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|UNITED STATES                                                                               
|SECURITIES AND EXCHANGE COMMISSION                                                          
|Washington,
 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, 2010
 OR                                            
|oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
 OF
 THE SECURITIES EXCHANGE ACT OF 1934
|                                                                                            
|For
 the transition period from _____ to _____ 
 Commission File No. 1-6908                 
|                                                                                            
|AMERICAN
 EXPRESS CREDIT CORPORATION                                                        
|(Exact
 name of Registrant as specified in its charter)                                     

|                                 |                                       |           
|-------------------------------- | ------------------------------------- | ----------
|Delaware                         |                                       | 11-1988350
|(State or other
 jurisdiction of | (I.R.S.
 Employer Identification No.)
|incorporation or
 organization)  |                                      

|                                                                    |            
|------------------------------------------------------------------- | -----------
|World
 Financial Center                                             |            
|200 Vesey
 Street                                                   |            
|New York,
 New York                                                 | 10285      
|                                                                    |            
|(Address of principal
 executive offices)                           | (Zip
 Code)
|Registrants telephone
 number including area code: (866) 572-4944.
|                                                                   
|Securities
 registered pursuant to Section 12 (b) of the Act:       |            

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

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. Yes x
No o

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. Yes o
No x

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. Yes x No o

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

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

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

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

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 31, 2011, 1,504,938 shares were outstanding.

Documents incorporated by reference: None

---



PART I1

|        |         
|------- | --------
|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. Both American Express and TRS are bank holding companies.

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

American Express Card Business

American
Express is a global service company that provides customers with access to
products, insights and experiences that enrich lives and build business
success. American Express principal products and services are charge and
credit payment card products and travel-related services offered to consumers
and businesses around the world.

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

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

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|1 | Some of the statements
 in this report constitute forward-looking statements. You can identify
 forward-looking statements by words such as believe, expect,
 anticipate, optimistic, intend, plan, aim, will, may, should,
 could, would, likely, estimate, predict, potential, continue,
 or other similar expressions. We discuss certain factors that affect our
 business and operations and that may cause our actual results to differ
 materially from these forward-looking statements under Item 1A. Risk
 Factors and under Forward-looking Statements below. You are cautioned not
 to place undue reliance on these forward-looking statements, which speak only
 as of the date on which they are made. We undertake no obligation to update
 publicly or revise any forward-looking statements.

1

---



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 (FCRA) as amended by the Fair and Accurate Credit
 Transactions Act (FACT Act) (which, among other things, regulates use by
 creditors of consumer credit reports and credit prescreening practices and
 requires certain disclosures when an application for credit is rejected);                                 
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the
 Truth in Lending Act (TILA) (which, among other things, requires extensive disclosure
 of the terms upon which credit is granted), including the amendments to TILA
 that were adopted through the enactment of the Fair Credit and Charge Card
 Disclosure Act (which mandates certain disclosures on credit and charge card
 applications);
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the
 Fair Credit Billing Act (which, among other things, regulates the manner in
 which billing inquiries are handled and specifies certain billing
 requirements);                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the
 Electronic Funds Transfer Act (which regulates disclosures and settlement of
 transactions for electronic funds transfers including those at ATMs);                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                   
| | the
 Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD
 Act) (which prohibits certain acts and practices in connection with consumer
 card accounts);                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                   
| | Regulation
 Z (which was amended by the Federal Reserve Board (Federal Reserve) to
 extensively revise the open end consumer disclosure requirements and to
 implement the requirements of the CARD Act);                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                   
| | The
 Consumer Financial Protection Act of 2010 (Title X of the Dodd-Frank Reform
 Act)(which provides for the creation of the Consumer Financial Protection
 Bureau, a new financial services regulator); and                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                   
| | Federal
 and state laws and regulations that generally prohibit engaging in unfair and
 deceptive business practices.                                                                                                                                                                                                                             

Certain
federal privacy-related laws and regulations govern the collection and use of
customer information by financial institutions. Federal legislation also
regulates abusive debt collection practices. In addition, a number of states,
the European Union and many foreign countries in which American Express
operates have significant consumer credit protection, disclosure and
privacy-related laws (in certain cases more stringent than the laws in the
United States). The bankruptcy and debtor relief laws affect Credco to the
extent that such laws result in amounts owed being classified as delinquent
and/or charged-off as uncollectible. Card issuers and card networks are subject
to certain provisions of the Bank Secrecy Act, as amended by the USA Patriot
Act of 2001, with regard to maintaining effective anti-money laundering
programs.

General Nature of Credcos Business

As
noted above, Credco engages in the business of financing the cardmember
receivables and loans of its affiliates. The use of a centralized funding
source for assets originated by affiliated entities is utilized by other large
corporations like American Express, providing operational efficiency in the
form of a single point of issuance to investors in the capital markets. Because
its business operations have the limited scope of providing funding to its
card-issuing affiliates, Credcos results remain separate from other sources of
volatility and risk inherent in the businesses of American Express and its
other affiliates, making credit evaluations by investors and rating agencies
less complex. The separation of Credco from American Express and its other
affiliates also allows American Express to provide Credco with financial
support with respect to maintenance of its minimum overall 1.25 fixed charge
coverage ratio, which is achieved by adjusting the discount rates on the
purchases of receivables Credco makes from, and the interest rates on the loans
Credco provides to, TRS and other American Express subsidiaries. Each monthly
period, the discount and interest rates are adjusted to generate income for
Credco that is sufficient to maintain its minimum fixed charge coverage ratio.
Refer to Exhibit 12.1 for fixed charge coverage ratio calculation.

In
October 2008, as part of American Express strategy to increase its flexibility
in funding U.S. consumer and small business charge card receivables, Credco and
both American Express Centurion Bank (Centurion Bank) and American Express
Bank, FSB (FSB) (together, the Banks) mutually agreed to amend their respective
agreements for the purchase and sale of card receivables (Receivables
Agreements). The previous agreements called for the Banks, which issue American
Express U.S. consumer and small business charge cards, to sell all unsecuritized
receivables related to spending
on those cards to Credco. The amended agreements give the Banks the
flexibility, from time to time, to sell the receivables to Credco or to retain
the receivables and fund them from their own sources, which aligns with
American Express strategy to maintain access to a range of funding sources.
However, the amended agreements require each Bank to sell either all or none of
its charge card receivables to Credco at any given time. The Banks, therefore,
may not direct receivables with particular risk characteristics for sale to
Credco. The arrangements between Credco and the Banks have no impact on
Credcos funding of U.S. Corporate Card charge receivables and charge card
receivables outside the United States.

2

---



The
amendments to the Receivables Agreements have led to a material reduction of
Credcos purchases of cardmember receivables from the Banks. This reduction in
volume has resulted in a reduction in Credcos issuances in the debt capital
markets and, in particular, its reliance on short-term borrowings. However, a
decline in Credcos debt issuances, all else being equal, should not have an
adverse affect on Credcos performance and could serve to strengthen Credcos
balance sheet metrics, as Credcos level of debt declines and capital levels
become a larger portion of financing support. This could be beneficial to
Credco in the event the markets in which it traditionally borrows become
stressed as to pricing, liquidity, or both, which occurred in the period from
late 2007 through early 2009. The amended agreements could result in increased
volatility in the volume of Credcos purchases of receivables, and thus its
operating metrics that are volume-driven, including net income. Other measures
of profitability that Credco believes to be important to debt investors, such
as the fixed charge coverage ratio and margins, are generally not materially
impacted by a reduction in purchased receivables volume.

Under
the amended agreements, the Banks will decide whether to sell their charge card
receivables to Credco based primarily upon their consideration of the net cost
of funding through sales to Credco, maintenance of a consistently available
variety of funding sources, and the effect on the Banks required level
of capital from the decision to sell or not sell their charge card receivables.
As was the case under the original agreements, an overall decline in the quality
of receivables purchased from the Banks may result in a higher total expense
to Credco of purchasing the receivables.

The agreements between Credco and its affiliates
    provide that the parties intend that the transactions thereunder be conducted
    on an arms length basis and that, for example, the price at which receivables
    are sold to Credco or its subsidiaries be at fair market value (including
    consideration of changes in interest rates or significant changes in collectibility).
    Credco considers its expenses (such as interest costs, expected credit losses
    and any applicable service fees) in the calculation of the discount rate
    at which Credco offers to purchase receivables from the Banks as well as
    the margin it requires to maintain Credcos
  required minimum fixed charge coverage ratio of 1.25. As a result, Credcos
  level of profitability relative to its assets should not be materially
  negatively impacted by an increase in either the provisions for losses or the
  cost of funds. For additional discussion on the fixed charge coverage ratio,
  refer to page 27 below.

During
any period in which Credco is not purchasing charge card receivables from the
Banks, a higher proportion of its business will be made up of the purchase of
both charge and credit card receivables from outside the United States and U.S.
Corporate Card charge receivables than if it was purchasing receivables from
the Banks. The credit quality of receivables from outside the United States has
been generally comparable to that of U.S. receivables.

Credco
funds, either directly or indirectly through its consolidated subsidiaries,
cardmember receivables and loans of its American Express affiliates primarily
in one or more of the following ways:

|  |                                                                                                                                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------
| | purchases,
 without recourse, of cardmember receivables and loans directly from issuers
 of American Express cards (card issuers);       
|  |                                                                                                                                          
| | purchases of
participation interests from American Express Receivables Financing
 Corporation V LLC (RFC V);                             
|  |                                                                                                                                          
| | unsecured
 loans provided to affiliates, primarily other American Express bank
 subsidiaries; and                                        
|  |                                                                                                                                          
| | loans
 provided to affiliates that are collateralized by the underlying cardmember
     receivables and loans, transferred with recourse.

Where
Credco 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 changes in interest
rates and the collectibility of the receivables. New groups of cardmember
receivables are generally purchased net of reserve balances.

In
conjunction with TRS securitization program, Credco, through its wholly-owned
subsidiary, Credco Receivables Corporation (CRC), purchases participation
interests from RFC V, a wholly-owned subsidiary of TRS which receives an
undivided, pro rata interest in cardmember receivables transferred to the
American Express Issuance Trust (AEIT) by
TRS. TRS and its subsidiaries originate the receivables. AEIT is a special
purpose entity that is consolidated by RFC V.

3

---



Cardmember
loans are primarily funded by subsidiaries of TRS other than Credco, although
certain cardmember loans are purchased by Credco. These cardmember loans
consist of certain interest-bearing and discounted revolving loans generated by
cardmember spending on American Express credit cards issued in non-U.S.
markets.

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. In Australia
and the United Kingdom, Credco funds cardmember receivables and cardmember
loans principally through transfers of receivables with recourse from card
issuers, which are wholly-owned subsidiaries of TRS. In Mexico, Credco funds
cardmember receivables by acquiring such receivables with recourse from
American Express Company (Mexico) and funds cardmember loans through loans to
American Express Bank (Mexico), both of which are wholly-owned subsidiaries of
TRS. These local funding strategies result in Credco recording additional loans
to affiliates.

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

American
Express, as the parent of TRS, has agreed with Credco that it will take all
necessary steps to assure performance of certain TRS obligations under the
Receivables Agreement 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.

Current Economic Environment/Outlook

Credcos
results for 2010 reflected strong spending growth and improved credit
performance of the underlying cardmember receivables and loan portfolios at
American Express. Throughout the year, cardmember spending volumes grew both in
the United States and outside the United States, and across all of American
Express businesses. Cardmember spending levels in 2010 reached record levels
by the end of the year.

The
improving credit trends contributed to a significant reduction in loan and
receivable write-offs and in loss reserve levels over the course of 2010 when
compared to 2009. Despite the reduction in loss reserve levels, reserve
coverage ratios remain strong. It is expected that the year-over-year benefits
from improving credit trends will decrease over the course of 2011.

Despite
improvement in parts of the economic environment, challenges clearly remain for
American Express, both in the United States and in many other key markets.
These challenges include weak job creation, volatile consumer confidence,
uncertain consumer behavior, an uncertain housing market, and the regulatory
and legislative environment, including the uncertain impact of the CARD Act of
the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Reform Act) and of the proceeding against American Express recently
brought by the Department of Justice (DOJ), and certain state attorneys general
alleging a violation of the U.S. antitrust laws. Refer to the Forward-Looking
Statements and Risk Factors sections below.

4

---



Volume of Business

The
following table shows substantially all cardmember receivables and cardmember
loans purchased by Credco during each of the years indicated, together with
cardmember receivables and cardmember loans owned by Credco as of the end of
such years:

|           |  |                                                                                     |     |                                                 |   |       |  |      |     |          |   |       |  |   |   |  |   |    | 
|---------- |  | ----------------------------------------------------------------------------------- | --- | ----------------------------------------------- | - | ----- |  | ---- | --- | -------- | - | ----- |  | - | - |  | - | -- | 
|           |  |                                                                                     |     |                                                 |  
|(Billions) |  |                                                                                     |     |                                                
|           |  |                                                                                     |     |                                                 |  
|           |  | Volume of GrossReceivables
 and Loans PurchasedFor
 the Years Ended December 31,(a) |     | Receivables and Loans Owned
 as of December 31, |  
|           |  |                                                                                     |     |                                                 |  
|Year       |  | U.S.                                                                                |     | Non-U.S.                                        |   | Total |  | U.S. |     | Non-U.S. |   | Total | 
|           |  |                                                                                     |     |                                                 |   |       |  |      |     |          |   |       | 
|2010       |  | $                                                                                   | 124 |                                                 | $ | 35    |  | $    | 159 |          | $ | 10    |  | $ | 3 |  | $ | 13 | 
|2009       |  |                                                                                     | 86  |                                                 |   | 32    |  |      | 118 |          |   | 7     |  |   | 3 |  |   | 10 | 
|2008       |  |                                                                                     | 204 |                                                 |   | 38    |  |      | 242 |          |   | 8     |  |   | 3 |  |   | 11 | 
|2007       |  |                                                                                     | 262 |                                                 |   | 31    |  |      | 293 |          |   | 24    |  |   | 3 |  |   | 27 | 
|2006       |  |                                                                                     | 251 |                                                 |   | 30    |  |      | 281 |          |   | 25    |  |   | 3 |  |   | 28 | 
|           |  |                                                                                     |     |                                                 |   |       |  |      |     |          |   |       |  |   |   |  |   |    | 

|    |                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In addition to the above
 activity, Credco also purchased new groups of cardmember receivables,
 resulting from participation interests purchased from affiliates, totaling
 $3.6 billion, $1.8 billion, $1.9 billion, $0.7 billion and $2.0 billion in
 2010, 2009, 2008, 2007 and 2006, respectively.

The
increase in volumes of receivables and loans purchased during 2010, when
compared to 2009, is primarily due to the increase in purchases resulting from
higher cardmember spending in 2010 compared to the same period a year ago.

Cardmember Receivables and Cardmember Loans

As
of December 31, 2010 and 2009, Credco owned $12.4 billion and $9.9 billion of
cardmember receivables, respectively. Cardmember receivables represent amounts
due from charge card customers and are recorded at the time they are purchased
from the seller. Included in cardmember receivables are CRCs purchases of the
participation interests from RFC V in conjunction with TRS securitization
program. As of December 31, 2010 and 2009, CRC owned approximately $3.7 billion
and $2.9 billion, respectively, of such participation interests. Cardmember
receivables owned as of December 31, 2010 increased approximately $2.5 billion
from December 31, 2009, primarily as a result of an increase in cardmember
receivables purchased due to increased cardmember spending as well as an
increase in the participation interest in RFC Vs sellers interest in the AEIT
for the year ended December 31, 2010.

As
of December 31, 2010 and 2009, Credco owned gross cardmember loans totaling
$380 million and $474 million, respectively. These loans consist of certain
interest-bearing receivables comprised of American Express and American Express
joint venture credit card receivables.

5

---



The
following table summarizes selected information related to the cardmember
receivables portfolio for the years ended December 31:

|                                                                      |  |   |        |   |   |       |   |   |        |  
|--------------------------------------------------------------------- |  | - | ------ | - | - | ----- | - | - | ------ | -
|                                                                      |  |   |        |   |   |       |   |   |        |  
|(Millions,
 except percentages)                                       |  |   | 2010   |   |   | 2009  |   |   | 2008   |  
|                                                                      |  |   |        |   |   |       |   |   |        |  
|Total gross cardmember
 receivables (a)                               |  | $ | 12,373 |   | $ | 9,893 |   | $ | 10,859 |  
|Loss reserves - cardmember
 receivables                               |  | $ | 112    |   | $ | 141   |   | $ | 204    |  
|Loss reserves as a % of
 receivables (a)(d)                           |  |   | 0.9    | % |   | 1.4   | % |   | 1.9    | %
|Average life of cardmember
 receivables (# in days)(b)                |  |   | 29     |   |   | 29    |   |   | 33     |  
|                                                                      |  |   |        |   |   |       |   |   |        |  
|U.S. Consumer and Small
 Business gross cardmember receivables (a)    |  | $ | 3,497  |   | $ | 2,744 |   | $ | 2,444  |  
|30 days past due as a % of
 total                                     |  |   | 1.2    | % |   | 1.5   | % |   | 2.6    | %
|Average receivables                                                   |  | $ | 3,860  |   | $ | 1,899 |   | $ | 11,413 |  
|Write-offs, net of
 recoveries                                        |  | $ | 54     |   | $ | 54    |   | $ | 1,047  |  
|Net write-off rate (a)(c)                                             |  |   | 1.4    | % |   | 2.9   | % |   | 9.2    | %
|                                                                      |  |   |        |   |   |       |   |   |        |  
|International and Global
 Commercial gross cardmember receivables (d) |  | $ | 8,876  |   | $ | 7,149 |   | $ | 8,415  |  
|90 days past billing as a %
 of total (d)                             |  |   | 0.9    | % |   | 1.5   | % |   | 2.8    | %
|Write-offs, net of recoveries
 (d)                                    |  | $ | 115    |   | $ | 186   |   | $ | 146    |  
|Net loss ratio (d)(e)                                                 |  |   | 0.10   | % |   | 0.20  | % |   | 0.12   | %
|                                                                      |  |   |        |   |   |       |   |   |        |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In the fourth quarter of
 2008, American Express revised the time period in which past due cardmember
 receivables for its U.S. Card Services segment are written off to 180 days
 past due or earlier, consistent with applicable bank regulatory guidance.
 Previously, these cardmember receivables were written off when 360 days past
 billing. A cardmember is considered 360 days past billing if payment has not
 been received within 360 days of the cardmembers billing statement date.
 A cardmember account becomes past due if payment is not received within 30 days
 after the billing statement date. Credcos receivables subject to 180 days
 past due write-off and the related net write-off rate, which reflects
 write-offs, net of recoveries, expressed as a percentage of the average
 amount of cardmember receivables owned by Credco at the beginning of the year
 and at the end of each month in each of the years indicated, are reflected
 above, and includes $257 million of net write-offs in 2008 as a result of the
 methodology change. The impact of the methodology change to 2008 activity was
 $103 million which would have resulted in a net write-off rate of 7.8
 percent. Refer to Notes 3 and 4 to the Consolidated Financial Statements for
 further discussion.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(b) | Represents the average
 life of cardmember receivables owned by Credco, based upon the ratio of the
 average amount of both billed and unbilled receivables owned by Credco at the
 end of each month, during the years indicated, to the volume of cardmember
 receivables purchased by Credco.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(c) | Credcos write-offs, net
 of recoveries, are expressed as a percentage of the average amount of
 cardmember receivables owned by Credco at the beginning of the year and at
 the end of each month in each of the years indicated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(d) | Effective January 1,
 2010, American Express revised the time period in which past due cardmember
 receivables for its International Card Services and Global Commercial
 Services segments are written off to 180 days past due or earlier, consistent
 with applicable bank regulatory guidance and the write-off methodology
 adopted for U.S. Consumer and Small Business receivables in the fourth
 quarter of 2008. Previously, these cardmember receivables were written off
 when 360 days past billing. Therefore, the net write-offs for the first
 quarter of 2010 include net write-offs resulting from this write-off
 methodology change, which decreased the 90 days past billing metrics and
 increased write-offs for these cardmember receivables but did not have a
 significant impact on provisions for losses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(e) | Credcos write-offs, net
 of recoveries, are expressed as a percentage of the volume of cardmember
 receivables purchased by Credco in each of the years indicated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

6

---



Prior
to 2008, cardmember receivables were written off when 360 days past billing.
The following table summarizes selected information related to the cardmember
receivables portfolio for the years ended December 31, 2007 and 2006:

|                                                        |  |   |        |   |   |        |  
|------------------------------------------------------- |  | - | ------ | - | - | ------ | -
|                                                        |  |   |        |   |   |        |  
|Years ended December 31, (Millions, except percentages) |  |   | 2007   |   |   | 2006   |  
|                                                        |  |   |        |   |   |        |  
|Total cardmember
 receivables                           |  | $ | 26,333 |   | $ | 27,506 |  
|90 days past billing as a %
 of total                   |  |   | 4.1    | % |   | 3.3    | %
|Loss reserves                                           |  | $ | 831    |   | $ | 739    |  
|as a % of receivables                                   |  |   | 3.2    | % |   | 2.7    | %
|Write-offs, net of
 recoveries                          |  | $ | 658    |   | $ | 525    |  
|Net loss ratio                                          |  |   | 0.23   | % |   | 0.19   | %
|Average life of cardmember
 receivables (in days)       |  |   | 34     |   |   | 32     |  
|                                                        |  |   |        |   |   |        |  

Reserves for Cardmember
Receivables and Cardmember Loans

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

|                                                                                       |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|-------------------------------------------------------------------------------------- |  | - | ---- | - | - | ---- | - | - | ----- | - | - | ---- | - | - | ---- | -
|                                                                                       |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|Years Ended December 31,(Millions)                                                     |  |   | 2010 |   |   | 2009 |   |   | 2008  |   |   | 2007 |   |   | 2006 |  
|                                                                                       |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|Reserve for losses:                                                                    |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|Balance, January 1                                                                     |  | $ | 160  |   | $ | 218  |   | $ | 841   |   | $ | 749  |   | $ | 686  |  
|Additions:                                                                             |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|Provisions for losses                                                                  |  |   | 128  |   |   | 214  |   |   | 641   |   |   | 842  |   |   | 589  |  
|Other credits (a)                                                                      |  |   | 36   |   |   | 12   |   |   | 46    |   |   | 14   |   |   | 11   |  
|Deductions:                                                                            |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|Accounts written-off, net (b)(c)                                                       |  |   | 179  |   |   | 263  |   |   | 1,204 |   |   | 666  |   |   | 532  |  
|Other charges (d)                                                                      |  |   | 24   |   |   | 21   |   |   | 106   |   |   | 98   |   |   | 5    |  
|                                                                                       |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|Balance, December 31                                                                   |  | $ | 121  |   | $ | 160  |   | $ | 218   |   | $ | 841  |   | $ | 749  |  
|                                                                                       |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  
|Reserve for losses as a % of gross cardmember receivables and loans
 owned at year-end |  |   | 0.9  | % |   | 1.5  | % |   | 1.9   | % |   | 3.2  | % |   | 2.7  | %
|                                                                                       |  |   |      |   |   |      |   |   |       |   |   |      |   |   |      |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | 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. New groups of cardmember receivables and loans purchased
 totaled $3.6 billion, $1.8 billion, $1.9 billion, $0.7 billion and $2.0
 billion in 2010, 2009, 2008, 2007 and 2006, respectively.                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(b) | Includes recoveries on
 accounts previously written off of $119 million, $75 million, $144 million,
 $175 million and $158 million in 2010, 2009, 2008, 2007 and 2006,
 respectively. As described above, effective January 1, 2010, Credco revised
 the time period in which past due International and Global Commercial
 cardmember receivables are written off to when they are 180 days past due or
 earlier, consistent with applicable bank regulatory guidance. Previously,
 International and Global Commercial Services cardmember receivables were
 written off when they were 360 days past billing. Therefore, the net
 write-offs for the year ended December 31, 2010 included net write-offs
 resulting from this write-off methodology change.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(c) | The net write-offs for
 2008 include approximately $257 million resulting from the 180 days write-off
 methodology change for U.S. Consumer and Small Business cardmember
 receivables discussed previously. The net write-offs for 2010 include
 write-offs resulting from the 180 days write-off methodology change for
 International and Global Commercial Services cardmember receivables.                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(d) | Primarily relates to
 reserve balances applicable to certain groups of cardmember receivables and
 participation interests sold to affiliates. Cardmember receivables and
 participation interests sold to affiliates totaled $2.7 billion, $2.3
 billion, $2.0 billion, $2.1 billion and $0.4 billion in 2010, 2009, 2008,
 2007 and 2006, respectively.                                                                                                                                                                                                                                                                                                                                                                                                      

7

---



Loans to Affiliates

Credcos
loans to affiliates represent fixed and floating-rate interest-bearing
intercompany borrowings by other wholly-owned subsidiaries of TRS. The
components of loans to affiliates as of December 31 were as follows:

|                                           |  |   |        |  |   |       
|------------------------------------------ |  | - | ------ |  | - | ------
|                                           |  |   |        |  |   |       
|(Millions)                                 |  |   | 2010   |  |   | 2009  
|                                           |  |   |        |  |   |       
|TRS Subsidiaries:                          |  |   |        |  |   |       
|American Express Australia Limited         |  | $ | 3,935  |  | $ | 3,687 
|Amex Bank of Canada                        |  |   | 2,969  |  |   | 2,728 
|American Express Services Europe Limited   |  |   | 2,698  |  |   | 2,710 
|American Express International, Inc.       |  |   | 519    |  |   | 221   
|American Express Co. (Mexico) S.A. de C.V. |  |   | 483    |  |   | 432   
|American Express Bank (Mexico) S.A.        |  |   | 383    |  |   | 349   
|                                           |  |   |        |  |   |       
|Total (a)                                  |  | $ | 10,987 |  | $ | 10,127
|                                           |  |   |        |  |   |       

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | As of December 31, 2010,
 Credco had $11.0 billion of outstanding loans to affiliates, of which
 approximately $7.6 billion are collateralized by the underlying cardmember
 receivables transferred with recourse and the remaining $3.4 billion are
 uncollateralized loans primarily with affiliated banks. As of December 31,
 2009, Credco had $10.1 billion of outstanding loans to affiliates, of which
 approximately $7.0 billion are collateralized by the underlying cardmember
 receivables transferred with recourse and the remaining $3.1 billion are
 uncollateralized loans primarily with affiliated banks.

Due to/from Affiliates

As
of December 31, 2010 and 2009, amounts due to affiliates were $1.7 billion and
$864 million, respectively. As of December 31, 2010 and 2009, amounts due from
affiliates were $4.0 billion and $5.8 billion, respectively. These amounts
relate primarily to timing differences resulting from the purchase of
cardmember receivables net of remittances from TRS, as well as to operating
activities.

Short-term Debt to Affiliates

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

|                                              |  |   |       |  |   |      
|--------------------------------------------- |  | - | ----- |  | - | -----
|                                              |  |   |       |  |   |      
|(Millions)                                    |  |   | 2010  |  |   | 2009 
|                                              |  |   |       |  |   |      
|AE Exposure Management
 Ltd.                  |  | $ | 2,789 |  | $ | 2,087
|American Express Holdings
 (Netherlands) C.V. |  |   | 295   |  |   | 294  
|American Express Swiss
 Holdings              |  |   | 191   |  |   | 130  
|National Express Company,
 Inc.               |  |   | 158   |  |   | 142  
|American Express Europe
 Limited              |  |   | 100   |  |   | 150  
|American Express                              |  |   | 11    |  |   | 948  
|Other                                         |  |   | 237   |  |   | 142  
|                                              |  |   |       |  |   |      
|Total                                         |  | $ | 3,781 |  | $ | 3,893
|                                              |  |   |       |  |   |      

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

Sources of Funds

Credcos
business is financed by borrowings consisting principally of issuances of U.S.
and non-U.S. dollar term debt, borrowings under bank credit facilities in
certain international markets, intercompany borrowings, and issuances of
commercial paper, as well as cash provided through operations. Since September
2008, Credcos reliance on commercial paper as a funding source has diminished
considerably. This short-term source has not been replaced with other types of
short-term debt as Credcos funding needs have decreased due to the reduction
of receivable purchases resulting from the amendment to the Receivables
Agreements as discussed previously. Credco has not issued asset-backed
securities in the past three years or in any previous years (although Credco
has the ability to sell receivables to TRS, which in turn can securitize them).
For a more detailed discussion of Credcos funding strategies, refer to
Managements Discussion and Analysis of Financial Condition and Results of
Operations ― Consolidated Capital Resources and Liquidity ― Funding
Strategy.

8

---



The
weighted-average effective 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 as follows:

|     |  |  |                                            |  
|---- |  |  | ------------------------------------------ | -
|     |  |  |                                            |  
|Year |  |  | Weighted-Average
 Effective
 Interest Rate |  
|     |  |  |                                            |  
|2010 |  |  | 2.39                                       | %
|2009 |  |  | 2.15                                       | %
|2008 |  |  | 3.95                                       | %
|2007 |  |  | 5.26                                       | %
|2006 |  |  | 4.63                                       | %
|     |  |  |                                            |  

Refer
to Notes 6 and 10 to the Consolidated Financial Statements for additional
information about Credcos short-term and long-term debt, including lines of
credit.

Foreign Operations

Refer
to Notes 1, 8 and 14 to the Consolidated Financial Statements for information
about Credcos foreign exchange translation and operations in different
geographic regions.

Employees

As of December 31, 2010 and
2009, Credco had 21 and 17 employees, respectively.

9

---



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

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

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

The global money and capital markets, while demonstrating generally
improved conditions, remain susceptible to volatility and disruption, which
could negatively impact market liquidity conditions.

Credco relies on liquidity to pay operating expenses, interest on debt
and dividends on capital stock and to repay maturing liabilities. Without
sufficient liquidity, Credco could be forced to limit its business growth or
curtail operations. The principal sources of Credcos liquidity are payments
from cardmembers, cash and cash equivalents, debt instruments such as unsecured
medium- and long-term notes and assets that could be sold to TRS for securitizations,
and long-term committed bank borrowing facilities in certain non-U.S. markets,
as well as access to additional liquidity in the form of cash and readily
marketable securities held by certain affiliates through intercompany loan
agreements.

Notwithstanding Credcos solid financial position, Credco is not immune
from pressures experienced broadly across the financial markets. The fragility
of the credit markets and the current economic and regulatory environment have
impacted financial services companies. Although the market for Credcos
unsecured term debt has improved, there is no assurance that the markets will
be open in the future. Therefore, Credcos ability to obtain financing in the
debt capital markets for unsecured term debt is dependent on a continuation of
investor demand. Credco also would have less flexibility in accessing the
commercial paper market as a short-term funding vehicle in the event of a
downgrading in its short-term debt rating and volatility in the commercial
paper market generally.

In the event that current sources of liquidity, including internal
sources, do not satisfy Credcos needs, it could be required to seek additional
financing. The availability of additional financing will depend on a variety of
factors such as market conditions, the general availability of credit, the
overall availability of credit to the financial services industry, Credcos
debt credit ratings (which were downgraded in April 2009 by two of the major
rating agencies) and credit capacity, as well as the possibility that lenders
could develop a negative perception of Credcos long- or short-term financial
prospects if it incurs large credit losses or if the level of its business
activity decreased due to an economic downturn or due to perceived operational
risk. Similarly, Credcos access to funds may be impaired if regulatory
authorities or rating agencies take negative actions against Credco.

While American Express and Credco have experienced positive credit
trends since the latter half of 2009, if the performance of Credcos charge
card and credit card receivables were to weaken through increasing
delinquencies and write-offs, Credcos long-term and short-term debt ratings
could be downgraded and its access to capital could be materially adversely
affected and its cost of capital could increase.

Disruptions, uncertainty or volatility in the capital and credit
markets may also limit Credcos access to capital required to operate its
business. Such market conditions may limit its ability to replace, in a timely
manner, maturing liabilities and access the capital necessary to grow its
business. As such, Credco may be forced to delay raising capital, or bear an
unattractive cost to raise capital, which could decrease profitability and
significantly reduce financial flexibility.

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

Difficult conditions
in the global capital markets and the economy generally may materially
adversely affect Credcos business and results of operations.

Credcos results of operations are materially affected by conditions in
the global capital markets and the economy in general, both in the United
States and elsewhere around the world.

Ongoing concerns over the availability and cost of credit, the mortgage
and real estate markets, sovereign debt crises, fear of a double-dip recession
and geopolitical issues have contributed to uncertain expectations for the
economy and the markets going forward. These factors, combined with still
relatively low levels of business and consumer confidence and relatively high
levels of unemployment, continue to impact global economies.

10

---



This environment has had, and may continue to have, an adverse effect
on Credco, in part because it is very dependent upon consumer and business
behavior. If the economy were to worsen, customer behaviors could change
further. Credcos revenue growth is likely to decline in such circumstances
and, in certain instances, revenues may decrease, and its profit margins could
erode. In addition, in the event of extreme prolonged market adversity, such as
the global credit crisis and economic slowdown, Credco could incur significant
losses.

Factors such as consumer spending, business investment, government
spending, interest rates, the volatility and strength of the capital markets
and inflation all affect the business and economic environment and, ultimately,
Credcos profitability. An economic downturn characterized by higher
unemployment, lower family income, lower corporate earnings, lower business
investment and lower consumer spending is likely to materially and adversely
affect Credcos business, results of operations and financial condition.
Furthermore, the factors discussed above may cause Credcos earnings, credit
metrics and margins to fluctuate and diverge from expectations of analysts and
investors, who may have differing assumptions regarding their impact on
Credcos business.

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

Terrorist attacks, natural disasters or other catastrophic events may
have a negative effect on Credcos business and infrastructure, including its
information technology systems. Because Credco derives a portion of its
revenues from travel-related spending, its business will be sensitive to safety
concerns, and thus is likely to decline during periods in which travelers
become concerned about safety issues or when travel might involve health-related
risks.

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

The impairment of
other financial institutions could adversely affect Credco.

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

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

Although Credcos long-term debt is currently rated investment grade by
the major rating agencies, the ratings of that debt were downgraded during the
second quarter of 2009 by Moodys Investors Services (Moodys) and Standard
& Poors (S&P). The rating agencies regularly evaluate Credco, and their
ratings of Credcos long-term and short-term debt are based on a number of
factors, including Credcos financial strength, as well as factors not entirely
within Credcos control, including conditions affecting the financial services
industry generally and the wider state of the economy. There can be no
assurance that Credco will maintain its current credit ratings. Failure to
maintain those ratings could, among other things, limit Credcos access to the
capital markets and adversely affect the cost and other terms upon which Credco
is able to obtain funding and increase Credcos cost of capital.

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

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

During 2010, over 53 percent of Credcos revenue was generated from
activities outside the United States. Credco is exposed to foreign exchange
risk from its international operations, and some of the revenue it generates
outside the United States is subject to unpredictable and indeterminate
fluctuations if the values of other currencies change relative to the U.S.
dollar. Resulting exchange gains and losses are included in Credcos net
income. Furthermore, Credco may become subject to exchange control regulations
that might restrict or prohibit the conversion of Credcos other revenue currencies into U.S. dollars. The occurrence of any of
these events or circumstances could decrease the revenues Credco receives from
its international operations and have a material adverse effect on Credcos
business.

11

---



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

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

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

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

Credco must also effectively manage the 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 primarily
exposed to market risk from the impact of interest rate movements on its
borrowings and investment portfolios. If the rate of interest Credco pays on
its borrowings increases, this will lead to Credco increasing the discount rate
at which it offers to purchase receivables in order to achieve the minimum
required 1.25 fixed charge coverage ratio. To the extent this increased price
is not acceptable to the seller, the amount of receivables purchased may
decline, which would result in a lower net income to Credco.

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

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

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

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

12

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Credco is an
indirect wholly-owned subsidiary of American Express and therefore subject to
strategic decisions of American Express and affected by American Express
performance.

Credco is fundamentally affected by its relationship with American
Express. As an indirect wholly-owned subsidiary of American Express, Credco is
managed by officers and employees of American Express and Credco is subject to
a wide range of possible strategic decisions that American Express may make
from time to time. Those strategic decisions could include the level and types
of financing Credco provides to support the business of American Express and
its other subsidiaries and the level and types of transactional or other
support made available to Credco by American Express. In addition,
circumstances affecting American Express can significantly affect Credco. For
example, Credcos debt ratings are closely tied to those of American Express,
and when rating agencies take actions regarding American Express ratings, they
may take the same actions with respect to Credcos ratings. Significant changes
in American Express strategy or its relationship with Credco or material
adverse changes in the performance of American Express or its other
subsidiaries could have a material adverse effect on Credco. The outstanding
debt and other securities of Credco are not obligations of American Express,
TRS or other American Express subsidiaries.

Credco is an
indirect wholly-owned subsidiary of American Express and any arrangements or
agreements between the two entities may have different terms than would have
been negotiated by independent, unrelated parties.

Credco is an indirect wholly-owned subsidiary of American Express. As a
result, the arrangements and agreements between Credco and its subsidiaries, on
the one hand, and American Express and its other subsidiaries, principally the
card issuers, on the other hand, may have different terms and provisions than
would have been negotiated by independent, unrelated parties. The principal
agreements between the parties are the receivables purchase agreements between
Credco, on the one hand, and each of the Banks and TRS, on the other hand.
Credco or its subsidiaries are also parties to agreements with card issuers in
various international markets for the purchase or transfer with recourse of
card receivables and for unsecured loans to card issuers. The agreements
between Credco and the card issuers provide that the parties intend that the
transactions thereunder be conducted on an arms length basis and that, for
example, the price at which receivables are sold to Credco or its subsidiaries
be at fair market value (including consideration of changes in interest rates
or significant changes in collectibility). While there can be no assurance that
the terms of these arrangements are the same as would be negotiated between
independent, unrelated parties, Credco and its subsidiaries are prohibited,
under the terms of the indenture governing Credcos senior debt securities,
from engaging in transactions with any other American Express entities (such as
the card issuers) on a basis that is materially less favorable to Credco or its
subsidiaries than would be the case if the transaction were with an unrelated
third party.

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
receivables purchase agreements with 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 the revenues and net income of Credco and AEOCC.

In October 2008, Credco and each of the Banks mutually agreed to amend
their respective receivables purchase agreements to allow the Banks
flexibility, from time to time, to sell receivables to Credco or to retain the
receivables and fund them from their own sources. However, the amended
agreements require the Banks to sell either all or none of their charge card
receivables to Credco at any given time. The Banks, therefore, may not direct
receivables with particular risk characteristics for sale to Credco. The
amendments have led to a material reduction in Credcos purchases of
receivables from the Banks and could result in increased volatility in the
volume of Credcos purchases of receivables from time to time. This in turn
could increase the volatility of Credcos operating metrics that are
volume-driven, including discount revenue, interest expense and net income.

13

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The Credit Card
Accountability Responsibility and Disclosure Act of 2009 will significantly
impact Credcos business practices and could have a material adverse effect on
Credcos results of operations.

The CARD Act required American Express to make fundamental changes to
many of American Express business practices, including marketing,
underwriting, pricing and billing. Among other things, the CARD Act prohibits
an issuer from increasing the annualized percentage rate (APR) on outstanding
balances (with limited exceptions), requires additional account disclosures,
provides consumers with the right to opt out of significant changes to account
terms, and restricts penalty fees and charges that may be imposed by an issuer.
Most of the requirements of the CARD Act became effective in February 2010.
Additional amendments to Regulation Z revising the open-end credit disclosure
requirements became effective on July 1, 2010.

Since August 22, 2010, the CARD Act, among other
    things, requires that penalty fees be reasonable and proportional. Also,
    since August 22, 2010, the CARD Act requires issuers to periodically reevaluate
    APR increases to determine if a decrease is appropriate. The first of these
    reevaluations was required to be completed in February 2011. The obligation
    to periodically reevaluate APR increases is ongoing, and it is uncertain
    how these provisions will be interpreted or amended by the new Consumer Financial
    Protection Bureau (Bureau). Therefore, while the ultimate impact of this
    requirement is uncertain at this time, it could have a significant impact
    on Credcos results of
operations.

While American Express has made certain changes to its product terms
and practices that are designed to mitigate the impact of the changes required
by the CARD Act, there is no assurance that it will be successful. The
long-term impact of the CARD Act on American Express business practices and
revenues will depend upon a number of factors, including its ability to
successfully implement its business strategies, consumer behavior and the
actions of American Express competitors, which are difficult to predict at
this time. In the event the actions undertaken to date by American Express to
offset the impact of the new legislation and regulations are not ultimately
effective, they could have a material adverse effect on American Express
results of operations. This, in turn, may also directly impact Credcos results
of operations.

The Dodd-Frank Wall
Street Reform and Consumer Protection Act (Dodd-Frank Reform Act) may have a
significant adverse impact on Credcos business, results of operations and
financial condition.

In July 2010, President Obama signed into law the Dodd-Frank Reform
Act. The Dodd-Frank Reform Act, as well as regulations promulgated thereunder,
could have a significant adverse impact on American Express business, results
of operations and financial condition by, for example, requiring American
Express to change its business practices, requiring American Express to comply
with more stringent capital, liquidity and leverage ratio requirements,
limiting American Express ability to pursue business opportunities, imposing
additional costs on American Express (including increased compliance costs and
increased costs of funding raised through the issuance of asset-backed
securities), limiting the fees American Express can charge for services and
impacting the value of American Express assets.

The Dodd-Frank Reform Act will result in increased scrutiny and
oversight of consumer financial services and products, primarily through the
establishment of the Consumer Financial Protection Bureau within the Federal
Reserve. The Bureau will have broad rulemaking and enforcement authority over
providers of credit, savings and payment services and products and authority to
prevent unfair, deceptive or abusive practices. The Bureau will write
regulations under federal consumer financial protection laws, and enforce those
laws against and examine large financial institutions like American Express,
Centurion Bank and American Express Bank FSB for compliance. The Bureau will
collect fines and provide consumer restitution in the event of violations,
engage in consumer financial education, track consumer complaints, request data
and promote the availability of financial services to underserved consumers and
communities. Depending on how the Bureau functions and its areas of focus, it
could have a material adverse impact on American Express businesses. In
addition to increasing card issuers compliance costs and potentially delaying
American Express ability to respond to marketplace changes, this could result
in requirements to alter American Express products and services that would make
its products less attractive to consumers and impair its ability to offer them
profitably. The impact this new regulatory regime will have on American
Express business is uncertain at this time and will depend on, among other
things, the timing of the Bureaus assumption of its authority from other
governmental agencies, which is expected to occur by July 21, 2011.

Under the Dodd-Frank Reform Act, the Federal Reserve is authorized to
regulate interchange fees charged by payment card issuers for transactions in
which a person uses a debit or general-use prepaid card, and to enforce a new
statutory requirement that such fees be reasonable and proportional to the
actual cost of a transaction to the issuer, with specific allowances for the
costs of fraud prevention, as well as to prohibit exclusive network routing
restrictions for electronic debit transactions. Additionally, the Dodd-Frank
Reform Act prohibits payment card networks from restricting merchants from
offering discounts or incentives to encourage customers to pay with particular
forms of payment such as cash, check, credit or debit card, provided that such offers do not
discriminate on the basis of the network or issuer. Further, to the extent
required by federal law or applicable state law, the discount or incentive must
be offered to all prospective buyers and must be clearly and conspicuously
disclosed. The Dodd-Frank Reform Act also permits U.S. merchants to establish
minimum purchase amounts of no more than $10 for credit card purchases, provided
that the merchants do not discriminate between networks or issuers. Federal
government agencies and institutions of higher learning also are permitted to
establish maximum amounts for credit card purchases provided they do not
discriminate between networks or issuers. In addition, most interest rate and
currency swaps will be required to be exchanged-traded, which may increase
collateral posting requirements for Credco.

14

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Many provisions of the Dodd-Frank Reform Act, including numerous
provisions not described above, require the adoption of rules to implement. In
addition, the Dodd-Frank Reform Act mandates multiple studies, which could
result in additional legislation or regulatory action. Therefore, the ultimate
consequences of the Dodd-Frank Reform Act and its implementing regulations on
American Express and Credcos business, results of operations and financial
condition remain uncertain.

Ongoing legal
proceedings regarding American Express Companys anti-steering and
surcharging policies could require changes to those policies that could result
in a material loss of revenue or increased expenses, substantial monetary
judgments and/or damage to American Express global reputation and brand.

The DOJ, along with certain state attorneys general have recently
brought an action against American Express, MasterCard International
Incorporated (MasterCard) and Visa, Inc. (Visa), alleging a violation of
Section 1 of the Sherman Antitrust Act. The complaint alleges that the
defendants policies prohibiting merchants from steering a customer to use
another networks card, another type of card or another method of payment
(anti-steering and non-discrimination rules) violate the antitrust laws.
The complaint alleges that the defendants participate in two distinct markets,
a General Purpose Card network services market, and a General Purpose Card
network services market for merchants in travel and entertainment (T&E)
businesses. The complaint contends that each of the defendants has market
power in the alleged two markets. The complaint seeks a judgment permanently
enjoining the defendants from enforcing their anti-steering and
non-discrimination rules. The complaint does not seek monetary damages.
Concurrent with the filing of the complaint, the plaintiffs and Visa and
MasterCard announced they had reached an agreement settling the complaint
against them by agreeing to modifications in their rules prohibiting merchants
that accept their cards from steering customers to use another networks card,
another type of card or another method of payment.

An adverse outcome in any of these proceedings against American Express
could materially and adversely impact the profitability of American Express,
require it to change its policies in a way that could expose American Express
card products to steering or other forms of discrimination at the point of
sale, result in the imposition of substantial monetary damages and/or damage
American Express global reputation and brand. Even if American Express were
not required to change its policies, changes in policies agreed to by Visa and
MasterCard pursuant to their settlement agreement with the DOJ and state
attorneys general, or other changes to their policies or practices as a result
of the proceedings brought by merchants against them, could subject American
Express to market pressures that force it to make certain changes to its own
policies and practices, which could materially and adversely impact American
Express profitability and affect Credcos business of funding American Express
card receivables and revolving loans.

15

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Other Reporting Matters

Accounting Developments

Refer to the
Recently Issued Accounting Standards section of Note 1 to the Consolidated
Financial Statements.

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 or furnished to the
Securities and Exchange Commission (SEC) and in other documents. In addition,
from time to time, Credco, through its management, may make oral
forward-looking statements. Forward-looking statements are subject to risks and
uncertainties, including those identified above and below, which could cause
actual results to differ materially from such statements. The words believe,
expect, anticipate, optimistic, intend, plan, aim, will, may,
should, could, would, likely and similar expressions are intended to
identify forward-looking statements. Credco cautions you that the risk factors
described above and other factors described below are not exclusive. There may
also be other risks that Credco is unable to predict at this time that may
cause actual results to differ materially from those in forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are made.
Credco undertakes no obligation to update or revise any forward-looking
statements.

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

|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | credit trends, which will depend in part on the economic environment,
 including, among other things, the housing market and the rates of
 bankruptcies, which can affect spending on card products and debt payments by
 individual and corporate customers;                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | the effectiveness of Credcos risk management policies and
 procedures, including Credcos ability to accurately estimate the provisions
 for losses in Credcos outstanding portfolio of cardmember receivables and
 loans;                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | fluctuations in foreign currency exchange rates;                                                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | negative changes in Credcos credit ratings, which could result in
 decreased liquidity and higher borrowing costs;                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | changes in laws or government regulations affecting American
 Express business, including the potential impact of regulations adopted by
 federal bank regulators relating to certain credit and charge card practices,
 the impact of the CARD Act, and the impact of the Dodd-Frank Reform Act,
 which is subject to further extensive rulemaking, the implications of which
 are not fully known at this time;
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | the effect of fluctuating interest rates, which could affect Credcos
 borrowing costs;                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | the impact on American Express business resulting from continuing
 geopolitical uncertainty;                                                                                                                                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | the impact on American Express business that could result from
 litigation such as class actions or proceedings brought by governmental and
 regulatory agencies (including the lawsuit filed against American Express by
 the DOJ and certain state attorneys general);                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Credcos ability to satisfy its liquidity needs and execute on its
 funding plans, which will depend on, among other things, Credcos future
 business growth, Credcos credit ratings, market capacity and demand for
 securities offered by Credco, performance by Credcos counterparties under
 its bank credit facilities and other lending facilities, and regulatory
 changes; and                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Credcos results of operations being adversely impacted by various
 proposals to reform the taxation of income earned by U.S. companies
 international business operations and by other legislative action or
 inaction, including the potential failure of the United States Congress to
 extend the active financing exception to Subpart F of the Internal Revenue
 Code.                                     

16

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|                                                                                                                                                                                                                                                       |                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------
|Item 1B.                                                                                                                                                                                                                                               | UNRESOLVED STAFF COMMENTS
|                                                                                                                                                                                                                                                       |                          
|Not
 applicable.                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                       |                          
|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.                                                                                                                                                                                                                                                | RESERVED                 

17

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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 $260 million and $400 million to TRS in
2010 and 2009, respectively. For information about limitations on Credcos
ability to pay dividends, refer to Note 7 to the Consolidated Financial
Statements.

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

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

|                                               |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|---------------------------------------------- |  | ---- | ------ | ---- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | - | ------
|                                               |  |      |        |      |   |        |  |      |        |     
|(Millions)                                     |  | 2010 |        | 2009 |   | 2008   |  | 2007 |        | 2006
|                                               |  |      |        |      |   |        |  |      |        |     
|Income Statement Data                          |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Revenues                                       |  | $    | 980    |      | $ | 1,215  |  | $    | 3,230  |      | $ | 3,854  |  | $ | 3,011 
|Provisions for losses, net of recoveries       |  |      | 128    |      |   | 214    |  |      | 641    |      |   | 842    |  |   | 589   
|Interest expense (including to affiliates)     |  |      | 598    |      |   | 629    |  |      | 1,618  |      |   | 2,046  |  |   | 1,614 
|Income tax (benefit) provision                 |  |      | (24    | )    |   | 8      |  |      | 132    |      |   | 60     |  |   | 95    
|Net income                                     |  |      | 348    |      |   | 362    |  |      | 864    |      |   | 725    |  |   | 622   
|Balance Sheet Data                             |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       
|Cash and cash equivalents                      |  | $    | 988    |      | $ | 304    |  | $    | 8,855  |      | $ | 2,925  |  | $ | 737   
|Gross
 cardmember receivables                  |  |      | 12,373 |      |   | 9,893  |  |      | 10,859 |      |   | 26,233 |  |   | 27,506
|Reserves for
 losses, cardmember receivables   |  |      | 112    |      |   | 141    |  |      | 204    |      |   | 831    |  |   | 739   
|Gross
 cardmember loans                        |  |      | 380    |      |   | 474    |  |      | 498    |      |   | 403    |  |   | 356   
|Reserves for
 losses, cardmember loans         |  |      | 9      |      |   | 19     |  |      | 14     |      |   | 10     |  |   | 10    
|Loans to
 affiliates                           |  |      | 10,987 |      |   | 10,127 |  |      | 11,726 |      |   | 11,201 |  |   | 9,691 
|Investment
 securities                         |  |      |       |      |   | 2,039  |  |      | 3,084  |      |   | 3,044  |  |   | 3,015 
|Total assets                                   |  |      | 29,221 |      |   | 29,016 |  |      | 39,265 |      |   | 45,843 |  |   | 40,963
|Short-term
 debt (including due to affiliates) |  |      | 4,426  |      |   | 4,910  |  |      | 15,684 |      |   | 19,775 |  |   | 15,469
|Long-term
 debt                                |  |      | 18,983 |      |   | 19,478 |  |      | 20,010 |      |   | 22,283 |  |   | 21,790
|Shareholders
 equity                          |  |      | 3,563  |      |   | 3,381  |  |      | 3,033  |      |   | 3,444  |  |   | 3,419 
|Cash
 dividends                                |  |      | 260    |      |   | 400    |  |      | 580    |      |   | 750    |  |   | 500   
|                                               |  |      |        |      |   |        |  |      |        |      |   |        |  |   |       

18

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

Critical Accounting Policies

Credcos significant accounting policies are described in Note 1 to the
Consolidated Financial Statements. The following provides information about
three critical accounting policies that are important to the Consolidated
Financial Statements and that require significant management assumptions and
judgments.

|                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|RESERVES FOR CARDMEMBER
 LOSSES                                                                                                                                                                       
|                                                                                                                                                                                                      
|Description                                                                                                                                                                                            |  | Assumptions/Approach Used                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Effect if Actual Results Differ
 from Assumptions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Reserves for cardmember
 losses relating to cardmember loans and receivables represent
 managements best estimate of the losses inherent in Credcos outstanding
 portfolio of loans and receivables. |  | Reserves
 for cardmember loans and receivables losses are primarily based upon models that analyze
 portfolio performance and reflect managements judgment regarding overall
 reserve adequacy. The analytic models take into account several factors, including
 average losses and recoveries over an appropriate historical period.
 Management considers whether to adjust the analytic models for specific
 factors such as increased risk in certain portfolios, impact of risk
 management initiatives on portfolio performance and concentration of credit
 risk based on factors such as tenure, industry or geographic regions. In
 addition, management may increase or decrease the reserves for losses on
 cardmember loans for other external environmental factors including leading
 economic and market indicators such as the unemployment rate, Gross Domestic
 Product (GDP), home price indices, non-farm payrolls, personal consumption
 expenditures index, consumer confidence index, purchasing managers index,
 bankruptcy filings, and legal and regulatory environment. Due to the short-term nature of cardmember receivables, the impact of the other external
 environmental factors on the inherent losses within the cardmember receivable
 portfolio is not significant. As part of this evaluation process, management
 also considers various reserve coverage metrics, such as reserves as a
 percentage of past-due amounts, reserves as a percentage of cardmember loans
 and receivables, and net write-off coverage. |  | To
 the extent historical credit experience updated for emerging market trends in credit is not
 indicative of future performance, actual losses could differ significantly
 from managements judgments and expectations, resulting in either higher or
 lower future provisions for losses, as applicable. 
           As of December
 31, 2010, an increase (decrease) in write-offs equivalent to 20 basis points
 of cardmember loan and receivable balances at such date would increase
 (decrease) the provision for cardmember losses by approximately $26 million.
 This sensitivity analysis does not represent managements expectations of the
 write-offs but is provided as a hypothetical scenario to assess the
 sensitivity of the provision for cardmember losses to changes in key inputs. 
           The process of
 determining the reserve for cardmember losses requires a high degree of
 judgment. It is possible that others, given the same information, may at any
 point in time reach different reasonable conclusions.
|                                                                                                                                                                                                       |  | Cardmember
 loans and receivables are written off when management deems amounts to be
 uncollectible and is generally determined by the number of days past due.
 Cardmember loans and receivables are generally written off no later than 180
 days past due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                       |  | Cardmember
 loans and receivables in bankruptcy or owned by deceased individuals are
 written off upon notification.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                       |  | Recoveries
 of both cardmember loans and receivables are recognized on a cash basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

19

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|                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                   
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|FAIR
 VALUE MEASUREMENT                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                   
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|Description                                                                                                                                                                                                                    |  | Assumptions/Approach Used                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Effect if Actual Results Differ 
 from Assumptions
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|Credco holds derivative
 instruments reflected at fair value on Credcos Consolidated Balance Sheets.
 Management makes significant assumptions and judgments when estimating the
 fair values of these financial instruments. |  | In accordance with U.S.
 generally accepted accounting principles (GAAP) governing fair value
 measurement and related disclosures, the objective of a fair value
 measurement is to determine the price that would be received to sell an asset
 or paid to transfer a liability in an orderly transaction between market
 participants at the measurement date (an exit price). The disclosure guidance
 establishes a three-level hierarchy of inputs to valuation techniques used to
 measure fair value. The fair value hierarchy gives the highest priority to
 the measurement of fair value based on unadjusted quoted prices in active
 markets for identical assets or liabilities (Level 1), followed by the
 measurement of fair value based on pricing models with significant observable
 inputs (Level 2), with the lowest priority given to the measurement of fair
 value based on pricing models with significant unobservable inputs (Level 3). |  |                                                   
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|FAIR
 VALUE MEASUREMENT (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | Assumptions/Approach Used                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Effect if Actual Results Differ
 from Assumptions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|Derivative
 Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Derivative
 Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Derivative
 Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|Credcos primary
 derivative instruments include interest rate swaps, foreign currency forward
 agreements, and cross-currency swaps. Derivative instruments are reported at
 fair value in deferred charges and other assets and accrued interest and
 other liabilities on Credcos Consolidated Balance Sheets. Changes in fair
 value are recorded in accumulated other comprehensive income (loss), and/or
 in the Consolidated Statements of Income, depending on (i) the documentation
 and designation of the derivative instrument, and (ii) if the derivative
 instrument is in a hedging relationship, its effectiveness in offsetting the
 changes in the designated risk being hedged. |  | The fair values of
 Credcos derivative instruments are estimated by using either a third-party
 valuation service that uses proprietary pricing models, or internal pricing
 models. The pricing models do not contain a high level of subjectivity as the
 valuation techniques used do not require significant judgment and inputs to
 those models are readily observable from actively quoted markets. The pricing
 models used are consistently applied and reflect the contractual terms of the
 derivatives, including the period of maturity, and market-based parameters
 such as interest rates, foreign exchange rates and volatility.
      Credit valuation
   adjustments are necessary when the market parameters, such as a benchmark
   curve, used to value the derivative instruments are not indicative of the
   credit quality of Credco or its counterparties. Credco considers the
   counterparty credit risk by applying an observable forecasted default rate to
   the current exposure.
        Credco
   manages derivative instrument counterparty credit risk by considering the
   current exposure, which is the replacement cost of contracts on the measurement
   date, as well as estimating the maximum potential value of the contracts over
   the next 12 months, considering such factors as the volatility of the underlying
   or reference index. To mitigate derivative instrument credit risk,
   counterparties are required to be pre-approved and rated as investment grade.
   Credcos derivative instruments are classified in Level 2 of the fair value
   hierarchy. Refer to Notes 2 and 8 to Credcos Consolidated Financial
   Statements. |  | In the measurement of
 fair value for Credcos derivative instruments, although the underlying
 inputs used in the pricing models are readily observable from actively quoted
 markets, the pricing models do entail a certain amount of subjectivity and
 therefore, differing judgments in how the underlying inputs are modeled could
 result in different estimates of fair value. In addition, any necessary
 credit valuation adjustments are based on observable default rates. A change
 in facts and circumstances could lead to a change in management judgment
 about counterparty credit quality, which could result in Credco recognizing
 an additional counterparty credit valuation adjustment. As of December 31,
 2010, the credit and nonperformance risks associated with Credcos derivative
 instrument counterparties were not significant.
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|INCOME
 TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                             
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|Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | Assumptions/Approach Used                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Effect if Actual Results Differ
 from Assumptions                                                                                                                                                                                                                                                                                           
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|As a member of the
 consolidated federal income tax return of American Express, Credco is subject
 to the income tax laws of the United States and its states and municipalities.
 Credco is also subject to the income tax laws of the foreign jurisdictions in
 which it operates. These tax laws are complex, and the manner in which they
 apply to the taxpayers facts is sometimes open to interpretation. In
 establishing a provision for income tax expense, management must make
 judgments about the application of these inherently complex tax laws. Under
 an agreement with TRS, taxes are recognized on a separate company basis. |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                             
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|Unrecognized
 Tax Benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | Unrecognized
 Tax Benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Unrecognized
 Tax Benefits                                                                                                                                                                                                                                                                                                                  
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|Credco establishes a
 liability for unrecognized tax benefits, which are the differences between a
 tax position taken or expected to be taken in a tax return and the benefit
 recognized in the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                            |  | In establishing a
 liability for an unrecognized tax benefit, assumptions may be made in
 determining whether a tax position is more likely than not to be sustained
 upon examination by the taxing authority and also in determining the ultimate
 amount that is likely to be realized. A tax position is recognized when,
 based on managements judgment regarding the application of income tax laws,
 it is more likely than not that the tax position will be sustained upon
 examination. The amount of tax benefit recognized is based on managements
 assessment of the most likely outcome on ultimate settlement with the taxing
 authority. This measurement is based on many factors, including whether a tax
 dispute may be settled through negotiation with the taxing authority or is
 only subject to review in the courts. As new information becomes available,
 management evaluates its tax positions, and adjusts its unrecognized tax
 benefits, as appropriate. |  | If the tax benefit
 ultimately realized differs from the amount previously recognized in the
 income tax provision, Credco recognizes an adjustment of the unrecognized tax
 benefit through the income tax provision.                                                                                                                      
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|Deferred
 Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | Deferred
 Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Deferred
 Taxes                                                                                                                                                                                                                                                                                                                             
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|Deferred tax assets and
 liabilities are determined based on the differences between the GAAP
 financial statement and tax bases of assets and liabilities using the enacted
 tax rates expected to be in effect for the years in which the differences are
 expected to reverse. A valuation allowance is established when management
 determines that it is more likely than not that all or some portion of the
 benefit of the deferred tax asset will not be realized.                                                                                                                                                                        |  | Since deferred taxes
 measure the future tax effects of items recognized in the financial
 statements, certain estimates and assumptions are required to determine
 whether it is more likely than not that all or some portion of the benefit of
 a deferred tax asset will not be realized. In making this assessment,
 management analyzes and estimates the impact of future taxable income, reversing
 temporary differences and available tax planning strategies. These
 assessments are performed quarterly, taking into account any new information.                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Should a change in facts
 or circumstances lead to a change in judgment about the ultimate
 realizability of a deferred tax asset, Credco records or adjusts the related
 valuation allowance in the period that the change in facts or circumstances
 occurs, along with a corresponding increase or decrease to the income tax
 provision.
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Consolidated Capital Resources and Liquidity

Credcos
balance sheet management objectives are to maintain:

| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A broad,
 deep and diverse set of funding sources to finance its assets and meet
 operating requirements; and                                                                      
| |   |                                                                                                                                                                                    
| |  | Liquidity programs that enable Credco to satisfy all maturing
 financing obligations for at least a 12-month period should some or all of
 its funding sources become inaccessible.

Funding Strategy

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

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

Credcos funding strategy for 2011 is to raise funds to meet short-term
borrowings outstanding, which includes seasonal and other working capital needs
and changes in receivables and other asset balances, while maintaining access
to a sufficient amount of its own and its affiliates cash and
readily-marketable securities that are easily convertible to cash, in order to
meet the scheduled maturities of all long-term borrowings for a 12-month
period. Credco has $2.2 billion of unsecured long-term debt that will mature
during 2011.

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

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

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

23

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

Short-term Funding Programs

Credcos issuance and sale of commercial paper
    is utilized for working capital needs, such as managing seasonal variations
    in receivables balances. Short-term borrowings were fairly stable throughout
    2010. The amount of short-term borrowings issued in the future will depend
    on Credcos funding
strategy, its needs and market conditions. As of December 31, 2010 and 2009,
Credco had $0.6 billion and $1.0 billion of commercial paper outstanding,
respectively. The average commercial paper outstanding was $0.9 billion and
$2.0 billion for the years ended December 31, 2010 and 2009, respectively.

Credcos total back-up liquidity coverage, which includes its undrawn
committed bank facilities, was in excess of 100 percent of its net short-term
borrowings as of December 31, 2010 and 2009. The undrawn committed bank credit
facilities were $5.7 billion as of December 31, 2010.

In 2008, the Federal Reserve Board established the Commercial Paper
Funding Facility (CPFF), which provided three months of liquidity to U.S.
issuers of commercial paper through a special purpose vehicle. The CPFF program
expired on February 1, 2010. The expiration of the CPFF program has not had,
and under current market conditions Credco does not expect the expiration to
have, any material impact on Credcos business or funding positions. However,
if extreme levels of volatility and disruptions in capital markets reemerge,
the lack of government supported liquidity programs, such as CPFF, could
negatively impact Credcos funding capabilities.

The following table presents selected statistics
    regarding Credcos
commercial paper balances outstanding as of:

|           |     |        |      |         |     |         |  |         |      |  |   |     
|---------- | --- | ------ | ---- | ------- | --- | ------- |  | ------- | ---- |  | - | ----
|          
|          
|(Billions) |     |        |      |         |     |         |  |         |      |  |   |     
|          
|Period     |     | Ending |      | Average | (a) | Minimum |  | Maximum
|           |     |        |      |         |     |         |  |        
|Q110      |     | $      | 0.9  |         | $   | 0.8     |  | $       | 0.6  |  | $ | 1.0 
|Q210      |     |        | 1.4  |         |     | 0.9     |  |         | 0.8  |  |   | 1.4 
|Q310      |     |        | 0.9  |         |     | 1.0     |  |         | 0.8  |  |   | 1.2 
|Q410      |     |        | 0.6  |         |     | 0.8     |  |         | 0.5  |  |   | 1.0 
|           |     |        |      |         |     |         |  |         |      |  |   |     
|Q109      |     |        | 1.8  |         |     | 3.7     |  |         | 1.4  |  |   | 7.4 
|Q209      |     |        | 1.4  |         |     | 1.5     |  |         | 1.2  |  |   | 2.0 
|Q309      |     |        | 1.1  |         |     | 1.1     |  |         | 0.9  |  |   | 1.3 
|Q409      |     |        | 1.0  |         |     | 0.8     |  |         | 0.6  |  |   | 1.1 
|           |     |        |      |         |     |         |  |         |      |  |   |     
|Q108      |     |        | 14.1 |         |     | 11.6    |  |         | 10.3 |  |   | 14.1
|Q208      |     |        | 12.6 |         |     | 13.2    |  |         | 11.5 |  |   | 14.7
|Q308      |     |        | 9.2  |         |     | 10.9    |  |         | 9.2  |  |   | 12.1
|Q408      | (b) |        | 7.3  |         |     | 7.3     |  |         | 4.4  |  |   | 9.0 
|          

|    |                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Based on monthly averaging.                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                 
|(b) | Includes $4.5 billion
 under the CPFF as of December 31, 2008, which was also the maximum balance
 under the CPFF. Credco has not issued commercial paper to the CPFF since
 November 4, 2008, and has had no commercial paper outstanding under the CPFF
 since March 30, 2009.

24

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Long-term Debt Programs

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

Credco had the following long-term debt outstanding as of December 31:

|                            |  |      |      |      |   |     
|--------------------------- |  | ---- | ---- | ---- | - | ----
|                            |  |      |      |      |   |     
|(Billions)                  |  | 2010 |      | 2009
|                            |  |      |      |     
|Long-term
 debt outstanding |  | $    | 19.0 |      | $ | 19.5
|Average
 long-term debt     |  | $    | 19.0 |      | $ | 18.8
|                            |  |      |      |      |   |     

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

Credco has the ability to issue debt securities under shelf
registrations filed with SEC. The latest shelf registration statement filed
with the SEC is for an unspecified amount of debt securities to be issued.
During the third quarter of 2010, Credco issued $2.0 billion of senior
unsecured debt with a maturity of five years and a coupon of 2.75 percent from
its SEC shelf registration statement. As of December 31, 2010 and 2009, Credco
had $10.5 billion and $11.1 billion, respectively, of debt securities
outstanding, issued under the SEC shelf registration statement.

Credco
has established a program for the issuance of debt instruments outside the
United States, which is listed on the Luxembourg Stock Exchange. The prospectus
for this program expired on July 28, 2010 and was renewed on January 5, 2011.
The program allows for a maximum aggregate principal amount of debt instruments
outstanding at any one time of $50 billion. During 2010, no notes were issued
under this program. As of December 31, 2010 and 2009, $2.6 billion was
outstanding under this program, of which $2.1 billion was issued by Credco.

Credco has also established a program in Australia for the issuance of
debt securities of up to approximately $6.1 billion. During 2010, no notes were
issued under this program. As of December 31, 2010 and 2009, approximately $5.6
billion and $4.6 billion of notes were available for issuance under this
program and $456 million and $806 million of notes were outstanding,
respectively.

As of December 31, 2010, Credco maintained a shelf registration in
Canada for a medium-term note program providing for the issuance when necessary
of up to approximately $3.5 billion of notes by American Express Canada Credit
Corporation (AECCC), an indirect wholly-owned subsidiary of Credco. All notes
issued under this shelf registration are guaranteed by Credco. During 2010, no
notes were issued under this program. As of December 31, 2010 and 2009, AECCC
had $1.8 billion and $2.2 billion outstanding under this program, respectively.
The financial results of AECCC are included in the consolidated financial
results of Credco.

The most restrictive limitation on Credcos ability to pay dividends to
its parent imposed by the covenants of debt instruments issued by Credco is the
requirement that Credco maintain a minimum consolidated net worth of $50
million. As of December 31, 2010, management believes Credco is in compliance
with all restrictive covenants contained in its debt agreements. During 2010
and 2009, Credco paid $260 million and $400 million cash dividends,
respectively, to TRS. There are no significant covenant restrictions on the
ability of Credco to obtain funds from its subsidiaries by dividend or loan.
Additionally, there are no limitations on the amount of debt that can be issued
by Credco, provided it maintains the minimum required fixed charge coverage
ratio of 1.25.

Liquidity Strategy

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

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

25

---



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

|  |                                                                                                        
|- | -------------------------------------------------------------------------------------------------------
| | Maintaining
 a diversified set of funding sources (refer to Funding Strategy section for
 more detail);
|  |                                                                                                        
| | Maintaining
 unencumbered liquid assets and off-balance sheet liquidity sources; and                   
|  |                                                                                                        
| | Projecting
 cash inflows and outflows from a variety of sources and under a variety of
 scenarios.     

Credcos current liquidity target is to maintain adequate liquidity in
the form of cash and readily-marketable securities that are easily convertible
into cash, as well as access to additional liquidity through intercompany
borrowing arrangements, to satisfy all maturing funding obligations for a
period of 12 months, while continuing to maintain access to significant
additional contingency liquidity sources. As of December 31, 2010, Credco had
$2.2 billion of unsecured long-term debt that will mature within 12 months.

As of December 31, 2010, Credco had cash and cash equivalents of
approximately $1.0 billion. In addition to its actual holdings of cash and cash
equivalents, Credco maintains access to additional liquidity, in the form of
cash and cash equivalents held by certain affiliates, through intercompany loan
agreements.

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

Committed Bank Credit Facilities

Credco
maintained the following committed bank credit facilities as of December 31,
2010:

|             |  |                    |     |        |   |       |     |   |    
|------------ |  | ------------------ | --- | ------ | - | ----- | --- | - | ---
|             |  |                    |     |        |   |      
|(Billions)   |  | American 
 Express |     | Credco |   | Total
|             |  |                    |     |        |   |      
|Committed(a) |  | $                  | 0.8 |        | $ | 9.0   | (b) | $ | 9.8
|Outstanding  |  | $                  |    |        | $ | 4.1   |     | $ | 4.1
|             |  |                    |     |        |   |       |     |   |    

|    |                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Committed lines were supplied by 32 financial
 institutions as of year-end.                                                                                      
|    |                                                                                                                                                                  
|(b) | Credco has the right to
 borrow a maximum amount of $9.8 billion with a commensurate maximum $0.8
 billion reduction in the amount available to American Express.

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

|           |  |   |    
|---------- |  | - | ---
|           |  |   |    
|(Billions) |  |   |    
|           |  |   |    
|2011       |  | $ | 2.7
|2012       |  |   | 7.1
|           |  |   |    
|Total      |  | $ | 9.8
|           |  |   |    

26

---



The availability of the credit lines is subject to Credcos compliance
with certain financial covenants that require maintenance of a 1.25 ratio of
earnings to fixed charges. The ratio of earnings to fixed charges for Credco
and American Express was as follows:

|     |  |        |      |                    |  |     
|---- |  | ------ | ---- | ------------------ |  | ----
|     |  |        |      |                   
|     |  | Credco |      | American 
 Express
|     |  |        |      |                   
|2010 |  |        | 1.54 |                    |  | 3.39
|2009 |  |        | 1.59 |                    |  | 2.22
|2008 |  |        | 1.62 |                    |  | 1.96
|     |  |        |      |                    |  |     

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

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

Results of Operations

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

Credcos consolidated net income decreased
    $14 million or 4 percent to $348 million for the year ended December 31,
    2010, as compared to $362 million for the year ended December 31, 2009. The
    year-over-year decrease in discount revenue and interest income from investments
    was partially offset by the decrease in the provisions for losses, interest
expense and other, net expenses.

27

---



The following table summarizes the changes
attributable to the increase (decrease) in key revenue and expense accounts as
of December 31:

|                                                                        |  |      |      |      |   |        |  
|----------------------------------------------------------------------- |  | ---- | ---- | ---- | - | ------ | -
|                                                                        |  |      |      |      |  
|(Millions)                                                              |  | 2010 |      | 2009 |  
|                                                                        |  |      |      |      |  
|                                                                        |  |      |      |      |   |        |  
|Discount
 revenue earned on purchased cardmember receivables and loans: |  |      |      |      |   |        |  
|Volume of receivables and loans purchased                               |  | $    | 254  |      | $ | (1,140 | )
|Discount rates                                                          |  |      | (463 | )    |   | (399   | )
|                                                                        |  |      |      |      |   |        |  
|Total                                                                   |  | $    | (209 | )    | $ | (1,539 | )
|                                                                        |  |      |      |      |   |        |  
|                                                                        |  |      |      |      |   |        |  
|Interest
 income from affiliates:                                       |  |      |      |      |   |        |  
|Average loans to affiliates                                             |  | $    | (29  | )    | $ | (69    | )
|Interest rates                                                          |  |      | 63   |      |   | (243   | )
|                                                                        |  |      |      |      |   |        |  
|Total                                                                   |  | $    | 34   |      | $ | (312   | )
|                                                                        |  |      |      |      |   |        |  
|                                                                        |  |      |      |      |   |        |  
|Interest
 income from investments:                                      |  |      |      |      |   |        |  
|Average investments outstanding                                         |  | $    | (67  | )    | $ | 11     |  
|Interest rates                                                          |  |      | 16   |      |   | (175   | )
|                                                                        |  |      |      |      |   |        |  
|Total                                                                   |  | $    | (51  | )    | $ | (164   | )
|                                                                        |  |      |      |      |   |        |  
|                                                                        |  |      |      |      |   |        |  
|Finance
 revenue:                                                       |  |      |      |      |   |        |  
|Average cardmember loans outstanding                                    |  | $    | (3   | )    | $ | 4      |  
|Interest rates                                                          |  |      | (6   | )    |   | (4     | )
|                                                                        |  |      |      |      |   |        |  
|Total                                                                   |  | $    | (9   | )    | $ | ―      |  
|                                                                        |  |      |      |      |   |        |  
|                                                                        |  |      |      |      |   |        |  
|Interest
 expense:                                                      |  |      |      |      |   |        |  
|Average debt outstanding                                                |  | $    | (19  | )    | $ | (488   | )
|Interest rates                                                          |  |      | 13   |      |   | (287   | )
|                                                                        |  |      |      |      |   |        |  
|Total                                                                   |  | $    | (6   | )    | $ | (775   | )
|                                                                        |  |      |      |      |   |        |  
|                                                                        |  |      |      |      |   |        |  
|Interest
 expense to affiliates:                                        |  |      |      |      |   |        |  
|Average debt outstanding                                                |  | $    | (17  | )    | $ | (7     | )
|Interest rates                                                          |  |      | (8   | )    |   | (207   | )
|                                                                        |  |      |      |      |   |        |  
|Total                                                                   |  | $    | (25  | )    | $ | (214   | )
|                                                                        |  |      |      |      |   |        |  

Discount revenue earned on purchased
cardmember receivables and loans

Discount revenue decreased 32 percent or $209 million
    to $443 million for 2010, as compared to $652 million in 2009, due to a decrease
    in discount rates, partially offset by an increase in the volume of cardmember
    receivables purchased. Discount rates, which vary over time due to changes
    in market interest rates or changes in the collectibility of cardmember receivables,
    decreased an average of 29 basis points from 0.57 percent in 2009 to 0.28
    percent in 2010. This decrease was attributable to both a decrease in market
    interest rates and the improvement in the credit quality of the cardmember
    receivables. Volume of cardmember receivables and loans purchased for 2010
    increased 35 percent from $118 billion in 2009 to $159 billion in 2010, primarily
    due to increased cardmember spending.

Interest income from affiliates

Interest income from affiliates increased 8 percent or $34 million to
$466 million in 2010, as compared to $432 million in 2009. The effective
annualized interest rate charged to affiliates increased 63 basis points from
3.95 percent for 2009 to 4.58 percent for 2010. The rate increase is driven by
an increase in interest rates in the Australian market, a primary factor in the
rate used in Credcos loans to its Australian affiliate. The average loan
balances with affiliates were $10.2 billion and $10.9 billion for the years
ended December 31, 2010 and 2009, respectively.

28

---



Interest income from investments

Interest income from investments decreased 62 percent or $51 million to
$32 million for 2010, as compared to $83 million for 2009. The year-over-year
decrease was driven by a decrease in the average available-for-sale securities
and short-term investment balances, partially offset by an increase in interest
rates. The total average investment balances were $1.8 billion and $9.0 billion
for 2010 and 2009, respectively. The effective annualized interest rate on
investments increased 89 basis points from 0.92 percent for 2009 to 1.81
percent for 2010. The increase in the effective interest rates was primarily
driven by the change in the mix of available-for-sale securities and short-term
investments in 2010 as compared to 2009. The average balance for short-term
investments was significantly higher in 2009 as compared to 2010.

Finance revenue

Finance revenue decreased 19 percent or $9 million to $39 million
during 2010 as compared to $48 million for the same period in 2009. The
year-over-year decrease was primarily driven by a decrease in average interest
rates.

Other, net expenses

Other, net expenses, which was a benefit of $71 million for 2010,
decreased $72 million from the previous years $1 million expense primarily due
to the reclassification of the forward points (interest component of foreign
exchange forward contracts) gain of $52 million in 2010 from interest expense
to other, net expenses; receipts of $10 million in 2010 over the expected recoverable
amount related to Credcos investment in the Reserve Prime Fund; a favorable
impact related to hedge ineffectiveness resulting in an additional gain of $2
million in 2010; and a charge of $9 million in 2009 as a result of changes in
the fair value of certain foreign exchange contracts that are economic hedges
to foreign currency exposures of net investments in consolidated subsidiaries.

Provisions for losses

The provisions for losses decreased 40 percent or $86 million to $128
million for 2010, as compared to $214 million for 2009. The decrease was
primarily driven by improved credit performance within the underlying
portfolio.

Interest expense

Interest expense decreased 1 percent or $6 million to $582 million for
2010 as compared to $588 million for 2009, due to a decrease in average debt
outstanding, partially offset by an increase in interest rates. The 2.92
percent effective annualized interest rate on average debt outstanding during
2010 was 7 basis points higher than the 2.85 percent effective interest rate
for the same period in 2009.

Interest expense to affiliates

Interest expense to affiliates decreased 60 percent or $25 million to
$16 million for 2010, as compared to $41 million for 2009, due to a decrease in
both average debt outstanding and interest rates. The effective annualized
interest rate on average debt due to affiliates as of December 31, 2010
decreased 16 basis points from 0.48 percent in 2009 to 0.32 percent in 2010.

Service fees to affiliates

Certain affiliates do not explicitly charge Credco a servicing fee for
the servicing of receivables purchased. Instead Credco receives a lower
discount rate on the receivables sold to Credco than would be the case if
servicing fees were charged explicitly, as the discount rate on receivables
purchased by Credco is adjusted to generate income for Credco that is
sufficient to maintain its minimum fixed charge coverage ratio. If a servicing
fee had been charged by these affiliates from which Credco purchases
receivables, servicing fees to affiliates would have been higher by
approximately $120 million and $126 million for the years ended December 31,
2010 and 2009, respectively. Correspondingly, discount revenue would have
increased by approximately the same amounts in these periods.

Income taxes

Credcos effective tax rate for the years ended December 31, 2010 and
2009 was (7.4) percent and 2.2 percent, respectively. Each of the periods
reflects recurring permanent tax benefits in relation to the level of pretax
income. Credcos effective tax rate reflects the favorable impact of the
consolidated tax benefit related to its ongoing funding activities outside the
United States. The availability of this benefit in future years is largely
dependent on the continued extension by Congress of a provision of the United
States Internal Revenue Code. Refer to Forward-Looking Statements for further
discussion of this provision.

29

---



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

Credcos risk management objective is to identify, monitor and
appropriately control its risk exposures. 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 American
Express Enterprise-wide Risk Management Policy, which defines risk management
objectives, risk appetite, risk limits and escalation triggers, and establishes
the internal governance structure for managing risk. The Policy focuses on the
major risks that are relevant to American Express and Credco  credit risk,
operational risk, market risk and reputational risk. Management committees,
including the Enterprise Risk Management Committee (ERMC), chaired by the
American Express Chief Risk Officer, and the Asset-Liability Committee (ALCO),
chaired by the American Express Chief Financial Officer, are responsible for
implementing policies for managing these risks across American Express,
including Credco.

Credit Risk Management Process

Credit risk is defined as the risk of loss due to obligor or
counterparty default. TRS manages the overall credit risk exposure associated
with the cardmember receivables and loans purchased by Credco. 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 Credcos portfolio consists of millions of borrowers and
individual exposures across multiple geographies, occupations, and social
segments, its risk is 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 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 exposure is primarily generated by:

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

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

Derivative financial instruments derive their value from an underlying
variable or multiple variables, including interest rate, foreign exchange, and
equity indices or prices. These instruments enable end users to increase, reduce
or alter exposure to various market risks and, for that reason, are an integral
component of American Express market risk management. Credco does not engage
in derivative financial instruments for trading purposes. Use of derivative
financial instruments is incorporated into the discussion below as well as Note
8 to Credcos Consolidated Financial Statements.

Interest rate risk arises through the funding of cardmember receivables
and fixed-rate cardmember loans purchased with variable-rate borrowings. Interest
rate exposure within Credcos charge card and fixed-rate lending products is
managed by varying the proportion of total funding provided by short-term and
variable-rate debt compared to fixed-rate debt. In addition, interest rate
swaps are used from time to time to effectively convert fixed-rate debt to
variable-rate or to convert variable-rate debt to fixed-rate. Credco may change the mix
between variable-rate and fixed-rate funding
based on changes in business volumes and mix, among other factors.

Credco
regularly reviews its interest rate exposure profile and may modify it.
Interest rate derivatives, primarily interest rate swaps, with notional amounts
of approximately $10 billion and $8 billion were outstanding as of

30

---



December 31, 2010 and 2009, respectively. These derivatives generally
qualify for hedge accounting. A portion of the interest rate derivatives
outstanding as of December 31, 2010 extend to 2015.

Given the nature of Credcos business model, where Credco includes its
costs of funding in the calculation of the discount at which Credco offers to
purchase receivables, and where such discount is further adjusted to maintain
Credcos required minimum fixed charge coverage ratio of 1.25, there would be
minimal detrimental effect on Credcos pretax earnings of a hypothetical 100
basis point increase in interest rates.

Foreign exchange risk is generated by funding foreign currency
cardmember receivables and loans in U.S. dollars and by foreign subsidiary
equity and foreign currency earnings in units outside the United States. Credco
hedges this market exposure to the extent it is economically justified through
various means, including foreign currency funding and the use of derivative
financial instruments such as foreign exchange forwards and cross-currency swap
contracts, which can help lock in the value of Credcos exposure to specific
currencies.

As of December 31, 2010 and 2009, foreign currency hedge instruments
with total notional amounts of approximately $7 billion and $6 billion,
respectively, were outstanding. Derivative hedging activities related to
balance sheet exposures and foreign currency earnings generally do not qualify
for hedge accounting; however, derivative hedging activities related to
translation exposure of foreign subsidiary equity generally do.

With respect to foreign currency balance sheet exposures, including
related foreign exchange forward contracts and swaps outstanding, the effect on
Credcos earnings of a hypothetical 10 percent change in the value of the U.S.
dollar would be immaterial as of December 31, 2010.

Funding and Liquidity Risk Management Process

Liquidity risk is defined as the inability of Credco to meet its
ongoing financial and business obligations as they become due at a reasonable
cost. General principles and the overall framework for managing liquidity risk
across American Express are defined in the Liquidity Risk Policy, approved by
the ALCO and the Audit and Risk Committee of the American Express Board.
Liquidity risk is centrally managed by the Funding and Liquidity Committee,
which reports into the ALCO. Credco balances the trade-offs between maintaining
too much liquidity, which can be costly and limit financial flexibility, with
having inadequate liquidity, which may result in financial distress during a
liquidity event. American Express has developed a liquidity plan that enables
it to meet its daily cash obligations when access to both unsecured and secured
funds in the debt capital markets is impaired or unavailable. This plan is designed
to ensure that Credco and all of its main operating entities could continuously
meet their maturing debt obligations for a 12-month period if access to all
capital markets is interrupted.

Liquidity risk is managed both at an aggregate company level and at the
major legal entities in order to ensure that sufficient funding and liquidity
resources are available in the amount and in the location needed in a stress
event. The Funding and Liquidity Committee reviews the forecasts of American
Express aggregate and Credco cash positions and financing requirements and
approves the funding plans designed to satisfy those requirements under normal
conditions, establishes guidelines to identify the amount of liquidity
resources required, and monitors positions and determines any actions to be
taken. Liquidity planning also takes into account operating cash flexibilities.

Operational Risk Management Process

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

The general principles and the overall framework for managing
operational risk across American Express are defined in the Operational Risk
Policy approved by the Audit and Risk Committee of the American Express Board
of Directors. The Operational Risk Management Committee (ORMC) provides
governance for the operational risk framework.

In order to appropriately measure operational risk, American Express
has developed a comprehensive operational risk model. This model assesses (i)
risk events, i.e., what occurred or could have occurred; (ii) root causes,
i.e., why did it occur or could have occurred; (iii) impact and (iv)
accountability. Any impacts are assessed from a financial, brand, regulatory
and legal perspective. The operational risk model also assesses the frequency
and likelihood that events may occur again so that the appropriate mitigation
steps may be taken.

31

---



The
operational risk framework also includes the entity risk self-assessment. This
is a risk workshop where senior leaders identify the key operational risks that
the business unit or support group faces and determine preparedness to respond
should these risks occur. Top risks are tracked to ensure that the appropriate
monitoring or mitigation is in place. The day-to-day management of operational
risk lies with Credco.

32

---



|         |                                                                                       |                                                       
|-------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------
|Item 8.  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|         |                                                                                       |                                                       
|         | 1.                                                                                    | Financial
 Statements.                                
|         |                                                                                       |                                                       
|         |                                                                                       | See Index to
 Financial Statements at page F-1 hereof.
|         |                                                                                       |                                                       
|         | 2.                                                                                    | Supplementary
 Financial Information.                 
|         |                                                                                       |                                                       
|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 Exchange Act) as of the end of the period
covered by this Report. Based on such evaluation, Credcos Chief Executive
Officer and Chief Financial Officer have concluded that, as of the end of such
period, Credcos disclosure controls and procedures are effective and designed
to ensure that the information required to be disclosed in Credcos reports
filed or submitted under the Exchange Act is recorded, processed, summarized
and reported within the requisite time periods specified in the applicable
rules and forms, and that it is accumulated and communicated to Credcos
management, including Credcos principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.

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

Managements Report on Internal Control over
Financial Reporting

The management of Credco is responsible for establishing and
maintaining adequate internal control over financial reporting.

Credcos internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with GAAP in the United States of America, and includes those
policies and procedures that:

|  |                                                                                                                                                                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pertain to the maintenance of records that, in reasonable detail,
 accurately and fairly reflect the transactions and dispositions of the assets
 of Credco;                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                 
| | Provide reasonable assurance that transactions are recorded as
 necessary to permit preparation of financial statements in accordance with
 GAAP, and that receipts and expenditures of Credco are being made only in
 accordance with authorizations of management and directors of Credco; and
|  |                                                                                                                                                                                                                                                                                                 
| | Provide reasonable assurance regarding prevention or timely detection
 of unauthorized acquisition, use or disposition of Credcos assets that could
 have a material effect on the financial statements.                                                                                       

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Credcos management assessed the effectiveness of Credcos internal
control over financial reporting as of December 31, 2010. In making this
assessment, Credcos management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control  Integrated Framework.

Based on
managements assessment and those criteria, management has concluded that, as
of December 31, 2010, Credcos internal control over financial reporting is
effective.

33

---



|         |                  
|-------- | -----------------
|Item 9B. | OTHER INFORMATION
|         |                  
|         | Not
 applicable. 

34

---



PART III

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
 GOVERNANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Omitted pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 11. | EXECUTIVE COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Omitted pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
 OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Omitted pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 13. | CERTAIN RELATIONSHIPS AND RELATED
 TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Omitted pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | The Audit and Risk 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, 2010.                                                                                                                                                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Each year the Audit and Risk Committee reviews the accountants
 qualifications, performance and independence in accordance with regulatory
 requirements and guidelines. At least every ten years, the Audit and Risk
 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 $678,032 and $682,819 for the years ended December 31, 2010 and 2009,
 respectively.                                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Audit-Related Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Credco was not billed by PricewaterhouseCoopers LLP for any fees for
 audit-related services for 2010 or 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Tax Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Credco was not billed by PricewaterhouseCoopers LLP for any tax fees
 for 2010 or 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | All Other Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Credco was not billed by PricewaterhouseCoopers LLP for any other
 fees for 2010 or 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Policy on Pre-Approval of Services Provided by Independent Registered
 Public Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         | Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the
 terms of the engagement of Credcos independent registered public accounting
 firm is subject to the specific pre-approval of the Audit and Risk Committee
 of American Express. All audit and permitted non-audit services to be
 performed by Credcos independent registered public accounting firm require
 pre-approval by such Audit and Risk Committee in accordance with its
 pre-approval procedures. All such services provided by                                                                                       

35

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Credcos independent registered public accounting firm have been
 pre-approved. The procedures require all proposed engagements of Credcos
 independent registered public accounting firm for services to Credco of any
 kind to be directed to the General Auditor of American Express and then
 submitted for approval to the Audit and Risk Committee of American Express
 prior to the beginning of any services.                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Other Transactions with PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | American Express has a number of business relationships with
 individual member firms of the worldwide PricewaterhouseCoopers LLP
 organization. American Express subsidiaries provide card and travel services to
 some of these firms and these firms pay fees to American Express
 subsidiaries. These services are in the normal course of business and
 American Express provides them pursuant to arrangements that American Express
 offers to other similar clients.

36

---



PART IV

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

37

---



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
 31, 2011 | By | /s/ David L.
 Yowan
|                      |    |                     |                         
|                      |    |                     | David L.
 Yowan         
|                      |    |                     | Chief
 Executive Officer

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

|                      |    |                           |                                             
|--------------------- | -- | ------------------------- | --------------------------------------------
|Date: March
 31, 2011 | By | /s/ David L.
 Yowan      
|                      |    |                           |                                             
|                      |    |                           | David L.
 Yowan                             
|                      |    |                           | Chief
 Executive Officer and Director       
|                      |    |                           |                                             
|Date: March
 31, 2011 | By | /s/ Kimberly
 R. Scardino
|                      |    |                           |                                             
|                      |    |                           | Kimberly R.
 Scardino                       
|                      |    |                           | Vice
 President and Chief Accounting Officer
|                      |    |                           |                                             
|Date: March
 31, 2011 | By | /s/ Anderson
 Y. Lee     
|                      |    |                           |                                             
|                      |    |                           | Anderson Y.
 Lee                            
|                      |    |                           | Chief
 Financial Officer and Director       
|                      |    |                           |                                             
|Date: March
 31, 2011 | By | /s/ Peter C.
 Sisti      
|                      |    |                           |                                             
|                      |    |                           | Peter C.
 Sisti                             
|                      |    |                           | Director                                    

38

---



(Item 15 (a))

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

Financial Statements

|                                                                           |  |             |     
|-------------------------------------------------------------------------- |  | ----------- | ----
|                                                                           |  | Page Number
|                                                                           |  |            
|                                                                           |  |             |     
|                                                                           |  |             |     
|Report of
 Independent Registered Public Accounting Firm                   |  |             | F-2 
|                                                                           |  |             |     
|Consolidated
 Statements of Income                                         |  |             | F-3 
|                                                                           |  |             |     
|Consolidated
 Balance Sheets                                               |  |             | F-4 
|                                                                           |  |             |     
|Consolidated
 Statements of Cash Flows                                     |  |             | F-5 
|                                                                           |  |             |     
|Consolidated
 Statements of Shareholders Equity                           |  |             | F-6 
|                                                                           |  |             |     
|Notes to Consolidated Financial Statements                                 |  |             |     
|Note 1  Summary
 of Significant Accounting Policies                       |  |             | F-7 
|Note 2  Fair
 Values                                                      |  |             | F-10
|Note 3 
 Cardmember Receivables and Loans                                 |  |             | F-13
|Note 4 
 Reserves for Losses                                              |  |             | F-15
|Note 5 
 Investment Securities                                            |  |             | F-17
|Note 6  Debt                                                              |  |             | F-17
|Note 7 
 Restrictions as to Dividends and Limitations on Indebtedness     |  |             | F-19
|Note 8 
 Derivatives and Hedging Activities                               |  |             | F-19
|Note 9 
 Variable Interest Entity                                         |  |             | F-22
|Note 10 
 Transactions with Affiliates                                    |  |             | F-23
|Note 11 
 Significant Credit Concentrations                               |  |             | F-25
|Note
       12 
 Changes in Accumulated Other Comprehensive (Loss) Income |  |             | F-26
|Note 13 
 Income Taxes                                                    |  |             | F-27
|Note 14 
 Geographic Regions                                              |  |             | F-29
|Note 15 
 Quarterly Financial Data (Unaudited)                            |  |             | F-30

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

F-1

---



REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of American Express Credit Corporation and its subsidiaries (the
Company) at December 31, 2010 and 2009, and the results of their operations and
their cash flows for each of the three years in the period ended December 31,
2010 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 31, 2011

F-2

---



CONSOLIDATED
STATEMENTS OF INCOME
AMERICAN EXPRESS CREDIT CORPORATION

|                                                                         |  |      |     |      |   |       |  |   |       |  
|------------------------------------------------------------------------ |  | ---- | --- | ---- | - | ----- |  | - | ----- | -
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Years Ended
 December 31,(Millions)                                      |  | 2010 |     | 2009 |   | 2008  | 
|                                                                         |  |      |     |      |   |       |  |   |       |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Revenues                                                                 |  |      |     |      |   |       |  |   |       |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Discount
 revenue earned from purchased cardmember receivables and loans |  | $    | 443 |      | $ | 652   |  | $ | 2,191 |  
|Interest
 income from affiliates                                         |  |      | 466 |      |   | 432   |  |   | 744   |  
|Interest
 income from investments                                        |  |      | 32  |      |   | 83    |  |   | 247   |  
|Finance
 revenue                                                         |  |      | 39  |      |   | 48    |  |   | 48    |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Total revenues                                                           |  |      | 980 |      |   | 1,215 |  |   | 3,230 |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Expenses                                                                 |  |      |     |      |   |       |  |   |       |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Provisions
 for losses                                                   |  |      | 128 |      |   | 214   |  |   | 641   |  
|Interest
 expense                                                        |  |      | 582 |      |   | 588   |  |   | 1,363 |  
|Interest
 expense to affiliates                                          |  |      | 16  |      |   | 41    |  |   | 255   |  
|Service fees
 to affiliates                                              |  |      | 1   |      |   | 1     |  |   | 173   |  
|Other, net                                                               |  |      | (71 | )    |   | 1     |  |   | (198  | )
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Total expenses                                                           |  |      | 656 |      |   | 845   |  |   | 2,234 |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Pretax
 income                                                           |  |      | 324 |      |   | 370   |  |   | 996   |  
|Income tax
 (benefit) provision                                          |  |      | (24 | )    |   | 8     |  |   | 132   |  
|                                                                         |  |      |     |      |   |       |  |   |       |  
|Net income                                                               |  | $    | 348 |      | $ | 362   |  | $ | 864   |  
|                                                                         |  |      |     |      |   |       |  |   |       |  

See Notes to Consolidated Financial
Statements.

F-3

---



CONSOLIDATED
BALANCE SHEETS
AMERICAN EXPRESS CREDIT CORPORATION

|                                                                                                       |  |      |        |      |   |        |  
|------------------------------------------------------------------------------------------------------ |  | ---- | ------ | ---- | - | ------ | -
|                                                                                                       |  |      |        |      |   |        |  
|December 31, (Millions, except share data)                                                             |  | 2010 |        | 2009 |  
|                                                                                                       |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Assets                                                                                                 |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Cash and cash equivalents                                                                              |  | $    | 988    |      | $ | 304    |  
|Cardmember receivables, less reserves:
 2010, $112; 2009, $141                                         |  |      | 12,261 |      |   | 9,752  |  
|Cardmember loans, less reserves: 2010, $9;
 2009, $19                                                  |  |      | 371    |      |   | 455    |  
|Loans to affiliates                                                                                    |  |      | 10,987 |      |   | 10,127 |  
|Investment securities                                                                                  |  |      | ―      |      |   | 2,039  |  
|Deferred charges and other assets                                                                      |  |      | 627    |      |   | 551    |  
|Due from affiliates                                                                                    |  |      | 3,987  |      |   | 5,788  |  
|                                                                                                       |  |      |        |      |   |        |  
|Total assets                                                                                           |  | $    | 29,221 |      | $ | 29,016 |  
|                                                                                                       |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Liabilities and Shareholders Equity                                                                   |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Liabilities                                                                                            |  |      |        |      |   |        |  
|Short-term debt                                                                                        |  | $    | 645    |      | $ | 1,017  |  
|Short-term debt to affiliates                                                                          |  |      | 3,781  |      |   | 3,893  |  
|Long-term debt                                                                                         |  |      | 18,983 |      |   | 19,478 |  
|                                                                                                       |  |      |        |      |   |        |  
|Total debt                                                                                             |  |      | 23,409 |      |   | 24,388 |  
|Due to affiliates                                                                                      |  |      | 1,742  |      |   | 864    |  
|Accrued interest and other liabilities                                                                 |  |      | 507    |      |   | 383    |  
|                                                                                                       |  |      |        |      |   |        |  
|Total liabilities                                                                                      |  |      | 25,658 |      |   | 25,635 |  
|                                                                                                       |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Shareholders Equity                                                                                   |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Common stock, $0.10 par value, authorized 3
 million shares; issued and outstanding 1.5 million shares |  |      | ―      |      |   | ―      |  
|Additional paid-in capital                                                                             |  |      | 162    |      |   | 162    |  
|Retained earnings                                                                                      |  |      | 3,496  |      |   | 3,408  |  
|Accumulated other comprehensive (loss)
 income, net of tax:                                            |  |      |        |      |   |        |  
|Net unrealized securities gains, net of
 tax: 2010, $0; 2009, $(8)                                     |  |      | ―      |      |   | 14     |  
|Net unrealized derivatives losses, net of
 tax: 2010, $0; 2009, $2                                     |  |      | ―      |      |   | (3     | )
|Foreign currency translation adjustments,
 net of tax: 2010, $49; 2009, $0                             |  |      | (95    | )    |   | (200   | )
|                                                                                                       |  |      |        |      |   |        |  
|Total accumulated other comprehensive loss                                                             |  |      | (95    | )    |   | (189   | )
|                                                                                                       |  |      |        |      |   |        |  
|Total shareholders equity                                                                             |  |      | 3,563  |      |   | 3,381  |  
|                                                                                                       |  |      |        |      |   |        |  
|Total liabilities and shareholders equity                                                             |  | $    | 29,221 |      | $ | 29,016 |  
|                                                                                                       |  |      |        |      |   |        |  

See Notes to Consolidated Financial
Statements.

F-4

---



CONSOLIDATED
STATEMENTS OF CASH FLOWS
AMERICAN EXPRESS CREDIT CORPORATION

|                                                                                   |  |      |        |      |   |         |   |   |        |  
|---------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------- | - | - | ------ | -
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Years Ended
 December 31,(Millions)                                                |  | 2010 |        | 2009 |   | 2008    |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Cash Flows
from Operating Activities                                               |  |      |        |      |   |         |   |   |        |  
|Net income                                                                         |  | $    | 348    |      | $ | 362     |   | $ | 864    |  
|Adjustments
 to reconcile net income to net cash provided by operating activities: |  |      |        |      |   |         |   |   |        |  
|Provisions for losses                                                              |  |      | 128    |      |   | 214     |   |   | 785    |  
|Amortization and other                                                             |  |      | 29     |      |   | 26      |   |   | 2      |  
|Deferred taxes                                                                     |  |      | 39     |      |   | 17      |   |   | 212    |  
|Changes in
 operating assets and liabilities:                                      |  |      |        |      |   |         |   |   |        |  
|Due from affiliates, net                                                           |  |      | 61     |      |   | 174     |   |   | (258   | )
|Other operating assets and liabilities                                             |  |      | 300    |      |   | 78      |   |   | 450    |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Net cash
 provided by operating activities                                         |  |      | 905    |      |   | 871     |   |   | 2,055  |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Cash Flows
from Investing Activities                                               |  |      |        |      |   |         |   |   |        |  
|Net
 (increase) decrease in cardmember receivables and loans                       |  |      | (2,774 | )    |   | 775     |   |   | 13,441 |  
|Purchase of
 investments                                                           |  |      |       |      |   |        |   |   | (2,637 | )
|Maturity of
 investments                                                           |  |      | 2,000  |      |   | 1,000   |   |   | 600    |  
|Sales of
 investments                                                              |  |      |       |      |   |        |   |   | 1,994  |  
|Net
 (increase) decrease in loans to affiliates                                    |  |      | (194   | )    |   | 3,038   |   |   | (2,791 | )
|Net decrease
 (increase) in due from affiliates                                    |  |      | 2,709  |      |   | (1,438  | ) |   | (933   | )
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Net cash
 provided by investing activities                                         |  |      | 1,741  |      |   | 3,375   |   |   | 9,674  |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Cash Flows
from Financing Activities                                               |  |      |        |      |   |         |   |   |        |  
|Net decrease
 in short-term debt                                                   |  |      | (371   | )    |   | (6,350  | ) |   | (3,726 | )
|Net decrease
 in short-term debt to affiliates                                     |  |      | (127   | )    |   | (4,424  | ) |   | (365   | )
|Issuance of
 long-term debt                                                        |  |      | 2,396  |      |   | 3,697   |   |   | 6,265  |  
|Principal
 payments on long-term debt                                              |  |      | (3,610 | )    |   | (5,322  | ) |   | (7,388 | )
|Dividends
 paid                                                                    |  |      | (260   | )    |   | (400    | ) |   | (580   | )
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Net cash
 used in financing activities                                             |  |      | (1,972 | )    |   | (12,799 | ) |   | (5,794 | )
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Effect on
 exchange rate changes on cash and cash equivalents                      |  |      | 10     |      |   | 2       |   |   | (5     | )
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Net increase
 (decrease) in cash and cash equivalents                              |  |      | 684    |      |   | (8,551  | ) |   | 5,930  |  
|Cash and
 cash equivalents at beginning of year                                    |  |      | 304    |      |   | 8,855   |   |   | 2,925  |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  
|Cash and
 cash equivalents at end of year                                          |  | $    | 988    |      | $ | 304     |   | $ | 8,855  |  
|                                                                                   |  |      |        |      |   |         |   |   |        |  

See Notes to Consolidated Financial
Statements.

F-5

---



CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY
AMERICAN EXPRESS CREDIT CORPORATION

|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|----------------------------------------------- |  | ----- | ----- | -------------- | - | ------------------------ |  | ------------------------------------------ | --- | ---------------- | - | ---- | - | - | ----- | -
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |  
|Three Years
 Ended December 31, 2010 (Millions) |  | Total |       | Common 
 Stock |   | AdditionalPaid-inCapital |  | AccumulatedOtherComprehensive(Loss) Income |     | RetainedEarnings |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Balances as of December 31, 2007                |  | $     | 3,444 |                | $ | ―                        |  | $                                          | 162 |                  | $ | 120  |   | $ | 3,162 |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Comprehensive income:                           |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Net income                                      |  |       | 864   |                |   |                          |  |                                            |     |                  |   |      |   |   | 864   |  
|Change in net unrealized derivatives losses     |  |       | (5    | )              |   |                          |  |                                            |     |                  |   | (5   | ) |   |       |  
|Foreign currency translation adjustments        |  |       | (690  | )              |   |                          |  |                                            |     |                  |   | (690 | ) |   |       |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Total comprehensive income                      |  |       | 169   |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Cash dividends paid                             |  |       | (580  | )              |   |                          |  |                                            |     |                  |   |      |   |   | (580  | )
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Balances as of December 31, 2008                |  |       | 3,033 |                |   | ―                        |  |                                            | 162 |                  |   | (575 | ) |   | 3,446 |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Comprehensive income:                           |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Net income                                      |  |       | 362   |                |   |                          |  |                                            |     |                  |   |      |   |   | 362   |  
|Change in net unrealized securities gains       |  |       | (14   | )              |   |                          |  |                                            |     |                  |   | (14  | ) |   |       |  
|Change in net unrealized derivatives losses     |  |       | 32    |                |   |                          |  |                                            |     |                  |   | 32   |   |   |       |  
|Foreign currency translation adjustments        |  |       | 368   |                |   |                          |  |                                            |     |                  |   | 368  |   |   |       |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Total comprehensive income                      |  |       | 748   |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Cash dividends paid                             |  |       | (400  | )              |   |                          |  |                                            |     |                  |   |      |   |   | (400  | )
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Balances as of December 31, 2009                |  |       | 3,381 |                |   | ―                        |  |                                            | 162 |                  |   | (189 | ) |   | 3,408 |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Comprehensive income:                           |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Net income                                      |  |       | 348   |                |   |                          |  |                                            |     |                  |   |      |   |   | 348   |  
|Change in net unrealized securities gains       |  |       | (14   | )              |   |                          |  |                                            |     |                  |   | (14  | ) |   |       |  
|Change in net unrealized derivatives losses     |  |       | 3     |                |   |                          |  |                                            |     |                  |   | 3    |   |   |       |  
|Foreign currency translation adjustments        |  |       | 105   |                |   |                          |  |                                            |     |                  |   | 105  |   |   |       |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Total comprehensive income                      |  |       | 442   |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Cash dividends paid                             |  |       | (260  | )              |   |                          |  |                                            |     |                  |   |      |   |   | (260  | )
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  
|Balances as of December 31, 2010                |  | $     | 3,563 |                | $ | ―                        |  | $                                          | 162 |                  | $ | (95  | ) | $ | 3,496 |  
|                                                |  |       |       |                |   |                          |  |                                            |     |                  |   |      |   |   |       |  

See Notes to Consolidated Financial
Statements.

F-6

---



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS 
AMERICAN EXPRESS CREDIT CORPORATION

Note 1 Summary of
Significant Accounting Policies

Basis of Presentation

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

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

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

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 entities in which it holds a controlling
financial interest. For voting interest entities, Credco is considered to hold
a controlling financial interest when Credco is able to exercise control over
the investees operating and financial decisions. For variable interest
entities (VIEs), Credco is considered to hold a controlling financial interest
when it is determined to be the primary beneficiary. Prior to the adoption of
ASU No. 2009-17, Consolidation (Topic 810): Improvements to Financial Reporting
by Enterprises Involved with Variable Interest Entities (effective January 1,
2010), a primary beneficiary was the party that absorbs a majority of the VIEs
expected residual returns. For VIEs subsequent to the adoption of ASU No.
2009-17, a primary beneficiary is a party that has both: (1) the power to direct
the activities of a VIE that most significantly impact that entitys economic
performance, and (2) the obligation to absorb losses, or the right to receive
benefits, from the VIE that could potentially be significant to the VIE. The
determination of whether an entity is a VIE is based on the amount and
characteristics of the entitys equity.

Entities in which Credcos voting interest in common equity does not
provide Credco with control, but allows Credco to exert significant influence
over their financial and operating decisions are accounted for under the equity
method. All other investments in equity securities, to the extent that they are
not considered marketable securities, are accounted for under the cost method.

Certain reclassifications of prior year amounts have been made to
conform to the current presentation. These reclassifications had no impact on
net income or total shareholders equity.

F-7

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
AMERICAN EXPRESS CREDIT CORPORATION

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 (loss) income (AOCI), a component of
shareholders equity. Translation adjustments, including qualifying hedge and
tax effects, are reclassified to earnings upon the sale or substantial
liquidation of investments in foreign operations. Revenues and expenses are
translated at the average month-end exchange rates during the year. Gains and
losses related to transactions in a currency other than the functional
currency, including operations outside the U.S. where the functional currency
is the U.S. dollar, are reported net in Credcos Consolidated Statements of
Income, in interest expense or other, net expense, depending on the nature of
the activity. Net foreign currency transaction gains amounted to approximately
$93 million, $34 million and $207 million in 2010, 2009 and 2008, respectively.

Amounts Based on Estimates and Assumptions

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

Discount Revenue Earned from Purchased
Cardmember Receivables and Loans

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

Interest Income from Affiliates

Interest income from affiliates is earned on interest-bearing loans
made by Credco to affiliates. Interest income is accrued primarily using the
average daily balance method on loans owned and is recognized based on the
outstanding loan principle amount and interest rates specified in the
agreements until the outstanding loan balance is paid.

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 a
constant rate of return is recognized on the securitys outstanding balance.
These amounts are recognized until such time as a security is in default or
when it is likely that future interest payments will not be made as scheduled.

Finance Revenue

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

Interest Expense

Interest expense includes interest incurred primarily to fund
cardmember loans, charge card product receivables, general corporate purposes,
and liquidity needs, and is recognized as incurred.

Cash and Cash Equivalents

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

F-8

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
AMERICAN EXPRESS CREDIT CORPORATION

Other Significant Accounting PoliciesThe following table identifies Credcos other significant accounting
policies, along with the Note and page where a detailed description of each
policy can be found.

|                                                         |  |            |  |                                     |  |     
|-------------------------------------------------------- |  | ---------- |  | ----------------------------------- |  | ----
|                                                        
|Significant Accounting Policy                            |  | NoteNumber |  | Note Title                          |  | Page
|                                                         |  |            |  |                                     |  |     
|Fair Value
 Measurements                                 |  | Note 2     |  | Fair Values                         |  | F-10
|Cardmember
 Receivables and Loans                        |  | Note 3     |  | Cardmember
 Receivables and Loans   |  | F-13
|Reserves for
 Losses  Cardmember Receivables and Loans  |  | Note 4     |  | Reserves for
 Losses                |  | F-15
|Investment
 Securities                                   |  | Note 5     |  | Investment
 Securities              |  | F-17
|Derivative
 Financial Instruments and Hedging Activities |  | Note 8     |  | Derivatives
 and Hedging Activities |  | F-19
|Income Taxes                                             |  | Note 13    |  | Income Taxes                        |  | F-27
|                                                         |  |            |  |                                     |  |     

Recently Issued Accounting Standards

The Financial Accounting Standards Board (FASB) recently issued
Accounting Standards Update (ASU) No. 2010-20, Receivables (Topic 310):
Disclosures about the Credit Quality of Financing Receivables and the Allowance
for Credit Losses. This standard is intended to provide additional information
to assist financial statement users in assessing an entitys credit risk
exposures and evaluating the adequacy of its allowance for credit losses. As
such, the standard amends existing guidance by requiring an entity to provide a
greater level of disaggregated information about its financing receivables and
its allowance for credit losses and includes new disclosures such as credit quality
indicators, past due information and additional impaired loan data. Effective
December 31, 2010, Credco adopted these amendments except for disclosures of
activity within periods, which become effective for periods beginning January
1, 2011. Additionally, certain new disclosures for Troubled Debt Restructurings
were not implemented because such disclosures have been deferred by ASU No.
2011-01, Receivables (Topic 310): Deferral of the Effective Date of Disclosures
about Troubled Debt Restructurings in Update No. 2010-20, and are expected to
be effective for periods beginning April 1, 2011.

In addition, Credco adopted the following standards:

|  |                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------
| | ASU No. 2009-16, Transfers and Servicing (Topic 860): Accounting for
 Transfers of Financial Assets, and                                  
|  |                                                                                                                                           
| | ASU No. 2009-17, Consolidations (Topic 810): Improvements to
 Financial Reporting by Enterprises Involved with Variable Interest Entities.

These standards eliminated the concept of a qualifying special purpose
entity (QSPE), therefore requiring these entities to be evaluated under the
accounting guidance for consolidation of VIEs. In addition, ASU 2009-17
required an entity to reconsider its previous consolidation conclusions reached
under the VIE consolidation model, including (i) whether an entity is a VIE,
(ii) whether the enterprise is the VIEs primary beneficiary, and (iii) the
required financial statement disclosures. The adoption of these accounting
standards did not have an impact on Credcos financial position or results of
operations and Credco continues to consolidate American Express Canada Credit
Corporation (AECCC), its VIE subsequent to the adoption of the standards.
However, due to the adoption of these standards, certain cardmember loans
purchased by Credco were reclassified to loans to affiliates.

F-9

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
AMERICAN EXPRESS CREDIT CORPORATION

Note 2 Fair
Values

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

GAAP provides for a three-level hierarchy of inputs to valuation
techniques used to measure fair value, defined as follows:

|  |                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                  
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -----------------------------------------------------------------------------------------------------------------
| | Level 1  Inputs that are quoted prices (unadjusted) for identical
 assets or liabilities in active markets.                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                  
| | Level 2  Inputs other than quoted prices included within Level 1
 that are observable for the asset or liability, either directly or
 indirectly, for substantially the full term of the asset or liability,
 including:                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                     | - | Quoted prices for similar assets or liabilities in active markets                                                
|  |                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                     | - | Quoted prices for identical or similar assets or liabilities in
 markets that are not active                     
|  |                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                     | - | Inputs other than quoted prices that are observable for the asset or
 liability                                  
|  |                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                     | - | Inputs that are derived principally from or corroborated by
 observable market data by correlation or other means
|  |                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                  
| | Level 3  Inputs that are unobservable and reflect Credcos own
 assumptions about the assumptions market participants would use in pricing
 the asset or liability based on the best information available in the
 circumstances (e.g., internally derived assumptions surrounding the timing
 and amount of expected cash flows).

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

|                                   |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|---------------------------------- |  | ----- | --- | ------- | - | ------- |  | ------- | --- | ----- | - | ------- |  | ------- | ----- | ------- | - | - |  | - | ----- |  | - | -
|                                   |  |       |     |        
|                                   |  | 2010  |     | 2009   
|                                   |  |       |     |        
|(Millions)                         |  | Total |     | Level 1 |   | Level 2 |  | Level 3 |     | Total |   | Level 1 |  | Level 2 |       | Level 3
|                                   |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|Assets                             |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|Investment securities             |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|U.S. Government agency obligations |  | $     |    |         | $ |        |  | $       |    |       | $ |        |  | $       | 2,039 |         | $ |  |  | $ | 2,039 |  | $ | 
|Derivatives (a)                    |  |       | 498 |         |   |        |  |         | 498 |       |   |        |  |         | 318   |         |   |  |  |   | 318   |  |   | 
|                                   |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|Total assets                       |  | $     | 498 |         | $ |        |  | $       | 498 |       | $ |        |  | $       | 2,357 |         | $ |  |  | $ | 2,357 |  | $ | 
|                                   |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|                                   |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|Liabilities                        |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|Derivatives (a)                    |  | $     | 81  |         | $ |        |  | $       | 81  |       | $ |        |  | $       | 68    |         | $ |  |  | $ | 68    |  | $ | 
|                                   |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  
|Total liabilities                  |  | $     | 81  |         | $ |        |  | $       | 81  |       | $ |        |  | $       | 68    |         | $ |  |  | $ | 68    |  | $ | 
|                                   |  |       |     |         |   |         |  |         |     |       |   |         |  |         |       |         |   |   |  |   |       |  |   |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Refer
 to Note 8 for the fair values of derivative assets and liabilities on a
 further disaggregated basis. While derivative assets and derivative
 liabilities are presented gross in the table above, GAAP permits the netting
 of derivative assets and derivative liabilities when a legally enforceable
 master netting agreement exists between Credco and its derivative counterparty.
 As of December 31, 2010 and 2009, $1 million and $2 million, respectively, of
 derivative assets and liabilities have been offset and presented net on the
 Consolidated Balance Sheets.

F-10

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
AMERICAN EXPRESS CREDIT CORPORATION

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

Valuation
Techniques Used in Measuring Fair Value

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

Investment
Securities

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | When available, quoted market prices in active markets are used to
 determine fair value. Such investment securities are classified within Level
 1 of the fair value hierarchy. There were no investment securities as of
 December 31, 2010. As of December 31, 2009, none of Credcos investment
 securities were classified as Level 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | When quoted prices in an active market are not available, the fair
 values for Credcos investment securities are obtained primarily from a
 pricing service engaged by Credco and Credco receives one price for each
 security. The fair values provided by the pricing service are estimated by
 using pricing models, where the inputs to those models are based on
 observable market inputs. The inputs to the valuation techniques applied by
 the pricing service vary depending on the type of security being priced but
 are typically benchmark yields, benchmark security prices, credit spreads,
 prepayment speeds, reported trades and broker-dealer quotes, all with
 reasonable levels of transparency. The pricing service did not apply any
 adjustments to the pricing models used. In addition, Credco did not apply any
 adjustments to prices received from the pricing service. Credco classifies
 the prices obtained from the pricing service within Level 2 of the fair value
 hierarchy because the underlying inputs are directly observable from active
 markets or recent trades of similar securities in inactive markets. However,
 the pricing models used do entail a certain amount of subjectivity and
 therefore differing judgments in how the underlying inputs are modeled could
 result in different estimates of fair value.

Credco reaffirms its understanding of the valuation techniques used by
its pricing service at least annually. In addition, Credco corroborates the
prices provided by its pricing service to test their reasonableness by
comparing their prices to valuations from different pricing sources. Refer to
Note 5 for additional fair value information.

Derivative
Financial Instruments

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

Credit valuation adjustments are necessary when the market parameters,
such as a benchmark curve, used to value derivatives are not indicative of the
credit quality of Credco or its counterparties. Credco considers the
counterparty credit risk by applying an observable forecasted default rate to
the current exposure. Refer to Note 8 for additional fair value information.

F-11

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
AMERICAN EXPRESS CREDIT CORPORATION

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

|                                                                       |  |                  |    |              |   |                  |  |              |    |  |   |   
|---------------------------------------------------------------------- |  | ---------------- | -- | ------------ | - | ---------------- |  | ------------ | -- |  | - | --
|                                                                       |  |                  |    |             
|(Billions)                                                             |  | 2010             |    | 2009        
|                                                                       |  |                  |    |              |   |                  |  |              |    |  |   |   
|                                                                       |  | Carrying 
 Value |    | Fair 
 Value |   | Carrying 
 Value |  | Fair 
 Value
|                                                                       |  |                  |    |              |   |                  |  |             
|Financial Assets:                                                      |  |                  |    |              |   |                  |  |              |    |  |   |   
|Assets for
 which carrying values equal or approximate fair value      |  | $                | 18 |              | $ | 18               |  | $            | 16 |  | $ | 16
|Loans to
 affiliates                                                   |  | $                | 11 |              | $ | 11               |  | $            | 10 |  | $ | 10
|Financial Liabilities:                                                 |  |                  |    |              |   |                  |  |              |    |  |   |   
|Liabilities
 for which carrying values equal or approximate fair value |  | $                | 7  |              | $ | 7                |  | $            | 6  |  | $ | 6 
|Long-term
 debt                                                        |  | $                | 19 |              | $ | 19               |  | $            | 19 |  | $ | 20
|                                                                       |  |                  |    |              |   |                  |  |              |    |  |   |   

The fair values of these financial instruments are estimates based upon
the market conditions and perceived risks as of December 31, 2010 and 2009, and
require management judgment. These figures may not be indicative of their
future fair values. The fair value of Credco cannot be reliably estimated by
aggregating the amounts presented.

The following methods were used to determine estimated fair values:

Financial
Assets for Which Carrying Values Equal or Approximate Fair Value

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

Financial
Assets Carried at Other than Fair Value

Loans to affiliates

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

Financial
Liabilities for Which Carrying Values Equal or Approximate Fair Value

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

Financial
Liabilities Carried at Other than Fair Value

Long-term debt

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

F-12

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
AMERICAN EXPRESS CREDIT CORPORATION

Note 3 Cardmember
Receivables and Loans

Cardmember Receivables

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

Credco records these cardmember receivables at the time they are
purchased from TRS and certain of its subsidiaries that issue the card (card
issuers). Cardmember receivable balances are presented on the Consolidated
Balance Sheets, net of reserves for losses (refer to Note 4), and typically
include principal and any related accrued fees. Cardmember receivables also
include participation interests purchased from an affiliate. Participation interests
in cardmember receivables represent undivided interests in the cash flows of
the non-interest-bearing cardmember receivables and are purchased without
recourse by Credco Receivables Corporation (CRC) from American Express
Receivables Financing Corporation V LLC (RFC V). As of December 31, 2010 and
2009, CRC owned approximately $3.7 billion and $2.9 billion, respectively, of
participation interests in cardmember receivables purchased from RFC V.

Cardmember receivables as of December 31, 2010 and 2009 consisted of:

|                                                 |  |      |        |      |   |      
|------------------------------------------------ |  | ---- | ------ | ---- | - | -----
|                                                 |  |      |        |     
|(Millions)                                       |  | 2010 |        | 2009
|                                                 |  |      |        |     
|U.S.
 Consumer and Small Business Services       |  | $    | 3,497  |      | $ | 2,744
|International
 and Global Commercial Services    |  |      | 8,876  |      |   | 7,149
|                                                 |  |      |        |      |   |      
|Gross
 Cardmember receivables                    |  |      | 12,373 |      |   | 9,893
|Less:
 Cardmember receivables reserve for losses |  |      | 112    |      |   | 141  
|                                                 |  |      |        |      |   |      
|Cardmember
 receivables, net (a)                 |  | $    | 12,261 |      | $ | 9,752
|                                                 |  |      |        |      |   |      

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

Cardmember Loans

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

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

F-13

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Cardmember
loans consisting of loans in the International Card Services portfolio, as of
December 31, 2010 and 2009 consisted of:

|                                           |  |      |     |      |   |    
|------------------------------------------ |  | ---- | --- | ---- | - | ---
|                                           |  |      |     |      |   |    
|(Millions)                                 |  | 2010 |     | 2009
|                                           |  |      |     |     
|Cardmember
 loans, gross                   |  | $    | 380 |      | $ | 474
|Less:
 Cardmember loans reserve for losses |  |      | 9   |      |   | 19 
|                                           |  |      |     |      |   |    
|Cardmember loans, net (a)                  |  | $    | 371 |      | $ | 455
|                                           |  |      |     |      |   |    

|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(a) | There are no cardmember
 loans modified in a troubled debt restructuring (TDR) program.

Cardmember Receivables and Cardmember Loans
Aging

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

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

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | For
 cardmember receivables in International and Global Commercial Services,
 delinquency data is tracked based on past billing status rather than past
 due. A cardmember account is considered 90 days past billing if payment has
 not been received within 90 days of the cardmembers billing statement date.
 In addition, if Credco initiates collection procedures on an account prior to
 the account becoming 90 days past billing, the associated cardmember
 receivable balance is considered as 90 days past billing. These amounts are
 shown above as 90+ Days Past Due for presentation purposes.
|(b) | Historically,
 data for periods prior to 90 days past billing are not available due to
 system constraints. Therefore, it has not been utilized for risk management
 purposes. The balances that are current― 89 days
 past due can be derived as the difference between the Total and the 90+ Days
 Past Due balances.                                                                                                                                                                                                                                                                                          
|(c) | Cardmember
 loans over 90 days past due continue to accrue interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-14

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Credit Quality Indicators for Cardmember
Receivables and Cardmember Loans

The following table presents the key credit quality indicators for the
years ended December 31:

|                                              |  |                        |     |                                      |  |                  |     |                                      |     |   |  |     |  
|--------------------------------------------- |  | ---------------------- | --- | ------------------------------------ |  | ---------------- | --- | ------------------------------------ | --- | - |  | --- | -
|                                              |  |                        |     |                                      |  |                  |     |                                      |     |   |  |     |  
|                                              |  | 2010                   |     | 2009                                 | 
|                                              |  |                        |     |                                      | 
|(Millions,
 except percentages)               |  | Net
 Write-
 off
 Rate | (a) | 30
 Days
 Past Due
 as a % of
 Total |  | NetWrite-offRate | (a) | 30
 Days
 Past Due
 as a % of
 Total |    
|                                              |  |                        |     |                                      |  |                  |     |                                      |    
|U.S. Consumer and Small
 Business Services    |  |                        |     |                                      |  |                  |     |                                      |     |   |  |     |  
|Cardmember Receivables                        |  |                        | 1.4 | %                                    |  | 1.2              | %   |                                      | 2.9 | % |  | 1.5 | %
|International Card Services
 Cardmember Loans |  |                        | 2.2 | %                                    |  | 3.6              | %   |                                      | 4.9 | % |  | 5.9 | %
|                                              |  |                        |     |                                      |  |                  |     |                                      |     |   |  |     |  

|                                              |  |                                             |        |                                                 |     |                                             |     |                                                 |     |   |  |     |  
|--------------------------------------------- |  | ------------------------------------------- | ------ | ----------------------------------------------- | --- | ------------------------------------------- | --- | ----------------------------------------------- | --- | - |  | --- | -
|                                              |  |                                             |        |                                                 |     |                                             |     |                                                 |     |   |  |     |  
|                                              |  | 2010                                        |        | 2009                                            |    
|                                              |  |                                             |        |                                                 |    
|(Millions,
 except percentages)               |  | Net
 Loss
 Ratio as a
 % of
 Charge
 Volume | (b)(c) | 90
 Days
 Past
 Billing
 as a % of
 Receivables | (c) | Net
 Loss
 Ratio as a
 % of
 Charge
 Volume | (b) | 90
 Days
 Past
 Billing
 as a % of
 Receivables |    
|                                              |  |                                             |        |                                                 |     |                                             |     |                                                 |    
|International and Global
 Commercial Services |  |                                             |        |                                                 |     |                                             |     |                                                 |     |   |  |     |  
|Cardmember Receivables                        |  |                                             | 0.1    | %                                               |     | 0.9                                         | %   |                                                 | 0.2 | % |  | 1.5 | %
|                                              |  |                                             |        |                                                 |     |                                             |     |                                                 |     |   |  |     |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Credcos
 write-offs, net of recoveries, are expressed as a percentage of the average
 amount of cardmember receivables owned by Credco at the beginning of the year
 and at the end of each month in each of the years indicated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(b) | Credcos
 write-offs, net of recoveries, are expressed as a percentage of the volume of
 cardmember receivables purchased by Credco in each of the years indicated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(c) | Effective
 January 1, 2010, American Express revised the time period in which past due
 cardmember receivables for its International Card Services and Global
 Commercial Services segments are written off to 180 days past due or earlier,
 consistent with applicable bank regulatory guidance and the write-off
 methodology adopted for U.S. Consumer and Small Business receivables in the
 fourth quarter of 2008. Previously, these cardmember receivables were written
 off when they were 360 days past billing or earlier. The net write-offs for
 the first quarter of 2010 include net write-offs resulting from this
 write-off methodology change which decreased the 90 days past billing metrics
 for these cardmember receivables but did not have a significant impact on
 provisions for losses.

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

Note 4 Reserves for Losses

Reserves for Losses  Cardmember Receivables
and Loans

Reserves for losses relating to cardmember receivables and loans
represent managements best estimate of the losses inherent in Credcos
outstanding portfolios. Credcos total provision for losses was $128 million,
$214 million and $641 million for the years ended December 31, 2010, 2009 and
2008, respectively. Managements evaluation process requires certain estimates
and judgments.

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

F-15

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

reserve coverage metrics, such as reserves as a percentage of past-due
amounts, reserves as a percentage of cardmember receivables or loans and net
write-off coverage.

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

Changes in Cardmember Receivables Reserve for Losses

The following table presents changes in the cardmember receivables
reserve for losses for years ended December 31:

|                                             |  |      |     |      |   |      |  |   |      
|-------------------------------------------- |  | ---- | --- | ---- | - | ---- |  | - | -----
|                                             |  |      |     |      |   |      |  |   |      
|(Millions)                                   |  | 2010 |     | 2009 |   | 2008
|                                             |  |      |     |      |   |     
|Balance,
 January 1                          |  | $    | 141 |      | $ | 204  |  | $ | 832  
|Additions:                                   |  |      |     |      |   |      |  |   |      
|Cardmember receivables provisions (a)        |  |      | 124 |      |   | 186  |  |   | 625  
|Other credits (b)                            |  |      | 36  |      |   | 12   |  |   | 46   
|Deductions:                                  |  |      |     |      |   |      |  |   |      
|Cardmember receivables net write-offs (c)(d) |  |      | 169 |      |   | 240  |  |   | 1,193
|Other charges (e)                            |  |      | 20  |      |   | 21   |  |   | 106  
|                                             |  |      |     |      |   |      |  |   |      
|Balance,
 December 31                        |  | $    | 112 |      | $ | 141  |  | $ | 204  
|                                             |  |      |     |      |   |      |  |   |      

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Represents
 loss provisions for cardmember receivables consisting of principal (resulting
 from authorized transactions) and fee reserve components.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(b) | Represents
 reserve balances applicable to new groups of cardmember receivables purchased
 from TRS and certain of its subsidiaries and participation interests
 purchased from affiliates. New groups of cardmember receivables purchased
 totaled $3.6 billion, $1.8 billion and $1.9 billion for the years ended
 December 31, 2010, 2009 and 2008, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(c) | Represents
 write-offs consisting of principal (resulting from authorized transactions)
 and fee components, less recoveries of $111 million, $67 million and $131
 million for the years ended December 31, 2010, 2009 and 2008, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(d) | Effective
 January 1, 2010, American Express revised the time period in which past due
 cardmember receivables for its International and Global Commercial Services
 segments are written off to 180 days past due or earlier, consistent with
 applicable bank regulatory guidance. Previously, these cardmember receivables
 were written off when they were 360 days past billing. The net write-offs for
 2010 include write-offs resulting from the 180 days write-off methodology
 change for International and Global Commercial Services cardmember
 receivables. The impact of this change to the provision for charge card
 losses was not material. In the fourth quarter of 2008, American Express
 revised the time period in which past due cardmember receivables in U.S.
 Consumer and Small Business Services are written off to when 180 days past
 due, consistent with applicable regulatory guidance. Previously, these
 receivables were written off when 360 days past due. The net write-offs for
 2008 include write-offs resulting from the 180 days write-off methodology
 change for U.S. Consumer and Small Business Services cardmember receivables.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(e) | Primarily
 relates to reserve balances applicable to certain groups of cardmember
 receivables and participation interests sold to affiliates. Cardmember
 receivables and participation interest sold to affiliates totaled $2.7
 billion, $2.3 billion and $2.0 billion for the years ended December 31, 2010,
 2009 and 2008, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Changes in Cardmember Loans Reserve for
Losses

The following
table presents changes in the cardmember loans reserve for losses for years
ended December 31:

|                                    |  |      |    |      |   |      |  |   |   
|----------------------------------- |  | ---- | -- | ---- | - | ---- |  | - | --
|                                    |  |      |    |      |   |      |  |   |   
|(Millions)                          |  | 2010 |    | 2009 |   | 2008
|                                    |  |      |    |      |   |     
|Balance,
 January 1                 |  | $    | 19 |      | $ | 14   |  | $ | 9 
|Additions:                          |  |      |    |      |   |      |  |   |   
|Cardmember loans provisions (a)     |  |      | 4  |      |   | 28   |  |   | 16
|Deductions:                         |  |      |    |      |   |      |  |   |   
|Cardmember loans net write-offs (b) |  |      | 10 |      |   | 23   |  |   | 11
|Other charges (c)                   |  |      | 4  |      |   | ―    |  |   | ― 
|                                    |  |      |    |      |   |      |  |   |   
|Balance,
 December 31               |  | $    | 9  |      | $ | 19   |  | $ | 14
|                                    |  |      |    |      |   |      |  |   |   

|    |                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Represents
 loss provisions for cardmember loans consisting of principal (resulting from
 authorized transactions), interest and fee reserves components.                               
|    |                                                                                                                                                                                         
|(b) | Cardmember
 loans net write-offs for 2010, 2009 and 2008, include recoveries
 of $8 million, $8 million and $13 million, respectively. Recoveries of
 interest and fees were de minimis.
|    |                                                                                                                                                                                         
|(c) | These
 amounts include foreign currency translation adjustments.                                                                                                                        

F-16

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Note 5 Investment
Securities

Investment securities include debt securities that are classified as
available for sale. Credcos investment securities are carried at fair value on
the Consolidated Balance Sheets with unrealized gains (losses) recorded in
AOCI, net of income tax provisions (benefits). Realized gains and losses are
recognized in results of operations upon disposition of the securities using
the specific identification method on a trade date basis. Refer to Note 2 for a
description of Credcos methodology for determining the fair value of its
investment securities. The following is a summary of investment securities as
of December 31:

|                                   |  |      |   |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                        |   |    |  |   |   |  |   |      
|---------------------------------- |  | ---- | - | ------------------------ | - | ------------------------- |  | --------------------- | - | ---- | - | ------------------------ |  | ------------------------- | ----- | ---------------------- | - | -- |  | - | - |  | - | -----
|                                   |  |      |   |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                        |   |    |  |   |   |  |   |      
|(Millions)                         |  | 2010 |   | 2009                    
|                                   |  |      |   |                         
|                                   |  | Cost |   | Gross
 Unrealized
 Gains |   | Gross
 Unrealized
 Losses |  | Estimated
 Fair Value |   | Cost |   | Gross
 Unrealized
 Gains |  | Gross
 Unrealized
 Losses |       | Estimated
 Fair
 Value
|                                   |  |      |   |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                       
|U.S. Government agency obligations |  | $    |  |                          | $ |                          |  | $                     |  |      | $ |                         |  | $                         | 2,017 |                        | $ | 22 |  | $ |  |  | $ | 2,039
|                                   |  |      |   |                          |   |                           |  |                       |   |      |   |                          |  |                           |       |                        |   |    |  |   |   |  |   |      

During 2010, all investment securities matured. For the years ended
December 31, 2010 and 2009, Credco did not have any sales of investment
securities and therefore had no gross realized gains and losses thereon. For
the year ended December 31, 2008, gross realized gains and losses on the sales
of investment securities were $13 million and $8 million, respectively.

Note 6 Debt

Short-Term Debt

Credcos short-term debt outstanding (excluding short-term debt to
affiliates), defined as borrowings with original maturities of less than one
year, as of December 31 were as follows:

|                               |  |                      |     |                               |     |                      |   |                               |       |  |  |      |  
|------------------------------ |  | -------------------- | --- | ----------------------------- | --- | -------------------- | - | ----------------------------- | ----- |  |  | ---- | -
|                               |  |                      |     |                               |     |                      |   |                               |       |  |  |      |  
|                               |  | 2010                 |     | 2009                          |    
|                               |  |                      |     |                               |    
|(Millions, except percentages) |  | Outstanding
 Balance |     | Year-End Stated
 Rate on Debt | (a) | Outstanding
 Balance |   | Year-End Stated
 Rate on Debt | (a)  
|                               |  |                      |     |                               |     |                      |   |                               |      
|Commercial
 paper              |  | $                    | 645 |                               |     | 0.16                 | % | $                             | 975   |  |  | 0.19 | %
|Bank notes
 payable            |  |                      | ―   |                               |     | ―                    |   |                               | 42    |  |  | 2.81 | %
|                               |  |                      |     |                               |     |                      |   |                               |       |  |  |      |  
|Total                          |  | $                    | 645 |                               |     | 0.16                 | % | $                             | 1,017 |  |  | 0.30 | %
|                               |  |                      |     |                               |     |                      |   |                               |       |  |  |      |  

|    |                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | For
 floating rate debt issuances, the stated interest rates are based on the
 floating rates in effect as of December 31, 2010 and 2009, respectively.
 These rates may not be an indication of future interest rates.

Credco paid interest on short-term debt, including interest paid on
short-term debt to affiliates, obligations and corresponding interest rate
swaps of $20 million, $63 million and $649 million for the years ended December
31, 2010, 2009 and 2008, respectively. Refer to Note 10 for more details on
short-term debt to affiliates.

F-17

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Long-Term Debt

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

|                                        |  |                 |           |                      |      |                                 |      |                                                |        |                      |     |                                 |     |                                                  |        |  |  |      |   |  |       | 
|--------------------------------------- |  | --------------- | --------- | -------------------- | ---- | ------------------------------- | ---- | ---------------------------------------------- | ------ | -------------------- | --- | ------------------------------- | --- | ------------------------------------------------ | ------ |  |  | ---- | - |  | ----- | 
|                                        |  |                 |           |                      |      |                                 |      |                                                |        |                      |     |                                 |     |                                                  |        |  |  |      |   |  |       | 
|                                        |  |                 |           |                      | 2010 |                                 | 2009 |                                               
|                                        |  |                 |           |                      |      |                                 |      |                                               
|(Millions,
 except percentages)         |  | Maturity
 Dates |           | Outstanding
 Balance | (a)  | Year-End
 Stated
 Rate
 on Debt | (b)  | Year-EndEffective
 Interest
 Rates with
 Swaps | (b)(c) | Outstanding
 Balance | (a) | Year-End
 Stated
 Rate
 on Debt | (b) | Year-End
 Effective
 Interest
 Rates with
 Swaps | (b)(c)
|                                        |  |                 |           |                      |      |                                 |      |                                                |        |                      |     |                                 |     |                                                  |       
|Fixed Rate Senior Notes (d)             |  |                 | 2011-2015 |                      | $    | 12,413                          |      |                                                | 5.15   | %                    |     | 3.07                            | %   | $                                                | 11,485 |  |  | 5.58 | % |  | 3.26%
|Floating Rate Senior Notes              |  |                 | 2011-2013 |                      |      | 2,480                           |      |                                                | 1.51   | %                    |     | ―                               |     |                                                  | 4,761  |  |  | 1.30 | % |  | ―    
|Borrowings under Bank Credit Facilities |  |                 | 2012      |                      |      | 4,118                           |      |                                                | 5.33   | %                    |     | 5.38                            | %   |                                                  | 3,232  |  |  | 4.23 | % |  | 4.52%
|Unamortized Underwriting Fees           |  |                 |           |                      |      | (28                             | )    |                                                |        |                      |     |                                 |     |                                                  | ―      |  |  |      |   |  |       | 
|                                        |  |                 |           |                      |      |                                 |      |                                                |        |                      |     |                                 |     |                                                  |        |  |  |      |   |  |       | 
|Total Long-Term Debt                    |  |                 |           |                      | $    | 18,983                          |      |                                                | 4.71   | %                    |     |                                 |     | $                                                | 19,478 |  |  | 4.29 | % |  |       | 
|                                        |  |                 |           |                      |      |                                 |      |                                                |        |                      |     |                                 |     |                                                  |        |  |  |      |   |  |       | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The
 outstanding balances include (i) unamortized discounts, (ii) the impact of
 movements in exchange rates on foreign currency denominated debt ($0.6
 billion and $1.2 billion as of December 31, 2010 and 2009, respectively), and
 (iii) the impact of fair value hedge accounting on certain fixed-rate notes
 that have been swapped to floating rate through the use of interest swaps.
 Under fair value hedge accounting the outstanding balances on these
 fixed-rate notes are adjusted to reflect the impact of changes in fair value
 due to changes in interest rates. As of December 31, 2010 and 2009, the
 impact on long-term debt due to fair value hedge accounting was an increase
 of $380 million and $265 million, respectively. Refer to Note 8 for more
 details on Credcos treatment of fair value hedges.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | For
 floating rate debt issuances, the stated and effective interest rates are
 based on the floating rates in effect as of December 31, 2010 and 2009,
 respectively. These rates are not indicative of future interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(c) | Effective
 interest rates are only presented when swaps are in place to hedge the
 underlying debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(d) | As
 of December 31, 2010 and 2009, Credcos outstanding debt includes $7 million
 of long-term notes held by an affiliate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

Aggregate annual maturities of long-term debt obligations (based on
final maturity dates) as of December 31, 2010 were as follows:

|                               |  |   |        |  
|------------------------------ |  | - | ------ | -
|                               |  |   |        |  
|(Millions)                     |  |   |        |  
|                               |  |   |       
|2011                           |  | $ | 2,150  |  
|2012                           |  |   | 5,686  |  
|2013                           |  |   | 5,118  |  
|2014                           |  |   | 3,573  |  
|2015                           |  |   | 2,484  |  
|                               |  |   |        |  
|Total                          |  |   | 19,011 |  
|                               |  |   |        |  
|Unamortized
 Underwriting Fees |  |   | (28    | )
|                               |  |   |        |  
|Total
 Long-Term Debt          |  | $ | 18,983 |  
|                               |  |   |        |  

Credco paid interest on long-term debt obligations and corresponding
interest rate swaps of $0.6 billion, $0.6 billion and $1.0 billion for the
years ended December 31, 2010, 2009 and 2008, respectively.

As of December 31, 2010 and 2009, Credco maintained total bank lines of
credit of $9.8 billion and $11.4 billion, respectively. Of these amounts, $5.7
billion and $8.2 billion were unutilized as of December 31, 2010 and 2009,
respectively, and supported commercial paper borrowings. American Express had
the right to draw up to $0.8 billion and $1.3 billion on these undrawn lines of
credit as of December 31, 2010 and 2009, respectively, which would have resulted
in a corresponding reduction of the amount available to Credco. The drawn
amounts under these bank lines are classified as long-term debt on the
accompanying Consolidated Balance Sheets. Credco paid $6.4 million and $5.8

F-18

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

million in fees to maintain these lines for the years ended December
31, 2010 and 2009, respectively. The availability of these credit lines is
subject to compliance with certain financial covenants, including the
maintenance of a 1.25 ratio of earnings to fixed charges. As of December 31,
2010, Credcos ratio of earnings to fixed charges was 1.54.

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

As of December 31, 2010 and 2009, Credco was not in
violation of any of its debt covenants.

Note 7
Restrictions as to Dividends and Limitations on Indebtedness

The most restrictive limitation on dividends imposed by the debt
instruments issued by Credco is the requirement that Credco maintain a minimum
consolidated net worth of $50.0 million. There are no limitations on the amount
of debt that can be issued by Credco, provided it maintains the minimum fixed
charge coverage ratio of 1.25.

Note 8
Derivatives and Hedging Activities

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

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

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

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

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

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

Derivatives may give rise to counterparty credit risk. Credco manages
this risk by considering the current exposure, which is the replacement cost of
contracts on the measurement date, as well as estimating the maximum potential
value of the contracts over the next 12 months, considering such factors as the
volatility of the underlying or reference index. To mitigate derivative credit
risk, counterparties are required to be pre-approved and rated as investment
grade. Counterparty risk exposures are monitored by American Express
Institutional Risk Management Committee (IRMC). The IRMC formally reviews large
institutional exposures to ensure compliance with American Express ERMC
guidelines and procedures and determines the risk mitigation actions, when
necessary. Additionally, Credco has, in

F-19

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

certain limited instances, entered into agreements with its derivative
counterparties in order to mitigate the bilateral counterparty credit risk
associated with derivatives. These agreements include master netting
agreements, which may provide a right of offset for certain exposures between
the parties.

In relation to Credcos credit risk, under the terms of the derivative
agreements it has with its various counterparties, Credco is not required to
either immediately settle any outstanding liability balances or post collateral
upon the occurrence of a specified credit risk-related event. In relation to
counterparty credit risk, as of December 31, 2010 and 2009, such risk
associated with Credcos derivatives was not significant.

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

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

|                                                         |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|-------------------------------------------------------- |  | ------------------------------------------ | --- | ----------------------------------------------- | - | ---- |  | ---- | -- |  | - | --
|                                                         |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|                                                         |  | Deferred Charges andOther AssetsFair Value |     | Accrued Interest andOther LiabilitiesFair Value
|                                                         |  |                                            |     |                                                
|(Millions)                                               |  | 2010                                       |     | 2009                                            |   | 2010 |  | 2009
|                                                         |  |                                            |     |                                                 |   |      |  |     
|Derivatives designated as hedging
 instruments:          |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Interest rate contracts                                  |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Fair value hedges                                        |  | $                                          | 444 |                                                 | $ | 293  |  | $    | 38 |  | $ | 6 
|Cash flow hedges                                         |  |                                            | 2   |                                                 |   | 1    |  |      | 2  |  |   | 5 
|Foreign exchange contracts                               |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Net investment hedges                                    |  |                                            | ―   |                                                 |   | 9    |  |      | 16 |  |   | 7 
|                                                         |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Total derivatives designated as hedging
 instruments     |  | $                                          | 446 |                                                 | $ | 303  |  | $    | 56 |  | $ | 18
|                                                         |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Derivatives not designated as hedging
 instruments:      |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Interest rate contracts                                  |  | $                                          | 1   |                                                 | $ | ―    |  | $    | 3  |  | $ | 5 
|Foreign exchange contracts                               |  |                                            | 51  |                                                 |   | 15   |  |      | 22 |  |   | 45
|                                                         |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Total derivatives not designated as hedging
 instruments |  |                                            | 52  |                                                 |   | 15   |  |      | 25 |  |   | 50
|                                                         |  |                                            |     |                                                 |   |      |  |      |    |  |   |   
|Total derivatives (a)                                    |  | $                                          | 498 |                                                 | $ | 318  |  | $    | 81 |  | $ | 68
|                                                         |  |                                            |     |                                                 |   |      |  |      |    |  |   |   

|    |                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | GAAP
 permits the netting of derivative assets and derivative liabilities when a
 legally enforceable master netting agreement exists between Credco and its
 derivative counterparty. As of December 31, 2010 and 2009, $1 million and $2
 million, respectively, of derivative assets and liabilities have been offset
 and presented net on the Consolidated Balance Sheets.

Derivative Financial Instruments that Qualify
for Hedge Accounting

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

Fair Value Hedges

A fair value hedge involves a derivative designated to hedge Credcos
exposure to future changes in the fair value of an asset or a liability, or an
identified portion thereof that is attributable to a particular risk. Credco is
exposed to interest rate risk associated with its fixed-rate long-term debt.
Credco uses interest rate swaps to convert certain fixed-rate long-term debt to
floating-rate at the time of issuance. As of December 31, 2010 and 2009, Credco
hedged $8.9 billion and $7.5 billion, respectively, of its fixed-rate debt to
floating-rate debt using interest rate swaps. To the extent the fair value hedge
is effective, the gain or loss on the hedging instrument offsets the loss or
gain on the hedged item attributable to the hedged risk. Any difference between
the changes in the fair value of the derivative and the hedged item is referred
to as hedge ineffectiveness and is reflected in earnings as a component of
other, net

F-20

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

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

The following table summarizes the impact on the Consolidated
Statements of Income associated with Credcos hedges of fixed-rate long-term
debt described above:

|                                                     |          |                                     |      |             |        |                                                                  |      |      |          |        |      |  |                     |  |      |      |      |   |      |  |      |      |   |   |   |  |   |   |  |   |    |  | 
|---------------------------------------------------- | -------- | ----------------------------------- | ---- | ----------- | ------ | ---------------------------------------------------------------- | ---- | ---- | -------- | ------ | ---- |  | ------------------- |  | ---- | ---- | ---- | - | ---- |  | ---- | ---- | - | - | - |  | - | - |  | - | -- |  | 
|                                                     |          |                                     |      |             |        |                                                                  |      |      |          |        |      |  |                     |  |      |      |      |   |      |  |      |      |   |   |   |  |   |   |  |   |    |  | 
|For the years ended December 31:                    
|                                                     |          |                                     |      |             |        |                                                                  |      |      |          |        |      |  |                     |  |      |      |      |   |      |  |      |      |   |   |   |  |   |   |  |   |    |  | 
|(Millions)                                           |          | Gains (losses) recognized in income
|                                                     |          |                                    
|                                                     |          | Derivative contract                 |      | Hedged item |        | Net hedge
                                       ineffectiveness
|                                                     |          |                                     |      |             |       
|                                                     |          |                                     |      |             | Amount |                                                                  |      |      |          | Amount |     
|Derivative
                             relationship |          |                                     |      |             |        |                                                                  |      |      |          |        |      | 
|                                                     | Location |                                     | 2010 |             | 2009   |                                                                  | 2008 |      | Location |        | 2010 |  | 2009                |  | 2008 |      | 2010 |   | 2009 |  | 2008
|                                                     |          |                                     |      |             |        |                                                                  |      |      |          |        |      |  |                     |  |      |      |      |   |      |  |      |     
|Interest rate contracts                              |          | Other, net expenses                 |      | $           | 119    |                                                                  | $    | (144 | )        | $      | 401  |  | Other, net expenses |  | $    | (115 | )    | $ | 146  |  | $    | (381 | ) | $ | 4 |  | $ | 2 |  | $ | 20
|                                                     |          |                                     |      |             |        |                                                                  |      |      |          |        |      |  |                     |  |      |      |      |   |      |  |      |      |   |   |   |  |   |   |  |   |    |  | 

Credco also recognized a net reduction in interest expense on long-term
debt and other of $259 million, $206 million and $43 million for December 31,
2010, 2009 and 2008, respectively, primarily related to the net settlements
(interest accruals) on Credcos interest rate derivatives designated as fair
value hedges.

Cash Flow Hedges

A cash flow hedge involves a derivative designated to hedge Credcos
exposure to variable future cash flows attributable to a particular risk. Such
exposures may relate to either an existing recognized asset or liability, or a
forecasted transaction. Credco hedges existing long-term variable-rate debt,
the rollover of short-term borrowings and the anticipated forecasted issuance
of additional funding through the use of derivatives, primarily interest rate
swaps. These derivative instruments effectively convert floating-rate debt to
fixed-rate debt for the duration of the instrument. As of December 31, 2010 and
2009, Credco hedged $0.8 billion and $0.6 billion, respectively, of its
floating debt using interest rate swaps.

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

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

Net Investment Hedges

A net investment hedge is used to hedge future changes in currency
exposure of a net investment in a foreign operation. Credco primarily
designates foreign currency derivatives, typically foreign exchange forwards,
and on occasion foreign currency denominated debt, as hedges of net investments
in certain foreign operations. These instruments reduce exposure to changes in
currency exchange rates on Credcos investments in non-U.S. subsidiaries. The
effective portion of the gain or loss on net investment hedges is recorded in
AOCI as part of the cumulative translation adjustment. Any ineffective portion
of the gain or loss on net investment hedges is recognized in other, net
expenses during the period of change.

F-21

---



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTSAMERICAN EXPRESS CREDIT CORPORATION

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

|                                  |  |                                      |  |                                             |    |      |   |                             |   |          |      |      |                     |      |   |      |  |   |   |  |   |   | 
|--------------------------------- |  | ------------------------------------ |  | ------------------------------------------- | -- | ---- | - | --------------------------- | - | -------- | ---- | ---- | ------------------- | ---- | - | ---- |  | - | - |  | - | - | 
|                                  |  |                                      |  |                                             |    |      |   |                             |   |          |      |      |                     |      |   |      |  |   |   |  |   |   | 
|For the years ended December
 31: | 
|                                  | 
|                                  |  | Gains
 (losses) recognized in income | 
|                                  |  |                                      | 
|                                  |  |                                      |  | Amount
 reclassified from
 AOCI into income |    |      |   | Net
 hedge
 ineffectiveness |  
|                                  |  |                                      |  |                                             |    |      |   |                             |  
|(Millions)                        |  | Location                             |  | 2010                                        |    | 2009 |   | 2008                        |   | Location |      | 2010 |                     | 2009 |   | 2008 | 
|                                  |  |                                      |  |                                             |    |      |   |                             |   |          |      |      |                     |      |   |      | 
|Cash flow hedges: (a)             |  |                                      |  |                                             |    |      |   |                             |   |          |      |      |                     |      |   |      |  |   |   |  |   |   | 
|Interest rate contracts           |  | Interest expense                     |  | $                                           | (3 | )    | $ | (60                         | ) | $        | (111 | )    | Other, net expenses |      | $ |     |  | $ |  |  | $ |  | 
|Net investment hedges:            |  |                                      |  |                                             |    |      |   |                             |   |          |      |      |                     |      |   |      |  |   |   |  |   |   | 
|Foreign exchange contracts        |  | Other, net expenses                  |  | $                                           |   |      | $ |                            |   | $        |     |      | Other, net expenses |      | $ |     |  | $ |  |  | $ |  | 
|                                  |  |                                      |  |                                             |    |      |   |                             |   |          |      |      |                     |      |   |      |  |   |   |  |   |   | 

|    |                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------
|(a) | During the years ended
 December 31, 2010 and 2009, there were no forecasted transactions that were
 considered no longer probable to occur.

Derivatives Not Designated as Hedges

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

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

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

|                                  |  |                            |  |        |     |      |   |      |   |   |     |  
|--------------------------------- |  | -------------------------- |  | ------ | --- | ---- | - | ---- | - | - | --- | -
|                                  |  |                            |  |        |     |      |   |      |   |   |     |  
|For the
 years ended December 31: |  |                            |  |        |     |      |   |      |   |   |     |  
|                                  |  |                            |  |        |     |      |   |      |   |   |     |  
|(Millions)                        |  | Gains recognized in income | 
|                                  |  |                            | 
|                                  |  |                            |  | Amount |    
|                                  |  |                            |  |        |    
|                                  |  | Location                   |  | 2010   |     | 2009 |   | 2008 |  
|                                  |  |                            |  |        |     |      |   |      |  
|Interest
 rate contracts          |  | Other, net
 expenses       |  | $      | 2   |      | $ |     |   | $ | (1  | )
|Foreign
 exchange contracts       |  | Other, net
 expenses       |  |        | 106 |      |   | (9   | ) |   | (40 | )
|                                  |  | Interest
 expense          |  |        | 43  |      |   | 39   |   |   | 20  |  
|                                  |  |                            |  |        |     |      |   |      |   |   |     |  
|Total                             |  |                            |  | $      | 151 |      | $ | 30   |   | $ | (21 | )
|                                  |  |                            |  |        |     |      |   |      |   |   |     |  

Note 9 Variable
Interest Entity

Credco has established a VIE, AECCC, used primarily to loan funds to
affiliates. Credco has a shelf registration in Canada for a medium-term note
program providing for the issuance of notes by AECCC. All notes issued under
this program are fully guaranteed by Credco. These medium-term note issuances
are the primary source of financing loans to the Canadian affiliate. Credco is
considered the primary beneficiary of the entity and owns all of the
outstanding voting interests and therefore, consolidates the entity in
accordance with accounting guidance governing consolidation of VIEs. Total
assets as of December 31, 2010 and 2009 were $2.4 billion and $2.3 billion,
respectively, and are eliminated in consolidation. Total liabilities as of
December 31, 2010 and 2009 were $2.3 billion and $2.2 billion, respectively,
and are primarily recorded in long-term debt. As of December 31, 2010, $501
million of liabilities were eliminated in consolidation. The assets of the VIE
are not used solely to settle the obligations of the VIE. The note holders of
the VIE have recourse to Credco.

F-22

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Note 10
Transactions with Affiliates

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

In 2010, 2009 and 2008, Credco purchased cardmember receivables and
  loans without recourse from TRS and certain of its subsidiaries totaling
  approximately $163 billion, $120 billion and $244 billion, respectively. In
  2010, 2009 and 2008, Credco sold cardmember receivables and participating
  interests to affiliates totaling $2.7 billion, $2.3 billion and $2.0 billion,
  respectively. The receivables agreements require TRS and other card issuers, at
  their expense, to perform accounting, clerical and other services necessary to
  bill and collect all cardmember receivables and loans owned by Credco. Since
  settlements under the agreements occur monthly, an amount due from, or payable
  to, such affiliates may arise at the end of each month.
  As of December 31, 2010
  and 2009, CRC owned approximately $3.7 billion and $2.9 billion, respectively,
  of participation interests purchased from RFC V. 
  Other transactions with
  American Express and its subsidiaries as of or for the years ended December 31
  were as follows:

|                                                                |  |      |        |      |   |        |   |   |        |  
|--------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|                                                                |  |      |        |      |   |        |   |   |        |  
|(Millions)                                                      |  | 2010 |        | 2009 |   | 2008   |  
|                                                                |  |      |        |      |   |        |  
|Loans to
 affiliates                                            |  | $    | 10,987 |      | $ | 10,127 |   | $ | 11,726 |  
|Average
 interest rate on loans to affiliates                   |  |      | 4.58   | %    |   | 4.29   | % |   | 6.36   | %
|Due from
 affiliates                                            |  |      | 3,987  |      |   | 5,788  |   |   | 3,660  |  
|Due to affiliates                                               |  |      | 1,742  |      |   | 864    |   |   |       |  
|Maximum
 month-end level of loans to affiliates during the year |  |      | 10,987 |      |   | 11,718 |   |   | 14,046 |  
|Short-term
 debt to affiliates                                  |  |      | 3,781  |      |   | 3,893  |   |   | 8,317  |  
|Average
 interest rate on short-term debt to affiliates         |  |      | 0.34   | %    |   | 0.48   | % |   | 1.05   | %
|Maximum
 month-end level of borrowings during the year          |  |      | 6,320  |      |   | 14,662 |   |   | 12,583 |  
|Interest
 income from affiliates                                |  |      | 466    |      |   | 432    |   |   | 744    |  
|Other income
 from affiliates                                   |  |      | 9      |      |   | 7      |   |   | 8      |  
|Interest
 paid to affiliates                                    |  |      | 16     |      |   | 48     |   |   | 280    |  
|Interest
 expense to affiliates                                 |  |      | 16     |      |   | 41     |   |   | 255    |  
|Service fees
 to affiliates (a)                                 |  |      | 1      |      |   | 1      |   |   | 173    |  
|                                                                |  |      |        |      |   |        |   |   |        |  

|    |                                                                         
|--- | ------------------------------------------------------------------------
|(a) | Fees paid to affiliates for
 related servicing of receivables purchased.

Credcos loans to affiliates represent fixed and floating rate
interest-bearing intercompany borrowings by other wholly-owned TRS subsidiaries
and American Express. Revenue earned from cardmember receivables with recourse
and cardmember receivables and loans funded by loans to affiliates is recorded
as interest income from affiliates in the Consolidated Statements of Income. As
of December 31, 2010 and 2009, no significant amount of loss reserves has been
recorded and no loans are 30 days or more past due.

F-23

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

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

|                                           |  |      |        |      |   |       
|------------------------------------------ |  | ---- | ------ | ---- | - | ------
|                                           |  |      |        |     
|(Millions)                                 |  | 2010 |        | 2009
|                                           |  |      |        |     
|TRS Subsidiaries:                          |  |      |        |      |   |       
|American Express Australia Limited         |  | $    | 3,935  |      | $ | 3,687 
|Amex Bank of Canada                        |  |      | 2,969  |      |   | 2,728 
|American Express Services Europe Limited   |  |      | 2,698  |      |   | 2,710 
|American Express International, Inc.       |  |      | 519    |      |   | 221   
|American Express Co. (Mexico) S.A. de C.V. |  |      | 483    |      |   | 432   
|American Express Bank (Mexico) S.A.        |  |      | 383    |      |   | 349   
|                                           |  |      |        |      |   |       
|Total (a)                                  |  | $    | 10,987 |      | $ | 10,127
|                                           |  |      |        |      |   |       

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | As of December 31, 2010,
 Credco had $11.0 billion of outstanding loans to affiliates, of which
 approximately $7.6 billion are collateralized by the underlying cardmember
 receivables transferred with recourse and the remaining $3.4 billion are
 uncollateralized loans primarily with affiliated banks. As of December 31,
 2009, Credco had $10.1 billion of outstanding loans to affiliates, of which
 approximately $7.0 billion are collateralized by the underlying cardmember
 receivables transferred with recourse and the remaining $3.1 billion are
 uncollateralized loans primarily with affiliated banks.

Due to/from affiliates
relate primarily to a timing difference resulting from the purchase of
cardmember receivables net of remittances from TRS, as well as from operating
activities.

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

|                                              |  |      |       |      |   |      
|--------------------------------------------- |  | ---- | ----- | ---- | - | -----
|                                              |  |      |       |     
|(Millions)                                    |  | 2010 |       | 2009
|                                              |  |      |       |     
|AE Exposure Management Ltd.                   |  | $    | 2,789 |      | $ | 2,087
|American Express Holdings (Netherlands)
 C.V. |  |      | 295   |      |   | 294  
|American Express Swiss Holdings               |  |      | 191   |      |   | 130  
|National Express Company, Inc.                |  |      | 158   |      |   | 142  
|American Express Europe Limited               |  |      | 100   |      |   | 150  
|American Express                              |  |      | 11    |      |   | 948  
|Other                                         |  |      | 237   |      |   | 142  
|                                              |  |      |       |      |   |      
|Total                                         |  | $    | 3,781 |      | $ | 3,893
|                                              |  |      |       |      |   |      

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

Service Fees to Affiliates

Certain affiliates do not explicitly charge Credco a servicing fee for
the servicing of receivables purchased. Instead Credco receives a lower
discount rate on the receivables sold to Credco than would be the case if
servicing fees were charged explicitly, as the discount rate on receivables
purchased by Credco is adjusted to generate income for Credco that is
sufficient to maintain its minimum fixed charge coverage ratio. If a servicing
fee had been charged by these affiliates from which Credco purchases
receivables, servicing fees to affiliates would have been higher by
approximately $120 million, $126 million and $152 million for the years ended
December 31, 2010, 2009 and 2008, respectively. Correspondingly, discount
revenue would have increased by approximately the same amounts in these
periods.

F-24

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Note 11
Significant Credit Concentrations

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

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

|                                                 |  |      |    |      |   |   
|------------------------------------------------ |  | ---- | -- | ---- | - | --
|                                                 |  |      |    |     
|(Billions)                                       |  | 2010 |    | 2009
|                                                 |  |      |    |     
|Cardmember
 receivables and loans  individuals  |  | $    | 7  |      | $ | 5 
|Cardmember
 receivables and loans  institutions |  |      | 2  |      |   | 1 
|Loans to
 affiliate                              |  |      | 11 |      |   | 10
|Due from
 affiliate                              |  |      | 4  |      |   | 6 
|U.S.
 Government and agencies obligations        |  |      |   |      |   | 2 
|All other (a)                                    |  |      | 5  |      |   | 5 
|                                                 |  |      |    |      |   |   
|Total (b)                                        |  | $    | 29 |      | $ | 29
|                                                 |  |      |    |      |   |   

|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(a) | All other primarily includes cardmember receivables
 from other corporate institutions.
|(b) | Certain distinctions between categories require
 management judgment.                  

As of December 31, 2010 and 2009, Credcos most significant
concentration of credit risk was primarily with cardmember receivables and
loans. Credco purchased cardmember receivables and loans from TRS and certain
of its subsidiaries. TRS generally advances these amounts on an unsecured
basis. However, TRS reviews each potential customers credit application and
evaluates the applicants financial history and ability and willingness to
repay. TRS also considers, on behalf of Credco, credit performance by customer
tenure, industry and geographic location in managing credit exposure.

The following table details Credcos cardmember receivables and loans
exposure in the United States and outside the United States as of December 31:

|                           |  |      |    |      |   |   
|-------------------------- |  | ---- | -- | ---- | - | --
|                           |  |      |    |     
|(Billions)                 |  | 2010 |    | 2009
|                           |  |      |    |     
|United
 States             |  | $    | 10 |      | $ | 7 
|Outside the
 United States |  |      | 3  |      |   | 3 
|                           |  |      |    |      |   |   
|Total                      |  | $    | 13 |      | $ | 10
|                           |  |      |    |      |   |   

The
remainder of Credcos on-balance sheet credit exposure includes cash and cash
equivalents, loans to affiliates, due from affiliates and deferred charges and
other assets. The majority of these balances are primarily outside the United
States.

F-25

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Note 12 Changes
in Accumulated Other Comprehensive (Loss) Income

AOCI is a balance sheet item in the Shareholders Equity section of
Credcos Consolidated Balance Sheets. It is comprised of items that have not
been recognized in earnings but may be recognized in earnings in the future
when certain events occur. Changes in each component of AOCI for the three
years ended December 31 were as follows:

|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|----------------------------------------------------------------- |  | ----------------------------------------------------------- | --- | ----------------------------------------------------- | - | ------------------------------------------- | - | ------------------------------------------------ | ---- | - | - | ---- | -
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |     
|(Millions, net of tax)                                            |  | Net
 Unrealized
 Gains
 (Losses) on
 Investment
 Securities |     | Net
 Unrealized
 Gains (Losses)
 on Cash
 Flow Hedges |   | Foreign
 Currency
 Translation
 Adjustments |   | Accumulated
 Other
 Comprehensive
 (Loss) Income |     
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |     
|Balances as of December 31, 2007                                  |  | $                                                           | 28  |                                                       | $ | (30                                         | ) | $                                                | 122  |   | $ | 120  |  
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Net unrealized gains (losses)                                     |  |                                                             | 3   |                                                       |   | (77                                         | ) |                                                  |     |   |   | (74  | )
|Reclassification for realized (gains)
 losses into earnings       |  |                                                             | (3  | )                                                     |   | 72                                          |   |                                                  |     |   |   | 69   |  
|Foreign currency translation adjustments                          |  |                                                             |    |                                                       |   |                                            |   |                                                  | (876 | ) |   | (876 | )
|Net gains related to hedges of investment
 in foreign operations  |  |                                                             |    |                                                       |   |                                            |   |                                                  | 186  |   |   | 186  |  
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Net change in accumulated other
 comprehensive (loss) income      |  |                                                             |    |                                                       |   | (5                                          | ) |                                                  | (690 | ) |   | (695 | )
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Balances as of December 31, 2008                                  |  |                                                             | 28  |                                                       |   | (35                                         | ) |                                                  | (568 | ) |   | (575 | )
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Net unrealized losses                                             |  |                                                             | (14 | )                                                     |   | (7                                          | ) |                                                  |     |   |   | (21  | )
|Reclassification for realized losses into
 earnings               |  |                                                             |    |                                                       |   | 39                                          |   |                                                  |     |   |   | 39   |  
|Foreign currency translation adjustments                          |  |                                                             |    |                                                       |   |                                            |   |                                                  | 507  |   |   | 507  |  
|Net losses related to hedges of investment
 in foreign operations |  |                                                             |    |                                                       |   |                                            |   |                                                  | (139 | ) |   | (139 | )
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Net change in accumulated other
 comprehensive (loss) income      |  |                                                             | (14 | )                                                     |   | 32                                          |   |                                                  | 368  |   |   | 386  |  
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Balances as of December 31, 2009                                  |  |                                                             | 14  |                                                       |   | (3                                          | ) |                                                  | (200 | ) |   | (189 | )
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Net unrealized (losses) gains                                     |  |                                                             | (14 | )                                                     |   | 1                                           |   |                                                  |     |   |   | (13  | )
|Reclassification for realized losses into
 earnings               |  |                                                             |    |                                                       |   | 2                                           |   |                                                  |     |   |   | 2    |  
|Foreign currency translation adjustments                          |  |                                                             |    |                                                       |   |                                            |   |                                                  | 175  |   |   | 175  |  
|Net losses related to hedges of investment
 in foreign operations |  |                                                             |    |                                                       |   |                                            |   |                                                  | (70  | ) |   | (70  | )
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Net change in accumulated other
 comprehensive (loss) income      |  |                                                             | (14 | )                                                     |   | 3                                           |   |                                                  | 105  |   |   | 94   |  
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  
|Balances as of December 31, 2010                                  |  | $                                                           |    |                                                       | $ |                                            |   | $                                                | (95  | ) | $ | (95  | )
|                                                                  |  |                                                             |     |                                                       |   |                                             |   |                                                  |      |   |   |      |  

F-26

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

The
following table shows the tax impact for the three years ended December 31 for
the changes in each component of accumulated other comprehensive (loss) income:

|                                          |  |      |     |      |   |      |   |   |     |  
|----------------------------------------- |  | ---- | --- | ---- | - | ---- | - | - | --- | -
|                                          |  |      |     |      |   |      |  
|(Millions)                                |  | 2010 |     | 2009 |   | 2008 |  
|                                          |  |      |     |      |   |      |   |   |     |  
|Investment securities                     |  | $    | (8  | )    | $ | (7   | ) | $ | ―   |  
|Cash flow hedges                          |  |      | 2   |      |   | 17   |   |   | (3  | )
|Foreign currency
 translation adjustments |  |      | ―   |      |   | 13   |   |   | (21 | )
|Net investment hedges                     |  |      | (49 | )    |   | ―    |   |   | ―   |  
|                                          |  |      |     |      |   |      |   |   |     |  
|Total tax impact                          |  | $    | (55 | )    | $ | 23   |   | $ | (24 | )
|                                          |  |      |     |      |   |      |   |   |     |  

Note 13 Income
Taxes

---

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

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

|                                            |  |      |     |      |   |      |   |   |      |  
|------------------------------------------- |  | ---- | --- | ---- | - | ---- | - | - | ---- | -
|                                            |  |      |     |      |   |      |  
|(Millions)                                  |  | 2010 |     | 2009 |   | 2008 |  
|                                            |  |      |     |      |   |      |  
|Current income tax (benefit) expense:       |  |      |     |      |   |      |   |   |      |  
|U.S. federal                                |  | $    | (93 | )    | $ | (48  | ) | $ | (148 | )
|U.S. state & local                          |  |      | 2   |      |   | 26   |   |   | 13   |  
|Non-U.S.                                    |  |      | 28  |      |   | 13   |   |   | 55   |  
|                                            |  |      |     |      |   |      |   |   |      |  
|Total current income tax (benefit) expense  |  |      | (63 | )    |   | (9   | ) |   | (80  | )
|                                            |  |      |     |      |   |      |   |   |      |  
|Deferred income tax (benefit) expense:      |  |      |     |      |   |      |   |   |      |  
|U.S. federal                                |  |      | 39  |      |   | 12   |   |   | 217  |  
|U.S. state & local                          |  |      | ―   |      |   | ―    |   |   | ―    |  
|Non-U.S.                                    |  |      | ―   |      |   | 5    |   |   | (5   | )
|                                            |  |      |     |      |   |      |   |   |      |  
|Total deferred income tax (benefit) expense |  |      | 39  |      |   | 17   |   |   | 212  |  
|                                            |  |      |     |      |   |      |   |   |      |  
|Total income tax (benefit) expense          |  | $    | (24 | )    | $ | 8    |   | $ | 132  |  
|                                            |  |      |     |      |   |      |   |   |      |  

A reconciliation of the U.S. federal statutory rate of 35 percent to
Credcos actual income tax rate for the years ended December 31 was as follows:

|                                                        |  |      |       |      |  |       |   |  |       |  
|------------------------------------------------------- |  | ---- | ----- | ---- |  | ----- | - |  | ----- | -
|                                                        |  |      |       |      |  |       |  
|(Millions)                                              |  | 2010 |       | 2009 |  | 2008  |  
|                                                        |  |      |       |      |  |       |  
|Combined tax
 at U.S. statutory federal income tax rate |  |      | 35.0  | %    |  | 35.0  | % |  | 35.0  | %
|Increase
 (decrease) in taxes resulting from:           |  |      |       |      |  |       |   |  |       |  
|State
     and local income taxes                       |  |      | 0.7   |      |  | 4.6   |   |  | 0.9   |  
|Non-U.S. subsidiaries earnings                          |  |      | (41.9 | )    |  | (37.4 | ) |  | (22.6 | )
|Others                                                  |  |      | (1.2  | )    |  | ―     |   |  | ―     |  
|                                                        |  |      |       |      |  |       |   |  |       |  
|Actual tax
 rate                                        |  |      | (7.4  | )%   |  | 2.2   | % |  | 13.3  | %
|                                                        |  |      |       |      |  |       |   |  |       |  

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. These temporary differences result in taxable
or deductible amounts in future years and are measured using the enacted tax
rates and laws that will be in effect when such differences are expected to
reverse. A valuation allowance is established when management determines that
it is more likely than not that all or some portion of the benefit of the
deferred tax assets will not be realized.

F-27

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

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

|                                                            |  |      |    |      |   |   
|----------------------------------------------------------- |  | ---- | -- | ---- | - | --
|                                                            |  |      |    |     
|(Millions)                                                  |  | 2010 |    | 2009
|                                                            |  |      |    |     
|Deferred tax assets:                                        |  |      |    |      |   |   
|Reserves not yet deducted for tax purposes                  |  | $    | 10 |      | $ | 11
|Unremitted foreign earnings                                 |  |      |   |      |   | 25
|Net unrealized derivatives losses                           |  |      |   |      |   | 2 
|State income taxes                                          |  |      | 22 |      |   | 22
|Other                                                       |  |      | 1  |      |   | 1 
|                                                            |  |      |    |      |   |   
|Gross deferred tax assets                                   |  |      | 33 |      |   | 61
|                                                            |  |      |    |      |   |   
|Deferred tax liabilities:                                   |  |      |    |      |   |   
|Net unrealized securities gains                             |  |      |   |      |   | 8 
|Unremitted foreign earnings                                 |  |      | 10 |      |   |  
|Net investment hedges (foreign exchange
 forward contracts) |  |      | 24 |      |   |  
|Other                                                       |  |      | 3  |      |   |  
|                                                            |  |      |    |      |   |   
|Gross deferred tax liabilities                              |  |      | 37 |      |   | 8 
|                                                            |  |      |    |      |   |   
|Net deferred tax (liabilities) assets                       |  | $    | (4 | )    | $ | 53
|                                                            |  |      |    |      |   |   

Accumulated earnings of certain non-U.S. subsidiaries, which totaled
approximately $3.1 billion as of December 31, 2010, are intended to be
permanently reinvested outside the United States. Credco does not provide for
federal income taxes on foreign earnings intended to be permanently reinvested
outside the United States. Accordingly, federal taxes, which would have
aggregated approximately $1.1 billion, have not been provided on those
earnings.

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

American Express is under continuous examination
    by the Internal Revenue Service (IRS) and tax authorities in other countries
    and states in which American Express has significant business operations.
    The tax years under examination and open for examination vary by jurisdiction.
    In June 2008, the IRS completed its field examination of American Express federal tax
returns for the years 1997 through 2002. In July 2009, the IRS completed its
field examination of American Express federal tax returns for the years 2003
and 2004. However, all of these years continue to remain open as a consequence
of certain issues under appeal. American Express is currently under examination
by the IRS for the years 2005 through 2007.

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

F-28

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

The following
table presents changes in unrecognized tax benefits:

|                                                         |  |      |     |      |   |      |   |   |    |  
|-------------------------------------------------------- |  | ---- | --- | ---- | - | ---- | - | - | -- | -
|                                                         |  |      |     |      |   |      |  
|(Millions)                                               |  | 2010 |     | 2009 |   | 2008 |  
|                                                         |  |      |     |      |   |      |  
|Balance,
 January 1                                      |  | $    | 100 |      | $ | 63   |   | $ | 55 |  
|Increases for tax positions related to the
 current year |  |      | 169 |      |   | 6    |   |   | 2  |  
|Increases for tax positions related to
 prior years      |  |      | 274 |      |   | 37   |   |   | 8  |  
|Decrease for tax positions related to prior
 years       |  |      | (11 | )    |   | (5   | ) |   | (2 | )
|Settlements with tax authorities &
 others               |  |      | (4  | )    |   | (1   | ) |   |   |  
|                                                         |  |      |     |      |   |      |   |   |    |  
|Balance,
 December 31                                    |  | $    | 528 |      | $ | 100  |   | $ | 63 |  
|                                                         |  |      |     |      |   |      |   |   |    |  

Included in the $528 million, $100 million and $63 million of
unrecognized tax benefits as of December 31, 2010, 2009 and 2008, respectively,
are approximately $108 million, $85 million and $53 million, respectively that,
if recognized, would favorably affect the effective tax rate in a future
period. Credco believes it is reasonably possible that the unrecognized tax
benefits could decrease within the next 12 months by as much as $404 million
principally as a result of potential resolutions with taxing authorities. The
$404 million relates to amounts recorded to equity that, if recognized, would
not impact the effective rate.

Interest and penalties relating to unrecognized tax benefits are
reported in the income tax provision. During the years ended December 31, 2010,
2009 and 2008, Credco recognized approximately $(2) million, $11 million and $6
million, respectively of interest and penalties. Credco has approximately $25
million and $27 million accrued for the payment of interest and penalties as of
December 31, 2010 and 2009, respectively.

Current federal taxes due to/from affiliates included current federal
taxes receivable from TRS of $3 million and $17 million as of December 31, 2010
and 2009, respectively.

Income taxes refunded to Credco during 2010 and 2009, including taxes
refunded by TRS, were $156 million and $104 million, respectively.

Note 14
Geographic Regions

GAAP governing
the disclosures about segments of an enterprise and related information
requires public companies to report certain financial information about
significant revenue-producing segments of the business for which such
information is available and utilized by the chief operating decision maker.
Credco is principally engaged in the business of financing the cardmember
receivables and loans of its affiliates. Management makes operating decisions
and assesses performance based on an ongoing review of these financing activities
which constitute Credcos only operating segment for financial reporting
purposes.

The following
presents Credcos revenues and pretax income in different geographic regions:

|                           |  |      |     |      |     |          |  |   |      
|-------------------------- |  | ---- | --- | ---- | --- | -------- |  | - | -----
|                           |  |      |     |      |     |         
|(Millions)                 |  | 2010 | (a) | 2009 | (a) | 2008 (a)
|                           |  |      |     |      |     |         
|Revenues                   |  |      |     |      |     |          |  |   |      
|United
 States             |  | $    | 464 |      | $   | 520      |  | $ | 1,933
|Outside the
 United States |  |      | 516 |      |     | 695      |  |   | 1,297
|                           |  |      |     |      |     |          |  |   |      
|Consolidated               |  | $    | 980 |      | $   | 1,215    |  | $ | 3,230
|                           |  |      |     |      |     |          |  |   |      
|Pretax
 income             |  |      |     |      |     |          |  |   |      
|United
 States             |  | $    | 155 |      | $   | 212      |  | $ | 560  
|Outside the
 United States |  |      | 169 |      |     | 158      |  |   | 436  
|                           |  |      |     |      |     |          |  |   |      
|Consolidated               |  | $    | 324 |      | $   | 370      |  | $ | 996  
|                           |  |      |     |      |     |          |  |   |      

|    |                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The data in the table above
 is, in part, based upon internal allocations which require managements
 judgment. Certain prior year amounts have been reclassified to conform to the
 current year presentation.

F-29

---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS CREDIT CORPORATION

Note 15 Quarterly
Financial Data (Unaudited)

Quarterly
financial information for the years ended December 31 are summarized as
follows:

|                |  |       |     |      |   |      |  |      |     |       |   |      |  |      |     |      |   |     |  |   |     |  |   |    
|--------------- |  | ----- | --- | ---- | - | ---- |  | ---- | --- | ----- | - | ---- |  | ---- | --- | ---- | - | --- |  | - | --- |  | - | ---
|                |  |       |     |     
|(Millions)      |  | 2010  |     | 2009
|                |  |       |     |     
|Quarters
 ended |  | 12/31 |     | 9/30 |   | 6/30 |  | 3/31 |     | 12/31 |   | 9/30 |  | 6/30 |     | 3/31
|                |  |       |     |      |   |      |  |      |     |       |   |      |  |      |     |     
|Revenues        |  | $     | 264 |      | $ | 225  |  | $    | 223 |       | $ | 268  |  | $    | 261 |      | $ | 272 |  | $ | 315 |  | $ | 367
|Pretax
 income  |  |       | 71  |      |   | 72   |  |      | 91  |       |   | 90   |  |      | 76  |      |   | 117 |  |   | 20  |  |   | 157
|Net income      |  |       | 79  |      |   | 82   |  |      | 92  |       |   | 95   |  |      | 93  |      |   | 107 |  |   | 27  |  |   | 135
|                |  |       |     |      |   |      |  |      |     |       |   |      |  |      |     |      |   |     |  |   |     |  |   |    

F-30

---



EXHIBIT INDEXPursuant 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 16, 2009 (File No.
333-160018).                
|            |  |                                                                              |  |                                                                                                                                                        
|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).                 
|            |  |                                                                              |  |                                                                                                                                                        
|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(h) 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).                 

E-1

---



|     |  |                                                                                 |  |                                                                                                                                                        
|---- |  | ------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|4(i) |  | Form of
Extendible Note with optional redemption and repayment provisions       |  | Incorporated
by reference to Exhibit 4(h) to Registrants Registration Statement on Form
S-3 dated June 8, 2006 (File No. 333-134864).                 
|     |  |                                                                                 |  |                                                                                                                                                        
|4(j) |  | Form of
Fixed Rate Note                                                         |  | Incorporated
by reference to Exhibit 4(i) to Registrants Registration Statement on Form
S-3 dated June 8, 2006 (File No. 333-134864).                 
|     |  |                                                                                 |  |                                                                                                                                                        
|4(k) |  | Form of
Floating Rate Note                                                      |  | Incorporated
by reference to Exhibit 4(j) to Registrants Registration Statement on Form
S-3 dated June 8, 2006 (File No. 333-134864).                 
|     |  |                                                                                 |  |                                                                                                                                                        
|4(l) |  | Form of
Warrant Agreement                                                       |  | Incorporated
by reference to Exhibit 4(h) to Registrants Registration Statement on Form
S-3 dated June 16, 2009 (File No.
333-160018).                
|     |  |                                                                                 |  |                                                                                                                                                        
|4(m) |  | Terms and
conditions of debt instruments to be issued outside the United States |  | Incorporated
by reference to Exhibit 4(l) to Registrants Annual Report on Form 10-K
(Commission File No. 1-6908) for the year ended December 31, 1997.
|     |  |                                                                                 |  |                                                                                                                                                        
|4(n) |  | Form of
Permanent Global Fixed Rate Senior Note, Series B                       |  | Incorporated
by reference to Exhibit 4(s) to Registrants Current Report on Form 8-K
(Commission File No. 1-6908) dated December 21, 2001.             
|     |  |                                                                                 |  |                                                                                                                                                        
|4(o) |  | Form of
Permanent Global Floating Rate Senior Note, Series B                    |  | Incorporated
by reference to Exhibit 4(t) to Registrants Current Report on Form 8-K
(Commission File No. 1-6908) dated December 21, 2001.             
|     |  |                                                                                 |  |                                                                                                                                                        
|4(p) |  | Form of
Senior Floating Rate Note Extendible Liquidity 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-2

---



|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|4(t)  |  | Form of
Permanent Global Registered Fixed Rate Senior Note, Series C                                                                                                                                                                                                                                                  |  | Incorporated
by reference to Exhibit 4(l) to Registrants Registration Statement on Form
S-3 dated June 8, 2006 (File No. 333-134864).                       
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(u)  |  | Form of
Permanent Global Registered Floating Rate Senior Note, Series C                                                                                                                                                                                                                                               |  | Incorporated
by reference to Exhibit 4(m) to Registrants Registration Statement on Form
S-3 dated June 8, 2006 (File No. 333-134864).                       
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(v)  |  | Conditions
of Notes to be issued outside the United States under the Registrants
Australian Debt Issuance Program                                                                                                                                                                                                    |  | Incorporated
by reference to Exhibit 4(v) to Registrants Annual Report on Form 10-K
(Commission File No. 1-6908) for the year ended December 31, 2006.      
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(w)  |  | Form of Medium-Term
Note  Master Note relating to the Registrants InterNotes® program                                                                                                                                                                                                                               |  | Incorporated
by reference to Exhibit 4 to Registrants Current Report on Form 8-K
(Commission File No. 1-6908) dated November 23, 2009.                      
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(x)  |  | Trust
Indenture providing for the issuance of Medium-Term Notes dated as of October
28, 2005                                                                                                                                                                                                                          |  | Incorporated
by reference to Exhibit 4.1 to Registrants Quarterly Report on Form 10-Q
(Commission File No. 1-6908) for the quarter ended September 30, 2009.
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(y)  |  | First
Supplemental Indenture dated as of January 22, 2008                                                                                                                                                                                                                                                             |  | Incorporated
by reference to Exhibit 4.2 to Registrants Quarterly Report on Form 10-Q
(Commission File No. 1-6908) for the quarter ended September 30, 2009.
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(z)  |  | Second
Supplemental Indenture dated as of January 22, 2008                                                                                                                                                                                                                                                            |  | Incorporated
by reference to Exhibit 4.3 to Registrants Quarterly Report on Form 10-Q
(Commission File No. 1-6908) for the quarter ended September 30, 2009.
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(aa) |  | Form of
Permanent Global Registered Fixed-Rate Medium Term Senior Note, Series D                                                                                                                                                                                                                                      |  | Incorporated
by reference to Exhibit 4(i) to Registrants Registration Statement on
Form S-3 dated June 16, 2009 (File No. 333-160018)                       
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(bb) |  | Form of
Permanent Global Registered Floating Rate Medium Term Senior Note, Series D                                                                                                                                                                                                                                   |  | Incorporated
by reference to Exhibit 4(j) to Registrants Registration Statement on
Form S-3 dated June 16, 2009 (File No. 333-160018)                       
|      |  |                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                              
|4(cc) |  | The
Registrant hereby agrees to furnish the Commission, upon request, with copies
of the instruments defining the rights of holders of each issue of long-term
debt of the Registrant for which the total amount of securities authorized
thereunder does not exceed 10 percent of the total assets of the Registrant |  |                                                                                                                                                              

E-3

---



|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|10(a) |  | Receivables
Agreement dated as of January 1, 1983 between the Registrant and American
Express Travel Related Services Company, Inc.                                              |  | Incorporated
by reference to Exhibit 10(b) to Registrants Annual Report on Form 10-K
(Commission File No. 1-6908) for the year ended December 31, 1987.      
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|10(b) |  | Amended and
Restated Agreement for Sale and Purchase of Receivables dated as of October
30, 2008 between American Express Centurion Bank and American Express Credit
Corporation |  | Incorporated
by reference to Exhibit 10.1 to Registrants Quarterly Report on Form 10-Q
(Commission File No. 1-6908) for the quarter ended September 30, 2008.
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|10(c) |  | Amended and
Restated Agreement for Sale and Purchase of Receivables dated as of October
30, 2008 between American Express Bank, FSB and American Express Credit
Corporation      |  | Incorporated
by reference to Exhibit 10.2 to Registrants Quarterly Report on Form 10-Q
(Commission File No. 1-6908) for the quarter ended September 30, 2008.
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|12.1  |  | Computation
in Support of Ratio of Earnings to Fixed Charges of American Express Credit
Corporation                                                                              |  | Electronically
filed herewith.                                                                                                                                
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|12.2  |  | Computation
in Support of Ratio of Earnings to Fixed Charges of American Express Company                                                                                         |  | Electronically
filed herewith.                                                                                                                                
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|23.1  |  | Consent of
PricewaterhouseCoopers LLP Independent Registered Public Accounting Firm                                                                                              |  | Electronically
filed herewith.                                                                                                                                
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|31.1  |  | Certification
of David L. Yowan, Chief Executive Officer, pursuant to Rule 13a-14(a)
promulgated under the Securities Exchange Act of 1934, as amended                           |  | Electronically
filed herewith.                                                                                                                                
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|31.2  |  | Certification
of Anderson Y. Lee, Chief Financial Officer, pursuant to Rule 13a-14(a)
promulgated under the Securities Exchange Act of 1934, as amended                          |  | Electronically
filed herewith.                                                                                                                                
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|32.1  |  | Certification
of David L. Yowan, Chief Executive Officer, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002               |  | Electronically
filed herewith.                                                                                                                                
|      |  |                                                                                                                                                                                  |  |                                                                                                                                                               
|32.2  |  | Certification
of Anderson Y. Lee, Chief Financial Officer, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002              |  | Electronically
filed herewith.                                                                                                                                

E-4

---