significant Accounting Policies

Basis of Presentation

American
Express Credit Corporation, together with its subsidiaries (Credco), is a
wholly-owned subsidiary of American Express Travel Related Services Company,
Inc. (TRS), which is a wholly-owned subsidiary of American Express Company
(American Express). American Express Overseas Credit Corporation Limited,
together with its subsidiaries (AEOCC), Credco Receivables Corporation (CRC),
Credco Finance, Inc., together with its subsidiaries (CFI), American Express
Canada Credit Corporation (AECCC) and American Express Canada Finance Limited
(AECFL), American Express Capital Australia (AECA), American Express Sterling
Funding Limited Partnership, together with its subsidiary (AESLP) and American
Express Euro Funding Limited Partnership (AEELP) are wholly-owned subsidiaries
of Credco.

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 non-variable interest entities in which Credco holds a greater
than 50 percent voting interest. Entities in which Credcos voting interest
exceeds 20 percent but is less than 50 percent are accounted for under the
equity method. 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 all Variable Interest Entities (VIEs) for which it is considered
to be the primary beneficiary pursuant to Financial Accounting Standards Board
(FASB) Interpretation No. 46 (revised December 2003), Consolidation of
Variable Interest Entities (FIN 46(R)). The determination of whether an entity
is a VIE is based on the amount and characteristics of the entitys equity. In
general, FIN 46(R) requires an enterprise to consolidate a VIE when it has a
variable interest and it is deemed to be the primary beneficiary (meaning that
it will absorb a majority of the VIEs expected losses or receive a majority of
the VIEs expected residual return).

Certain
reclassifications of prior period amounts have been made to conform to the
current presentation of the Consolidated Financial Statements.

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. Revenues and expenses are translated at the average
month-end exchange rates during the year. Gains and losses related to
non-functional currency transactions, including non-U.S. operations where the
functional currency is the U.S. dollar, are reported net in other revenue or
other expense, depending on the nature of the activity, in Credcos
Consolidated Statements of Income. Net foreign currency transaction gains
(losses) were immaterial for the years ended 2006, 2005 and 2004.

F-8

---



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 and investment securities valuation. 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. The discount
is deferred and recognized as revenue ratably over the period that the
receivables are estimated to be outstanding. Estimates are based on the recent
historical average life of cardmember receivables.

Finance Charge Revenue

Cardmember
lending finance charges are assessed using the average daily balance method for
receivables 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.

Cash and Cash Equivalents

Credco has
defined cash equivalents to include time deposits and other highly liquid
investments with original maturities of 90 days or less.

Investment Securities

Investment
securities include debt and equity securities classified as Available-for-Sale
investment securities that 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). Gains and
losses are recognized in the Consolidated Statements of Income in other revenue
upon disposition of the securities. Gains and losses on these investments are
recognized using the specific identification method on a trade date basis.
Realized losses are also 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 and managements judgment about the issuers current and prospective
financial condition. Credco uses quoted market prices to determine fair value.
If quoted market prices are not available, Credco estimates fair value using
prices of similar assets or the present value of estimated expected future cash
flows when similar assets do not exist.

Reserves for Losses  Cardmember Receivables
and Loans

Cardmember
receivables represent amounts due from American Express charge card customers
and are recorded at the time a cardmember enters into a point-of-sale
transaction at a service establishment. 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
loans represent amounts due from customers of American Express lending
products, and are recorded at the time a cardmember point-of-sale transaction
is

F-9

---



captured.
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® and Extended Payment Option. Credcos policy is to cease
accruing for interest receivable once a cardmember loan is greater than 180
days past due. Accruals that cease generally are not resumed.

Credcos
reserves for losses relating to cardmember receivables and loans represent
managements 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 (loan balances are written off when 180 days past due)
and average bankruptcy and recovery rates. Management considers whether to
adjust the analytic models based on other factors, such as the level of
coverage of past-due accounts, as well as leading economic and market
indicators, such as the unemployment rate, the consumer confidence index, the
purchasing managers index, bankruptcy filings and the legal and regulatory
environment.

Receivables
and loans are written-off when management deems amounts to be uncollectible,
which is generally determined by the numbers of days past due. In general,
receivables in bankruptcy and deceased accounts are written-off upon notification,
or when 180 days past due for lending products and 360 days past due for charge
card products. For all other accounts, write-off policy is based upon the
delinquency and product. Given both the size and the volatility of write-offs,
management continually monitors evolving trends and adjusts its business
strategy accordingly. To the extent historical credit experience is not
indicative of future performance actual loss experience could differ
significantly from managements judgments and expectations, resulting in either
higher or lower future provisions for losses, as applicable.

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 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 hedgesA 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 item
or transactions impact earnings. The amount that is reclassified into earnings
is presented in the Consolidated Statement of Income with the hedged instrument
or transaction impact, generally, in interest expense. Any ineffective portion
of the gain or loss, as determined by the accounting requirements, is reported
as a component of other revenue. 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.

F-10

---



Fair value hedgesA 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 revenue. If a fair value hedge is
de-designated or terminated prior to maturity, previous adjustments to the
carrying value of the hedged item are recognized into earnings to match the
earnings pattern of the hedged item.

Net investment hedges in foreign operationsA 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 the change in fair value of the derivatives are recorded
in accumulated other comprehensive income (loss) as part of the cumulative
translation adjustment. Any ineffective portions of net investment hedges are
recognized in other revenue during the period of change.

Non-designated derivativesFor 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 accountingDerivative 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 assessments usually are made through
the application of statistical measures. Credco only applies the short cut
method of hedge accounting in very limited cases when this methods
requirements are strictly met. Beginning in 2006, Credco discontinued using the
short cut method on any new transactions. In accordance with its risk
management policies, Credco generally structures its hedges with very similar
terms to the hedged items. Therefore, when applying the accounting
requirements, Credco generally recognizes insignificant amounts of
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.

Recently Issued Accounting Standards

SFAS No. 158,
Employers Accounting for Defined Benefit Pension and Other Postretirement
Plans - an amendment of the FASB Statements No. 87, 88, 106, and 132(R) (SFAS
No. 158), requires the funded status of pension and other postretirement plans
to be recorded on the balance sheet as of December 31, 2006 with a
corresponding offset, net of tax effects, recorded in accumulated other
comprehensive income (loss) within shareholders equity. Effective for years
ending after December 15, 2008, the measurement date for the benefit obligation
and plan assets is required to align with a companys fiscal year end.

Credco
participates in a multi-employer plan and recognizes the cost of pension
expense based on contributions into the plan.

As Credco
participates in a multi-employer plan, the adoption of the provisions included
in SFAS No. 158 did not have a material impact on Credcos Consolidated
Financial Statements.

SFAS No. 156,
Accounting for Servicing of Financial Assets  an amendment of FASB Statement
No. 140 (SFAS No. 156), requires all separately recognized servicing assets
and servicing liabilities to be initially measured at fair value, if
practicable. Subsequent accounting may be elected under either the amortization

F-11

---



method, which
systematically amortizes the servicing asset or liability to income, or the
fair value measurement method, which remeasures the servicing asset or
liability at fair value with the changes recorded in income. Election of the
fair value method is made on a class-by-class basis for each separately
recognized servicing asset and liability. SFAS No. 156 applies to all financial
instruments acquired or issued after December 31, 2006. Credco does not expect
any impact to its Consolidated Financial Statements.

SFAS No. 155,
Accounting for Certain Hybrid Financial Instruments  an amendment of FASB
Statement No. 133 and 140 (SFAS No. 155), ends the temporary exemption of
beneficial interests in securitized assets from the bifurcation requirements of
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.
SFAS No. 155 permits fair value remeasurement of any hybrid financial
instrument that contains an embedded derivative that otherwise would require
bifurcation. SFAS No. 155 applies to all financial instruments acquired or
issued after December 31, 2006. Credco does not expect any impact to its
Consolidated Financial Statements.

The FASB has
recently issued the following accounting standards, which are effective after
December 31, 2006. Credco is currently evaluating the impact of these recently
issued accounting standards on Credcos Consolidated Financial Statements:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | FASB
  Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an interpretation
  of FASB Statement No. 109 (FIN 48), is an interpretation that clarifies the
  accounting for tax positions accounted for under FASB Statement No. 109,
  Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and
  measurement attribute for the financial statement recognition and measurement
  of benefits associated with tax positions taken or expected to be taken in a
  tax return. For any amount of those benefits to be recognized, a tax position
  must be more-likely-than-not to be sustained upon examination by taxing
  authorities based on the technical merits of the position. The amount of
  benefit recognized is based on the Companys assertion of the most likely
  outcome resulting from an examination. FIN 48 is applicable to all tax positions
  as of January 1, 2007. The initial effect of adoption will be reflected in
  first quarter 2007 as a cumulative effect adjustment to income taxes payable
  (in other liabilities) and retained earnings. Credco expects that the cumulative effect of
  the adoption of FIN 48 will result in an immaterial reduction to total shareholders equity.
  Subsequent to the adoption of
  FIN 48, all increases and decreases in Credcos estimated recognizable tax
  benefits will be recorded as a benefit/provision for income taxes.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | SFAS No.
  157, Fair Value Measurements (SFAS No. 157), establishes a framework for
  measuring fair value and applies broadly to financial and non-financial
  assets and liabilities measured at fair value under existing authoritative
  accounting pronouncements. SFAS No. 157 establishes a fair value hierarchy
  that prioritizes inputs to valuation techniques used for financial
  instruments without active markets, and for non-financial assets and
  liabilities. SFAS No. 157 also expands disclosure requirements regarding
  methods used to measure fair value and the effects on earnings. SFAS No. 157
  is effective as of the first quarter of 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | SFAS No.
  159, The Fair Value Option for Financial Assets and Financial Liabilities 
  Including an amendment of FASB Statements No. 115 (SFAS No. 159), provides
  companies with an option to report selected financial assets and liabilities
  at fair value. SFAS No. 159 is effective as of the first quarter of 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-12

---



Note 2 Investment Securities

The following
is a summary of investment securities classified as Available-for-Sale at
December 31:

|                                                                |  |      |       |                            |   |                             |  |              |    |      |   |                            |  |                             |       |              |   |   |  |   |     |   |   |       | 
|--------------------------------------------------------------- |  | ---- | ----- | -------------------------- | - | --------------------------- |  | ------------ | -- | ---- | - | -------------------------- |  | --------------------------- | ----- | ------------ | - | - |  | - | --- | - | - | ----- | 
|                                                                |  | 2006 |       | 2005                       |  
|                                                                |  |      |       |                            |  
|(Millions)                                                      |  | Cost |       | Gross
  Unrealized
  Gains |   | Gross
  Unrealized
  Losses |  | Fair
  Value |    | Cost |   | Gross
  Unrealized
  Gains |  | Gross
  Unrealized
  Losses |       | Fair
  Value |  
|                                                                |  |      |       |                            |   |                             |  |              |    |      |   |                            |  |                             |       |              |  
|                                                               
|American Express Credit Account Master Trust Class C Notes      |  | $    |      |                            | $ |                            |  | $            |   |      | $ |                           |  | $                           | 19    |              | $ |  |  | $ |    |   | $ | 19    | 
|                                                               
|U.S. Treasury and government agency securities                  |  |      | 2,294 |                            |   | 7                           |  |              | (2 | )    |   | 2,299                      |  |                             | 3,001 |              |   |  |  |   | (24 | ) |   | 2,977 | 
|                                                               
|U.S. Treasury and government agency securities  restricted
(a) |  |      | 714   |                            |   | 2                           |  |              |   |      |   | 716                        |  |                             |      |              |   |  |  |   |    |   |   |      | 
|                                                                |  |      |       |                            |   |                             |  |              |    |      |   |                            |  |                             |       |              |   |   |  |   |     |   |   |       | 
|Total                                                           |  | $    | 3,008 |                            | $ | 9                           |  | $            | (2 | )    | $ | 3,015                      |  | $                           | 3,020 |              | $ |  |  | $ | (24 | ) | $ | 2,996 | 
|                                                                |  |      |       |                            |   |                             |  |              |    |      |   |                            |  |                             |       |              |   |   |  |   |     |   |   |       | 

|    |                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | U.S. Treasury and government agency securities -
  restricted at December 31, 2006, represented $716 million of securities
  loaned out on an overnight basis to financial institutions under the
  securities lending program described on page F-15. At December 31, 2005,
  there were no securities loaned out.

The following
tables provide information about Available-for-Sale investment securities with
gross unrealized losses and the length of time that individual securities have
been in a continuous unrealized loss position as of December 31, 2006 and 2005:

|                                                 |  |                       |       |                             |   |            |   |                             |   |              |   |                             |  |   |       |  |   |    |  
|------------------------------------------------ |  | --------------------- | ----- | --------------------------- | - | ---------- | - | --------------------------- | - | ------------ | - | --------------------------- |  | - | ----- |  | - | -- | -
|As of December 31, 2006 (Millions)               |  | Less than
  12 months |       | 12 months
  or more         |   | Total      |  
|                                                 |  |                       |       |                             |   |            |  
|Description of Securities                        |  | Fair
  Value          |       | Gross
  Unrealized
  Losses |   | Fair Value |   | Gross
  Unrealized
  Losses |   | Fair
  Value |   | Gross
  Unrealized
  Losses | 
|                                                 |  |                       |       |                             |   |            |   |                             |   |              |   |                             | 
|U.S.
  Treasury and government agency securities |  | $                     | 1,006 |                             | $ | (2         | ) | $                           |  |              | $ |                            |  | $ | 1,006 |  | $ | (2 | )
|                                                 |  |                       |       |                             |   |            |   |                             |   |              |   |                             |  |   |       |  |   |    |  
|Total                                            |  | $                     | 1,006 |                             | $ | (2         | ) | $                           |  |              | $ |                            |  | $ | 1,006 |  | $ | (2 | )
|                                                 |  |                       |       |                             |   |            |   |                             |   |              |   |                             |  |   |       |  |   |    |  

During 2006
U.S. Treasury and government agency securities - restricted were  in an insignificant
continuous unrealized loss position of less than twelve months.

|                                                 |  |                       |     |                             |   |              |  |                             |       |              |   |                             |   |   |       |  |   |     |  
|------------------------------------------------ |  | --------------------- | --- | --------------------------- | - | ------------ |  | --------------------------- | ----- | ------------ | - | --------------------------- | - | - | ----- |  | - | --- | -
|As of December 31, 2005 (Millions)               |  | Less than
  12 months |     | 12 months
  or more         |   | Total        | 
|                                                 |  |                       |     |                             |   |              | 
|Description of Securities                        |  | Fair
  Value          |     | Gross
  Unrealized
  Losses |   | Fair
  Value |  | Gross
  Unrealized
  Losses |       | Fair
  Value |   | Gross
  Unrealized
  Losses |  
|                                                 |  |                       |     |                             |   |              |  |                             |       |              |   |                             |  
|U.S.
  Treasury and government agency securities |  | $                     | 397 |                             | $ |             |  | $                           | 2,183 |              | $ | (24                         | ) | $ | 2,580 |  | $ | (24 | )
|                                                 |  |                       |     |                             |   |              |  |                             |       |              |   |                             |   |   |       |  |   |     |  
|Total                                            |  | $                     | 397 |                             | $ |             |  | $                           | 2,183 |              | $ | (24                         | ) | $ | 2,580 |  | $ | (24 | )
|                                                 |  |                       |     |                             |   |              |  |                             |       |              |   |                             |   |   |       |  |   |     |  

Credco reviews
and evaluates investment securities on a quarterly basis to identify investment
securities that have indications of possible other-than-temporary impairments.
Accordingly, Credco considers the extent to which amortized cost exceeds fair
value and the duration and size of that difference. A key metric in performing
this evaluation is the ratio of fair value to amortized cost.

F-13

---



The following
table summarizes the unrealized losses of temporary impairments by ratio of
fair value to amortized cost as of December 31, 2006:

|                                          |  |                        |   |                     |   |                             |  |                        |    |              |  |                             |  |                        |   |              |   |                             |  |  |   |  |   |       |  |   |    |  
|----------------------------------------- |  | ---------------------- | - | ------------------- | - | --------------------------- |  | ---------------------- | -- | ------------ |  | --------------------------- |  | ---------------------- | - | ------------ | - | --------------------------- |  |  | - |  | - | ----- |  | - | -- | -
|(Millions, except
  number of securities) |  | Less than
  12 months  |   | 12 months
  or more |   | Total                       | 
|                                          |  |                        |   |                     |   |                             | 
|Ratio of Fair Value to
  Amortized Cost   |  | Number of
  Securities |   | Fair
  Value        |   | Gross
  Unrealized
  Losses |  | Number of
  Securities |    | Fair
  Value |  | Gross
  Unrealized
  Losses |  | Number of
  Securities |   | Fair
  Value |   | Gross
  Unrealized
  Losses | 
|                                          |  |                        |   |                     |   |                             |  |                        |    |              |  |                             |  |                        |   |              |   |                             | 
|95%100%                                  |  |                        | 3 |                     | $ | 1,006                       |  | $                      | (2 | )            |  |                            |  | $                      |  |              | $ |                            |  |  | 3 |  | $ | 1,006 |  | $ | (2 | )
|                                          |  |                        |   |                     |   |                             |  |                        |    |              |  |                             |  |                        |   |              |   |                             |  |  |   |  |   |       |  |   |    |  
|Total                                     |  |                        | 3 |                     | $ | 1,006                       |  | $                      | (2 | )            |  |                            |  | $                      |  |              | $ |                            |  |  | 3 |  | $ | 1,006 |  | $ | (2 | )
|                                          |  |                        |   |                     |   |                             |  |                        |    |              |  |                             |  |                        |   |              |   |                             |  |  |   |  |   |       |  |   |    |  

Credco has the
ability and the intent to hold these securities for a time sufficient to
recover the unrealized losses and expects that contractual principal and
interest will be received on these securities.

The change in
net unrealized securities gains (losses) in other comprehensive income (loss)
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 presents the components of the change in other comprehensive income
(loss) for the years ended December 31:

|                                                                                |  |      |    |      |   |      |   |   |     |  
|------------------------------------------------------------------------------- |  | ---- | -- | ---- | - | ---- | - | - | --- | -
|(Millions, net of tax)                                                          |  | 2006 |    | 2005 |   | 2004 |  
|                                                                                |  |      |    |      |   |      |  
|Unrealized
  gains (losses)                                                     |  | $    | 5  |      | $ | (16  | ) | $ | (25 | )
|Reclassification
  for realized losses (gains)                                  |  |      | 16 |      |   | 25   |   |   | (11 | )
|                                                                                |  |      |    |      |   |      |   |   |     |  
|Net
  unrealized securities gains (losses) in other comprehensive income (loss) |  | $    | 21 |      | $ | 9    |   | $ | (36 | )
|                                                                                |  |      |    |      |   |      |   |   |     |  

The following
is a distribution of Available-for-Sale investment securities by maturity as of
December 31, 2006:

|                                   |  |      |       |            |   |       | 
|---------------------------------- |  | ---- | ----- | ---------- | - | ----- | 
|(Millions)                         |  | Cost |       | Fair Value |  
|                                   |  |      |       |            |  
|Due after 1
  year through 5 years |  | $    | 3,008 |            | $ | 3,015 | 
|                                   |  |      |       |            |   |       | 
|Total                              |  | $    | 3,008 |            | $ | 3,015 | 
|                                   |  |      |       |            |   |       | 

The table
below includes purchases, sales and maturities of investments classified as
Available-for-Sale for the years ended December 31:

|           |  |      |       |      |   |     | 
|---------- |  | ---- | ----- | ---- | - | --- | 
|(Millions) |  | 2006 |       | 2005 |  
|           |  |      |       |      |  
|Purchases  |  | $    | 3,012 |      | $ | 792 | 
|Sales      |  | $    |      |      | $ |    | 
|Maturities |  | $    | 3,019 |      | $ | 979 | 
|           |  |      |       |      |   |     | 

During 2006,
$19 million of Class C Notes and $3.0 billion of U.S. Treasury securities
matured, respectively.

In conjunction
with its liquidity investment portfolio, Credco entered into securities lending
agreements in June 2006 with other financial institutions. Under these
agreements, certain investment securities are loaned on an overnight basis to
financial institutions and are secured by collateral equal to at least 102
percent of the fair market value of the investment securities lent. Collateral
received by Credco can be in the form of cash or

F-14

---



marketable
U.S. Treasury or government agency securities. Credco may only retain or sell
these securities in the event of a borrower default. Credcos loaned investment
securities are considered restricted and pledged assets and, therefore, have
been reclassified as investment securities restricted on the Consolidated
Balance Sheet. The marketable securities received as collateral are not
recorded in its Consolidated Balance Sheet, as Credco is not permitted to sell
or repledge these securities absent a borrower default. Fees received from the
securities lending transactions are recorded as interest income from
investments. At December 31, 2006, approximately $716 million of investment
securities were loaned under these agreements.

Note 3 Cardmember Receivables and Loans

At December
31, 2006 and 2005, Credco owned $27.6 billion and $24.4 billion, respectively,
of cardmember receivables and participation interests in cardmember
receivables. For the years ended December 31, 2006 and 2005, Credco purchased
$279.9 billion and $258.7 billion, respectively, of cardmember receivables.

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 CRC from American Express Receivables Financing Corporation
V LLC (RFC V). During May 2005, TRS established the American Express Issuance
Trust (AEIT), which is used to securitize cardmember receivables originated by
TRS and its subsidiaries. AEIT is a non-qualifying special purpose entity that is consolidated by
RFC V. RFC V, in turn, is consolidated by TRS. Beginning in May 2005, CRC
purchased participation interests held by AEIT from RFC V. Prior to May 2005,
CRC purchased participation interests without recourse from American Express
Receivables Financing Corporation (RFC). These participation interests represented
undivided interests in cardmember receivables transferred to American Express
Master Trust (AEMT) by TRS, which together with its subsidiaries originated the receivables. AEMT was a
non-qualifying special purpose entity that was consolidated by TRS. AEMT was
dissolved during the third quarter of 2005. At December 31, 2006 and 2005, CRC
owned approximately $8.2 billion and $8.6 billion, respectively, of
participation interests purchased from RFC V.

At December
31, 2006 and 2005, Credco owned cardmember loans totaling $0.3 billion and $0.6
billion, respectively, including certain interest-bearing and discounted
extended payment plan receivables comprised principally of American Express
credit card, Sign & Travel®
and Extended Payment Option receivables and lines of credit and loans to
American Express Bank Ltd. customers. For the years ended December 31, 2006 and
2005, Credco purchased $1.1 billion and $1.2 billion, respectively, of
cardmember loans. At December 31, 2006, CRC did not own any participation
interests in cardmember loans.

F-15

---



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

|                                                                                               |  |      |      |      |   |      |   |   |      |  
|---------------------------------------------------------------------------------------------- |  | ---- | ---- | ---- | - | ---- | - | - | ---- | -
|Years Ended December 31, (Millions)                                                            |  | 2006 |      | 2005 |   | 2004 |  
|                                                                                               |  |      |      |      |   |      |  
|Reserve for losses:                                                                            |  |      |      |      |   |      |   |   |      |  
|Balance at beginning of year                                                                   |  | $    | 686  |      | $ | 610  |   | $ | 737  |  
|Additions:                                                                                     |  |      |      |      |   |      |   |   |      |  
|Provision for losses charged to income
(1)                                                     |  |      | 747  |      |   | 834  |   |   | 815  |  
|Other credits (2)                                                                              |  |      | 11   |      |   | 552  |   |   | 53   |  
|Deductions:                                                                                    |  |      |      |      |   |      |   |   |      |  
|Accounts written-off                                                                           |  |      | 690  |      |   | 772  |   |   | 841  |  
|Other charges (3)                                                                              |  |      | 5    |      |   | 538  |   |   | 154  |  
|                                                                                               |  |      |      |      |   |      |   |   |      |  
|                                                                                               |  |      |      |      |   |      |   |   |      |  
|Balance at end of year                                                                         |  | $    | 749  |      | $ | 686  |   | $ | 610  |  
|                                                                                               |  |      |      |      |   |      |   |   |      |  
|                                                                                               |  |      |      |      |   |      |   |   |      |  
|Reserve for losses as a percentage of gross cardmember receivables
and loans owned at year-end |  |      | 2.66 | %    |   | 2.73 | % |   | 2.70 | %
|                                                                                               |  |      |      |      |   |      |   |   |      |  
|                                                                                              

|    |                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Does not include recoveries on
  accounts previously written-off of $158 million, $172 million and $187
  million in 2006, 2005 and 2004, respectively.                                      
|    |                                                                                                                                                                                              
|(2) | 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.
|    |                                                                                                                                                                                              
|(3) | Primarily relates to reserve
  balances applicable to certain groups of cardmember receivables and loans and
  participation interests sold to affiliates.                                   

At December
31, 2006 and 2005, Credco had loans to affiliates outstanding of $9.7 billion
and $8.3 billion. Such amounts represent intercompany borrowings by other
wholly-owned TRS subsidiaries and American Express. Of the $9.7 billion
outstanding as of December 31, 2006, $6.9 billion is collateralized by third
party assets owned by American Express or TRS and its subsidiaries. Loss
reserves related to these amounts are established on a specific identification
basis. See Note 9 for further discussion regarding loans to affiliates.

Note 4 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)          |  | 2006                  |       | 2005                         |  
|                    |  |                       |       |                              |  
|                    |  | Outstanding
  Balance |       | Notional
  Amount of
  Swaps |   | Year-End
  Stated Rate on
  Debt (a) |  | Year-End
  Effective
  Interest Rate
  with Swaps (a) |      | Maturity of
  Swaps |  | Outstanding
  Balance |  | Notional
  Amount
  of Swaps |   | Year-End
  Stated Rate on
  Debt (a) |   | Year-End
  Effective Interest
  Rate with Swaps
  (a) |  | Maturity
  of Swaps |  
|                    |  |                       |       |                              |   |                                      |  |                                                       |      |                     |  |                       |  |                              |   |                                      |   |                                                       |  |                     |  
|Commercial paper    |  | $                     | 5,782 |                              | $ |                                     |  |                                                       | 5.23 | %                   |  |                      |  |                              |  |                                      | $ | 7,742                                                 |  | $                   |  |  |  | 4.19 | % |  |  |  |  |  | 
|Other notes payable |  |                       | 101   |                              |   |                                     |  |                                                       | 5.18 | %                   |  |                      |  |                              |  |                                      |   | 197                                                   |  |                     |  |  |  | 4.40 | % |  |  |  |  |  | 
|                    |  |                       |       |                              |   |                                      |  |                                                       |      |                     |  |                       |  |                              |   |                                      |   |                                                       |  |                     |   |  |  |      |   |  |   |  |  |   | 
|Total               |  | $                     | 5,883 |                              | $ |                                     |  |                                                       | 5.23 | %                   |  |                       |  |                              |   |                                      | $ | 7,939                                                 |  | $                   |  |  |  | 4.20 | % |  |   |  |  |   | 
|                    |  |                       |       |                              |   |                                      |  |                                                       |      |                     |  |                       |  |                              |   |                                      |   |                                                       |  |                     |   |  |  |      |   |  |   |  |  |   | 

|                                                                                                                                                                                                                 | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|(a)For floating rate debt
  issuances, the stated and effective interest rates were based on the
  respective rates at December 31, 2006 and 2005. These rates are not an
  indication of future interest rates.

As of December 31, 2006, there
were no derivative financial instruments outstanding designated as hedges of
the outstanding commercial paper. Credco has designated the interest rate risk
associated with cash flows of future commercial paper issuances as part of its
ongoing hedging program. The notional amount as of December 31, 2006, of such
designated derivative financial instruments was $1.0 billion, reflecting the
hedge of future cash flows of anticipated issuances in 2007 through 2008. See
Note 7 for additional discussion of Credcos cash flow hedging strategies.

F-16

---



At December 31, 2006 and 2005, short-term debt with
affiliates was $9.6 billion and $8.0 billion, respectively.

Credco has various facilities available to obtain
short-term funding, including the issuance of commercial paper and agreements
with banks. At December 31, 2006, there were no short-term borrowings under
uncommitted lines of credit. At December 31, 2005, Credco, through AEOCC, had
short-term borrowings under uncommitted lines of credit totaling $41 million.
Unused lines of credit available to support commercial paper borrowings were
approximately $8.1 billion and $9.3 billion at December 31, 2006 and 2005,
respectively. Credco pays fees to the financial institutions that provide these
credit line facilities.

Credco paid $615 million, $494 million and $480
million of interest on short-term debt obligations in 2006, 2005 and 2004,
respectively.

Note 5 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)                                                               |  | 2006                  |        | 2005                         |  
|                                                                        
|                                                                         |  | Outstanding
  Balance |        | Notional
  Amount
  of Swaps |   | Year-End
  Stated
  Rate on
  Debt (a) |  |      | Year-End
  Effective
  Interest
  Rate with
  Swaps (a) |  |      | Maturity
  of Swaps |  | Outstanding
  Balance |  | Notional
  Amount
  of Swaps |        | Year-End
  Stated
  Rate on
  Debt (a) |   |       | Year-End
  Effective
  Interest
  Rate with
  Swaps (a) |      |      | Maturity
  of Swaps |     
|                                                                        
|                                                                        
|Fixed and Floating Rate
  Senior
and Medium-Term Notes
due 2007-2017 (b) |  | $                     | 19,037 |                              | $ | 4,161                                  |  | 5.10 | %                                                       |  | 5.10 | %                   |  | 2008
  -2015          |  | $                            | 13,600 |                                        | $ | 6,350 |                                                         | 4.48 | %    |                     | 2.99 | % |  | 2006-2015 | 
|Borrowings under Bank
  Credit Facilities due 2009                       |  |                       | 2,753  |                              |   | 916                                    |  | 6.69 | %                                                       |  | 6.49 | %                   |  | 2007-2010             |  |                              | 3,329  |                                        |   | 2,023 |                                                         | 5.25 | %    |                     | 5.52 | % |  | 2006-2010 | 
|                                                                         |  |                       |        |                              |   |                                        |  |      |                                                         |  |      |                     |  |                       |  |                              |        |                                        |   |       |                                                         |      |      |                     |      |   |  |           |  |  | 
|Total                                                                    |  | $                     | 21,790 |                              | $ | 5,077                                  |  | 5.30 | %                                                       |  |      |                     |  |                       |  |                              | $      | 16,929                                 |   | $     | 8,373                                                   |      | 4.64 | %                   |      |   |  |           |  |  | 
|                                                                         |  |                       |        |                              |   |                                        |  |      |                                                         |  |      |                     |  |                       |  |                              |        |                                        |   |       |                                                         |      |      |                     |      |   |  |           |  |  | 

|    |                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | For floating rate debt
  issuances, the stated and effective interest rates were based on the
  respective rates at December 31, 2006 and 2005. These rates are not
  indicative of future interest rates.
|   
|(b) | These balances include $2
  billion and $1 billion notes which are subject to extension by the holders
  through March 5, 2008 and June 20, 2011, respectively.                                           

The above table includes the current portion of
long-term debt of $3.4 billion and $2.3 billion at December 31, 2006 and 2005,
respectively. Aggregate annual maturities of long-term debt are as follows
(billions): 2007, $3.4; 2008, $7.3; 2009, $7.2; 2010, $2.0; 2011, $1.5 and
thereafter, $0.4.

As of December 31, 2006, in
addition to the hedges of existing long-term debt, Credco has designated the
interest rate risk associated with cash flows related to future long-term debt
issuances as part of its hedging program. The notional amount of such
designated derivative financial instruments was $40 million, reflecting the
hedge of future cash flows of anticipated issuances in 2008 through 2010. See
Note 7 for additional discussion of Credcos cash flow hedging strategies.

Credco paid interest on long-term debt obligations of
$930 million, $603 million and $319 million in 2006, 2005 and 2004,
respectively.

Other financial institutions have committed to extend
lines of credit to Credco of $10.8 billion and $12.6 billion at December 31,
2006 and 2005, respectively. Of these amounts, $8.1 billion and $9.3 billion
remained available for use as of December 31, 2006 and 2005, respectively.

Note 6 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.

F-17

---



Note 7 Derivatives and Hedging Activities

Credco uses derivative
financial instruments to manage exposure to various market risks. The value of
derivative instruments is derived from an underlying variable or multiple
variables, including commodity, equity, foreign exchange and interest rate indices
or prices. Credco does not engage in any trading activities. 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 that risk, Credcos counterparties are all required to be pre-approved
and rated as investment grade or higher. Additionally, Credco enters into
master netting agreements with its counterparties wherever practical.

The following table
summarizes the total fair value, excluding accruals, of derivative product
assets and liabilities at December 31:

|                                       |  |        |      |             |   |        |  |             |       |  |   |     | 
|-------------------------------------- |  | ------ | ---- | ----------- | - | ------ |  | ----------- | ----- |  | - | --- | 
|(Millions)                             |  | 2006   |      | 2005        |  
|                                      
|                                       |  | Assets |      | Liabilities |   | Assets |  | Liabilities |      
|                                      
|                                      
|Cash flow hedges                       |  | $      | 26.9 |             | $ | 11.1   |  | $           | 91.2  |  | $ | 2.2 | 
|Fair value hedges                      |  |        |     |             |   | 3.8    |  |             | 4.3   |  |   |    | 
|Derivatives not designated
  as hedges |  |        | 1.5  |             |   | 14.0   |  |             | 15.1  |  |   | 5.3 | 
|                                       |  |        |      |             |   |        |  |             |       |  |   |     | 
|Total fair value,
  excluding accruals |  | $      | 28.4 |             | $ | 28.9   |  | $           | 110.6 |  | $ | 7.5 | 
|                                       |  |        |      |             |   |        |  |             |       |  |   |     | 

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

|                                                                                                                                            |  |      |      |      |   |      |   |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | ---- | - | ---- | - | - | ---- | -
|(Millions)                                                                                                                                  |  | 2006 |      | 2005 |   | 2004 |  
|                                                                                                                                            |  |      |      |      |   |      |  
|                                                                                                                                           
|Cash flow hedges (a):                                                                                                                       |  |      |      |      |   |      |   |   |      |  
|Ineffective net
  (losses) gains                                                                                                            |  | $    | (0.7 | )    | $ | 0.8  |   | $ | 0.7  |  
|Gains on
  forecasted transactions no longer probable to occur                                                                              |  | $    |     |      | $ |     |   | $ | 16   |  
|Reclassification of
  realized gains (losses) from other comprehensive income (loss), net of tax of
  $37, $(4), and $(76),    respectively |  | $    | 69   |      | $ | (8   | ) | $ | (142 | )
|                                                                                                                                            |  |      |      |      |   |      |   |   |      |  

|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|(a) | There were no (losses) gains due to exclusion from
  the assessment of hedge effectiveness for 2006, 2005 and 2004.

For fair value hedges, there
were no gains or losses on derivative transactions or portions thereof that
were excluded from the assessment of hedge effectiveness and no hedge
ineffectiveness was recognized for the years ended December 31, 2006, 2005 and
2004.

F-18

---



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

|                                                                                              |  |      |     |      |   |      |  |   |     | 
|--------------------------------------------------------------------------------------------- |  | ---- | --- | ---- | - | ---- |  | - | --- | 
|(Millions)                                                                                    |  | 2006 |     | 2005 |   | 2004 | 
|                                                                                              |  |      |     |      |   |      | 
|                                                                                             
|Cash flow hedges:                                                                             |  |      |     |      |   |      |  |   |     | 
|Unrealized
  gains, net of tax of $12, $32 and $14, respectively                              |  | $    | 22  |      | $ | 60   |  | $ | 26  | 
|Reclassification
  for realized (gains) losses, net of tax of $(37), $4 and $76, respectively |  |      | (69 | )    |   | 8    |  |   | 142 | 
|                                                                                              |  |      |     |      |   |      |  |   |     | 
|Net change in
  accumulated other comprehensive income (loss)                                 |  | $    | (47 | )    | $ | 68   |  | $ | 168 | 
|                                                                                              |  |      |     |      |   |      |  |   |     | 
|                                                                                              |  |      |     |      |   |      |  |   |     | 
|Net investment hedges:                                                                        |  |      |     |      |   |      |  |   |     | 
|Net losses
  related to hedges in cumulative translation adjustment                           |  | $    | (15 | )    | $ |     |  | $ |    | 
|                                                                                              |  |      |     |      |   |      |  |   |     | 
|Net change in
  accumulated other comprehensive income (loss)                                 |  | $    | (15 | )    | $ |     |  | $ |    | 
|                                                                                              |  |      |     |      |   |      |  |   |     | 

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. Credco uses interest rate products (primarily interest rate swaps)
to manage funding costs and interest rate risk. These swaps are used to achieve
a targeted mix of fixed and floating rate funding, as well as to protect Credco
from interest rate risk by hedging existing long-term debt, the rollover of
short-term borrowings primarily commercial paper, and the anticipated
forecasted issuance of additional funding. See Notes 4 and 5 for additional discussion of
the cash flow hedging strategies related to short- and long-term debt.

As of December 31, 2006 and
2005, net unrealized derivatives gains, net of tax, reflected in accumulated
other comprehensive income were $10 million and $57 million, respectively.

At December 31, 2006, Credo expects to
reclassify $10 million of net pretax gains on derivative instruments from
accumulated other comprehensive income (loss) to earnings during the next
twelve months. In the event that cash flow hedge accounting is no longer
applied (i.e. Credco de-designates a derivative as hedge, a hedge is no longer
considered to be highly effective, or the forecasted transaction being hedged
is no longer probable of occurring), the reclassification from accumulated
other comprehensive income (loss) into earnings may be accelerated and all
future market value fluctuations of the derivative will be reflected in
earnings.

Currently, the longest
period of time over which Credco is hedging exposure to variability in future
cash flows is approximately four years, which is related to long-term debt.

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 fixed-rate debt and, from time
to time, uses interest rate swaps to convert certain fixed-rate debt to
floating-rate.

Net Investment Hedges

A net investment hedge in a
foreign operation is a derivative used to hedge future changes in currency
exposure of a net investment in a foreign operation. Credco designates
foreign currency derivatives, primarily forward agreements, as hedges of net
investments in certain foreign operations. These derivatives reduce exposure to
changes in currency exchange rates on  Credcos investments in non-U.S.
subsidiaries.

F-19

---



Derivatives not Designated as Hedges

Credco has economic hedges that either do not qualify
or are not designated for hedge accounting treatment. Foreign currency
transactions and non-U.S. dollar cash flow exposures are economically hedged,
where practical, through foreign currency contracts, primarily forward
contracts, foreign currency options and cross-currency swaps, and generally
mature within one year. Foreign currency contracts involve the purchase and
sale of a designated currency at an agreed upon rate for settlement on a
specified date. The
following table provides the total fair value, excluding accruals, of these
derivative products assets and liabilities as of December 31:

|                                       |  |        |     |             |   |        |  |             |      |  |   |     | 
|-------------------------------------- |  | ------ | --- | ----------- | - | ------ |  | ----------- | ---- |  | - | --- | 
|(Millions)                             |  | 2006   |     | 2005        |  
|                                       |  |        |     |             |  
|                                       |  | Assets |     | Liabilities |   | Assets |  | Liabilities |     
|                                       |  |        |     |             |   |        |  |             |     
|                                       |  |        |     |             |   |        |  |             |      |  |   |     | 
|Foreign
  currency transactions        |  | $      | 1.5 |             | $ | 10.1   |  | $           | 5.5  |  | $ | 2.1 | 
|Interest
  rate swaps                  |  |        |    |             |   | 3.9    |  |             | 9.6  |  |   | 3.2 | 
|                                       |  |        |     |             |   |        |  |             |      |  |   |     | 
|Total
  fair value, excluding accruals |  | $      | 1.5 |             | $ | 14.0   |  | $           | 15.1 |  | $ | 5.3 | 
|                                       |  |        |     |             |   |        |  |             |      |  |   |     | 

Note 8 Variable Interest Entities

During the second quarter of 2004, 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, 2006 and
2005 were $2.2 billion and $1.8 billion, respectively. Total liabilities as of
December 31, 2006 and 2005 were $2.0 billion and $1.7 billion, respectively.
Credco has no significant interest in a VIE for which it is not considered the
primary beneficiary.

Note 9 Transactions with Affiliates

In 2006, 2005 and 2004, Credco purchased cardmember
receivables and loans without recourse from TRS and certain of its subsidiaries
totaling approximately $281.0 billion, $259.9 billion and $240.1 billion,
respectively. The 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 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, 2005, CRC held American Express Credit
Account Master Trust Class C Notes with a fair value of $19 million. During 2006,
the remaining Class C Notes matured.

At December 31, 2006 and 2005, CRC owned approximately $8.2 billion and
$8.6 billion, respectively, of participation interests purchased from RFC V,
representing approximately 29 percent and 34 percent of Credcos total
cardmember receivables and loans, respectively. At December 31, 2006 and 2005, there was no
participation interest in cardmember loans owned by CRC.

F-20

---



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

|                                                                       |  |      |       |      |   |       |  |   |       | 
|---------------------------------------------------------------------- |  | ---- | ----- | ---- | - | ----- |  | - | ----- | 
|December 31, (Millions)                                                |  | 2006 |       | 2005 |   | 2004  | 
|                                                                       |  |      |       |      |   |       | 
|Cash and cash equivalents                                              |  | $    | 5     |      | $ | 7     |  | $ | 8     | 
|Maximum month-end level of cash and cash
  equivalents during the year |  |      | 145   |      |   | 10    |  |   | 11    | 
|Loans with affiliates                                                  |  |      | 9,691 |      |   | 8,254 |  |   | 7,039 | 
|Maximum month-end level of loans with
  affiliates during the year     |  |      | 9,691 |      |   | 8,254 |  |   | 7,039 | 
|Short-term debt with affiliates                                        |  |      | 9,586 |      |   | 8,043 |  |   | 5,465 | 
|Maximum month-end level of borrowings
  during the year                |  |      | 9,719 |      |   | 8,145 |  |   | 8,170 | 
|Interest income                                                        |  |      | 523   |      |   | 396   |  |   | 119   | 
|Other income                                                           |  |      | 6     |      |   | 6     |  |   | 4     | 
|Interest expense                                                       |  |      | 333   |      |   | 198   |  |   | 105   | 
|Service fees                                                           |  |      | 93    |      |   | 2     |  |   | 25    | 
|                                                                       |  |      |       |      |   |       |  |   |       | 

Credcos loans
with affiliates represent fixed and floating rate interest-bearing intercompany
borrowings by other wholly-owned TRS subsidiaries and American Express. Of the
$9.7 billion outstanding as of December 31, 2006, $6.9 billion is due to the
transfer of cardmember receivables and cardmember loans with recourse and is
collateralized by third-party assets owned by American Express or TRS and its
subsidiaries.

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

|                                         |  |      |       |      |   |       | 
|---------------------------------------- |  | ---- | ----- | ---- | - | ----- | 
|(Millions)                               |  | 2006 |       | 2005 |  
|                                         |  |      |       |      |  
|TRS Parent                               |  | $    | 531   |      | $ | 750   | 
|TRS Subsidiaries:                        |  |      |       |      |   |       | 
|American Express Services Europe Limited |  |      | 3,360 |      |   | 2,799 | 
|American Express Australia Limited       |  |      | 3,529 |      |   | 2,489 | 
|Amex Bank of Canada                      |  |      | 2,166 |      |   | 1,797 | 
|American Express International, Inc.     |  |      | 105   |      |   | 419   | 
|                                         |  |      |       |      |   |       | 
|Total                                    |  | $    | 9,691 |      | $ | 8,254 | 
|                                         |  |      |       |      |   |       | 

On February 9,
2007, the loan with TRS Parent of $531 million was repaid.

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

F-21

---



Note 10 Fair Values of Financial Instruments

The following
table discloses fair value information of Credcos financial assets and
liabilities as of December 31:

|                                                                        |  |                  |    |              |   |                  |  |              |    |  |   |    | 
|----------------------------------------------------------------------- |  | ---------------- | -- | ------------ | - | ---------------- |  | ------------ | -- |  | - | -- | 
|(Billions)                                                              |  | 2006             |    | 2005         |  
|                                                                        |  |                  |    |              |  
|                                                                        |  | Carrying
  Value |    | Fair
  Value |   | Carrying
  Value |  | Fair
  Value |   
|                                                                        |  |                  |    |              |   |                  |  |              |   
|Financial Assets:                                                       |  |                  |    |              |   |                  |  |              |    |  |   |    | 
|Assets for which carrying values equal or
  approximate fair value      |  | $                | 31 |              | $ | 31               |  | $            | 29 |  | $ | 29 | 
|Loans with affiliates                                                   |  | $                | 10 |              | $ | 10               |  | $            | 8  |  | $ | 8  | 
|Financial Liabilities:                                                  |  |                  |    |              |   |                  |  |              |    |  |   |    | 
|Liabilities for which carrying values equal
  or approximate fair value |  | $                | 16 |              | $ | 16               |  | $            | 17 |  | $ | 17 | 
|Long-term debt                                                          |  | $                | 22 |              | $ | 22               |  | $            | 17 |  | $ | 17 | 
|                                                                        |  |                  |    |              |   |                  |  |              |    |  |   |    | 

The fair
values of these financial instruments are estimates based upon market
conditions and perceived risks as of December 31, 2006 and 2005 and require
management judgment. These figures may not be indicative of their future fair
values. The fair value of Credco, therefore, cannot be estimated by aggregating
the amounts presented. The following methods were used to determine fair
values. Financial assets and liabilities for which carrying values equal or
approximate fair values include cash and cash equivalents, cardmember
receivables, cardmember loans, loans with affiliates, short-term debt and
floating rate long-term debt, the carrying value approximates fair value
because these are short-term in duration, variable rate in nature or recorded at
fair value on the Consolidated Balance Sheets. Generally, investment securities
are carried at fair value on the Consolidated Balance Sheets and 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. Derivative financial instruments are also carried 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. For floating rate long-term debt that reprices
within one year, fair value approximates carrying value. For other 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.

Note 11 Significant Credit Concentrations

Credit
concentrations arise when customers operate in similar industries, economic
sectors or geographic regions. Credcos customers operate in diverse
industries, economic sectors and geographic regions. Therefore, management does
not expect any material adverse consequences to Credcos financial position,
results of operations or cash flows to result from these types of credit
concentrations.

Note 12 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 vary by
jurisdiction. The examination currently being conducted by the IRS covers
1997-2004. Due to the inherent complexities of the business and given Credco is
subject to taxation in a substantial number of jurisdictions, Credco is required
to make certain judgments and estimates. Credco routinely assesses the

F-22

---



likelihood of additional assessments in each of the taxing jurisdictions, and
has established tax reserves that Credco believes to be adequate. Once
established, reserves are adjusted if more accurate information is available,
or a change in circumstance or an event occurs necessitating a change to the
reserves.

The components
of income tax provision included in Credcos Consolidated Statements of Income
were as follows:

|                                           |  |      |     |      |   |      |   |   |    | 
|------------------------------------------ |  | ---- | --- | ---- | - | ---- | - | - | -- | 
|(Millions)                                 |  | 2006 |     | 2005 |   | 2004 |  
|                                           |  |      |     |      |   |      |  
|Current
  income tax provision:            |  |      |     |      |   |      |   |   |    | 
|U.S. federal                               |  | $    | 94  |      | $ | 34   |   | $ | 39 | 
|Non-U.S.                                   |  |      | 7   |      |   | 19   |   |   | 6  | 
|                                           |  |      |     |      |   |      |   |   |    | 
|Total current provision                    |  |      | 101 |      |   | 53   |   |   | 45 | 
|                                           |  |      |     |      |   |      |   |   |    | 
|Deferred
  income tax (benefit) provision: |  |      |     |      |   |      |   |   |    | 
|U.S. federal                               |  |      | (6  | )    |   | (3   | ) |   | 30 | 
|                                           |  |      |     |      |   |      |   |   |    | 
|Total deferred (benefit) provision         |  |      | (6  | )    |   | (3   | ) |   | 30 | 
|                                           |  |      |     |      |   |      |   |   |    | 
|Total income
  tax provision               |  | $    | 95  |      | $ | 50   |   | $ | 75 | 
|                                           |  |      |     |      |   |      |   |   |    | 

A
reconciliation of the U.S. federal statutory rate of 35 percent to Credcos
effective income tax rate for 2006, 2005 and 2004 was as follows:

|                                                                |  |      |       |      |  |       |   |  |       |  
|--------------------------------------------------------------- |  | ---- | ----- | ---- |  | ----- | - |  | ----- | -
|                                                                |  | 2006 |       | 2005 |  | 2004  |  
|                                                                |  |      |       |      |  |       |  
|Combined tax
  at U.S. statutory rate                           |  |      | 35.0  | %    |  | 35.0  | % |  | 35.0  | %
|Changes in
  taxes resulting from:                              |  |      |       |      |  |       |   |  |       |  
|Non-U.S. income taxes at rates other than
  U.S. statutory rate |  |      | (21.8 | )    |  | (24.2 | ) |  | (10.7 | )
|                                                                |  |      |       |      |  |       |   |  |       |  
|Effective
  tax rates                                           |  |      | 13.2  | %    |  | 10.8  | % |  | 24.3  | %
|                                                                |  |      |       |      |  |       |   |  |       |  

Accumulated
earnings of certain non-U.S. subsidiaries, which totaled approximately $889 million at
December 31, 2006, are intended to be permanently reinvested outside the United
States. Accordingly, federal taxes, which would have aggregated approximately
$300 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)                                                      |  | 2006 |     | 2005 |  
|                                                                |  |      |     |      |  
|Deferred tax
  assets:                                          |  |      |     |      |   |     | 
|Reserves not yet deducted for tax
purposes                      |  | $    | 241 |      | $ | 236 | 
|Net unrealized securities losses                                |  |      |    |      |   | 8   | 
|Net unrealized pension and other postretirement
  benefit costs |  |      | 1   |      |   |    | 
|                                                                |  |      |     |      |   |     | 
|Total deferred tax assets                                       |  |      | 242 |      |   | 244 | 
|                                                                |  |      |     |      |   |     | 
|Deferred tax
  liabilities:                                     |  |      |     |      |   |     | 
|Net unrealized derivative gains                                 |  |      | 5   |      |   | 31  | 
|Net unrealized securities gains                                 |  |      | 3   |      |   |    | 
|Other                                                           |  |      | 8   |      |   | 8   | 
|                                                                |  |      |     |      |   |     | 
|Total deferred tax liabilities                                  |  |      | 16  |      |   | 39  | 
|                                                                |  |      |     |      |   |     | 
|Net deferred
  tax assets                                       |  | $    | 226 |      | $ | 205 | 
|                                                                |  |      |     |      |   |     | 

F-23

---



In 2006 and
2005, due to affiliates included current federal taxes payable to TRS of $24
million and $54 million, respectively.

Income taxes
paid by Credco during 2006, including taxes paid to TRS, was $139 million.
Income taxes refunded to Credco during 2005, including taxes refunded by TRS,
was $12 million. Income taxes paid by Credco during 2004, including taxes paid
to TRS, was $79 million. These amounts include estimated tax payments and cash
settlements relating to prior tax years.

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

|                                                                |  |      |     |      |   |      |  |   |     |  
|--------------------------------------------------------------- |  | ---- | --- | ---- | - | ---- |  | - | --- | -
|(Millions)                                                      |  | 2006 |     | 2005 |   | 2004 | 
|                                                                |  |      |     |      |   |      | 
|Net
  unrealized securities gains (losses)                      |  | $    | 11  |      | $ | 5    |  | $ | (19 | )
|Net
  unrealized derivative (losses) gains                      |  |      | (26 | )    |   | 37   |  |   | 90  |  
|Net unrealized pension and other
  postretirement benefit costs |  |      | 1   |      |   |     |  |   |    |  
|                                                                |  |      |     |      |   |      |  |   |     |  
|Income tax
  (benefit) provision                                |  | $    | (14 | )    | $ | 42   |  | $ | 71  |  
|                                                                |  |      |     |      |   |      |  |   |     |  

Note 13 Geographic Segments

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)      |  | 2006 |       | 2005 |   | 2004  | 
|                |  |      |       |      |   |       | 
|Revenues        |  |      |       |      |   |       |  |   |       | 
|United States   |  | $    | 2,140 |      | $ | 1,561 |  | $ | 1,196 | 
|International   |  |      | 877   |      |   | 715   |  |   | 636   | 
|                |  |      |       |      |   |       |  |   |       | 
|Consolidated    |  |      | 3,017 |      |   | 2,276 |  |   | 1,832 | 
|                |  |      |       |      |   |       |  |   |       | 
|Pretax
  income |  |      |       |      |   |       |  |   |       | 
|United States   |  |      | 607   |      |   | 353   |  |   | 223   | 
|International   |  |      | 110   |      |   | 112   |  |   | 86    | 
|                |  |      |       |      |   |       |  |   |       | 
|Consolidated    |  | $    | 717   |      | $ | 465   |  | $ | 309   | 
|                |  |      |       |      |   |       |  |   |       | 

Note 14 Quarterly Financial Data (Unaudited)

|                             |  |       |     |      |   |      |  |      |     |       |   |      |  |      |     |      |   |     |  |   |     |  |   |     | 
|---------------------------- |  | ----- | --- | ---- | - | ---- |  | ---- | --- | ----- | - | ---- |  | ---- | --- | ---- | - | --- |  | - | --- |  | - | --- | 
|                             |  | 2006  |     | 2005 |  
|                             |  |       |     |      |  
|Quarters
  Ended, (Millions) |  | 12/31 |     | 9/30 |   | 6/30 |  | 3/31 |     | 12/31 |   | 9/30 |  | 6/30 |     | 3/31 |  
|                             |  |       |     |      |   |      |  |      |     |       |   |      |  |      |     |      |  
|Revenues                     |  | $     | 866 |      | $ | 818  |  | $    | 689 |       | $ | 644  |  | $    | 659 |      | $ | 547 |  | $ | 575 |  | $ | 495 | 
|Pretax
  income              |  |       | 193 |      |   | 181  |  |      | 199 |       |   | 144  |  |      | 119 |      |   | 103 |  |   | 139 |  |   | 104 | 
|Net income                   |  |       | 169 |      |   | 160  |  |      | 167 |       |   | 126  |  |      | 124 |      |   | 92  |  |   | 104 |  |   | 95  | 
|                             |  |       |     |      |   |      |  |      |     |       |   |      |  |      |     |      |   |     |  |   |     |  |   |     | 

F-24

---



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

---



|     |  |                                                                                |  |                                                                                                                                           
|---- |  | ------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------
|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 Medium-Term 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 Medium-Term 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

---



|     |  |                                                                                   |  |                                                                                                                                                            
|---- |  | --------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|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 Medium-Term
  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 Medium-Term
  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 Securities®
  (EXLs®)    |  | 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.                     
|     |  |                                                                                   |  |                                                                                                                                                            
|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.                 
|     |  |                                                                                   |  |                                                                                                                                                            

E-3

---



|      |  |                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                             
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|4(t)  |  | Form of Permanent Global Registered Fixed Rate Medium-Term 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 Medium-Term 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 Medium-Term Notes to be issued outside
  the United States under the Registrants Australian Debt Issuance Program                                                                                                                                                                                               |  | Electronically filed herewith.                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                             
|4(w)  |  | 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. |  |                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                             
|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.
|      |  |                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                             
|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.                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                             
|23.2  |  | Consent of Ernst & Young LLP Independent
  Registered Public Accounting Firm                                                                                                                                                                                                                                                   |  | Electronically filed herewith.                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                             

E-4

---



|     |  |                                                                                                                                                                              |  |                               
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------
|31.1 |  | Certification of Christopher S. Forno, 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 David L. Yowan, 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 Christopher S. Forno, 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 David L. Yowan, 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

---