|                                                       
|-------------------------------------------------------
|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, 2008            
|OR                                                     
|oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
 OF
|THE SECURITIES EXCHANGE ACT OF 1934                    
|For the transition period from _____ to _____          
|Commission File No. 1-6908                             
|                                                       
|AMERICAN
 EXPRESS CREDIT CORPORATION                   
|(Exact name of Registrant as specified in its charter) 

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

|                                                                    |             | 
|------------------------------------------------------------------- | ----------- | 
|One Christina Centre, 301 North Walnut Street                       |             | 
|Suite 1002, Wilmington, Delaware                                    | 19801-2919  | 
|(Address of principal
 executive offices)                           | (Zip
 Code) | 
|Registrants telephone
 number including area code: (302) 594-3350. |             | 

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

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

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

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

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

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

Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days. YesxNoo

Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K 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). YesoNox American Express
Company, through a
 wholly-owned subsidiary, owns all of the outstanding common stock of the
 registrant. Accordingly, there is no market for the registrants common
 stock. At March 30, 2009, 1,504,938 shares were outstanding.

Documents
incorporated by reference: None

---



PART
I

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

Introduction

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

Credco is
primarily engaged in the business of financing non-interest-bearing cardmember
receivables arising from the use of the American Expressâ
Card, the American Expressâ Gold Card,
Platinum Cardâ, Corporate Card and other American Express
Cards issued in the United States, and in designated currencies outside the
United States. Credco also purchases certain interest-bearing and discounted
revolving loans comprised of American Express credit cards and Sign &
Travelâ, although interest-bearing and revolving
loans are primarily funded by subsidiaries of TRS other than Credco. American
Express charge cards and American Express credit cards are collectively
referred to herein as the Card.

American Express Card
Business

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

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

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

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

|  |                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------
| | the Equal
 Credit Opportunity Act (which generally prohibits discrimination in the
 granting and handling

1

---



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

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

General Nature of Credcos Business

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

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

Credco believes the above
changes will lead to a material reduction of purchases of cardmember
receivables.

2

---



However, it is not expected
that these reductions will have a material impact on its fixed charge coverage
ratio. For additional discussion on the fixed charge ratio, refer to page 26
below.

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

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

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

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

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

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

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

Current
Economic Environment/Outlook

During the latter half of 2008,
concerns over the availability and cost of credit, a historic decline in real
estate

3

---



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

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

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

Volume of Business

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

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

The reduction
in volumes of receivables and loans purchased during 2008 and receivables and
loans owned at December 31, 2008, compared to prior periods is primarily due to
the amendment to the Receivables Agreements in October 2008, as discussed
previously, and to a lesser extent to a reduction in purchases resulting from
lower cardmember spending in the fourth quarter of 2008 compared to the same
period a year ago.

4

---



Cardmember Receivables

At December
31, 2008 and 2007, Credco owned $10.9 billion and $26.3 billion of cardmember
receivables, respectively. Cardmember receivables represent amounts due from
charge card customers and are recorded at the time they are purchased from the
seller. Included in cardmember receivables are Credco Receivables Corporation
(CRC)s purchases of the participation interests from American Express Receivables
Financing Corporation V LLC (RFC V) in conjunction with TRS securitization
program. At December 31, 2008 and 2007, CRC owned approximately $2.4 billion
and $5.7 billion, respectively, of participation interests purchased from RFC
V.

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

|                                                         |  |      |        |      |   |        |   |   |        |  
|-------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|Years ended
 December 31, (Millions, except percentages) |  | 2008 |        | 2007 |   | 2006   |  
|                                                         |  |      |        |      |   |        |  
|Total cardmember receivables                             |  | $    | 10,859 |      | $ | 26,335 |   | $ | 27,593 |  
|Loss reserves                                            |  | $    | 204    |      | $ | 831    |   | $ | 739    |  
|as a % of receivables(a)                                 |  |      | 1.9    | %    |   | 3.2    | % |   | 2.7    | %
|Average life of cardmember receivables (in
 days)(b)     |  |      | 33     |      |   | 34     |   |   | 32     |  
|                                                         |  |      |        |      |   |        |   |   |        |  
|Cardmember receivables  180 day write-off
(a)           |  | $    | 2,444  |      |   | N/A    |   |   | N/A    |  
|30 days past due as a % of total                         |  |      | 2.6    | %    |   | N/A    |   |   | N/A    |  
|Average receivables                                      |  | $    | 11,413 |      |   | N/A    |   |   | N/A    |  
|Write-offs, net of recoveries                            |  | $    | 893    |      |   | N/A    |   |   | N/A    |  
|Net write-off rate (a)                                   |  |      | 7.8    | %    |   | N/A    |   |   | N/A    |  
|                                                         |  |      |        |      |   |        |   |   |        |  
|Cardmember receivables  360 day write-off               |  | $    | 8,415  |      | $ | 26,335 |   | $ | 27,593 |  
|90 days past due as a % of total                         |  |      | 2.8    | %    |   | 4.1    | % |   | 3.3    | %
|Write-offs, net of recoveries                            |  | $    | 146    |      | $ | 658    |   | $ | 525    |  
|Net write-off rate (c)                                   |  |      | 0.12   | %    |   | 0.23   | % |   | 0.19   | %
|                                                         |  |      |        |      |   |        |   |   |        |  

(a)In the fourth
quarter of 2008, American Express revised the time period in which past due
cardmember receivables for its U.S. Card Services segment are written off to
180 days past due, consistent with applicable bank regulatory guidance.
Previously, receivables were written off when 360 days past due. Credcos
receivables subject to 180 day write-off and the related net write-off rate,
which reflects write-offs, net of recoveries expressed as a percentage of the
average amount of cardmember receivables owned by Credco at the beginning of the
year and at the end of each month in each of the years indicated, are reflected
above, and includes $257 million of net write-offs as result of the methodology
change. See further discussion in Notes 1 and 2 of the Consolidated Financial
Statements.

(b)Represents the
average life of cardmember receivables owned by Credco, based upon the ratio of
the average amount of both billed and unbilled receivables owned by Credco at
the end of each month, during the years indicated, to the volume of cardmember
receivables purchased by Credco.

(c)Credcos write-offs, net of recoveries, expressed as a percentage of the
volume of cardmember receivables purchased by Credco in each of the years
indicated.

Cardmember
receivables owned at December 31, 2008, decreased approximately $15.5 billion
from December 31, 2007, primarily as a result of a reduction of cardmember
receivables purchased due to the amendment to the Receivables Agreements.

5

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Reserves for Cardmember Receivables and
Cardmember Loans

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

|                                                  |  |      |       |      |   |      |   |   |     |  
|------------------------------------------------- |  | ---- | ----- | ---- | - | ---- | - | - | --- | -
|Years Ended
 December 31, (Millions)              |  | 2008 |       | 2007 |   | 2006 |  
|                                                  |  |      |       |      |   |      |  
|Reserve for losses:                               |  |      |       |      |   |      |   |   |     |  
|Balance at beginning of year                      |  | $    | 841   |      | $ | 749  |   | $ | 686 |  
|Additions:                                        |  |      |       |      |   |      |   |   |     |  
|Provisions for losses (a)                         |  |      | 641   |      |   | 842  |   |   | 589 |  
|Other credits (b)                                 |  |      | 46    |      |   | 14   |   |   | 11  |  
|Deductions:                                       |  |      |       |      |   |      |   |   |     |  
|Accounts written-off (a) (c)                      |  |      | 1,204 |      |   | 666  |   |   | 532 |  
|Other charges (d)                                 |  |      | 106   |      |   | 98   |   |   | 5   |  
|                                                  |  |      |       |      |   |      |   |   |     |  
|                                                  |  |      |       |      |   |      |   |   |     |  
|                                                  |  |      |       |      |   |      |   |   |     |  
|Balance at end of year                            |  | $    | 218   |      | $ | 841  |   | $ | 749 |  
|                                                  |  |      |       |      |   |      |   |   |     |  
|                                                  |  |      |       |      |   |      |   |   |     |  
|Reserve for losses
    as a % of gross cardmember |  |      |       |      |   |      |   |   |     |  
|receivables and loans owned at year-end           |  |      | 1.9   | %    |   | 3.1  | % |   | 2.7 | %
|                                                  |  |      |       |      |   |      |   |   |     |  

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

Loans to Affiliates

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

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

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

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

Due from Affiliates

At December
31, 2008 and 2007, due from affiliates was $3.7 billion and $2.4 billion,
respectively. These amounts relate primarily to a timing difference resulting
from the purchase of cardmember receivables net of

6

---



remittances
from TRS, which are settled in the subsequent month in the normal course of
business.

Short-term Debt to Affiliates

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

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

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

Sources of Funds

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

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

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

7

---



Foreign Operations

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

Employees

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

8

---



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

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

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

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

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

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

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

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

Disruptions,
uncertainty or volatility in the capital and credit markets may also limit
Credcos access to

9

---



capital
required to operate its business. Such market conditions may limit its ability
to replace, in a timely manner, maturing liabilities, satisfy regulatory
capital requirements and access the capital necessary to grow its business. As
such, Credco may be forced to delay raising capital, issue shorter-tenured
securities than it prefers, or bear an unattractive cost of capital, which
could decrease profitability and significantly reduce financial flexibility.

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

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

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

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

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

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

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

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

10

---



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 may decline during periods in which travelers become concerned about
safety issues or when travel might involve health-related risks.

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

The impairment of
other financial institutions could adversely affect Credco.

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

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

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

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

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

11

---



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

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

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

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

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

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

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

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

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

Finally,
Credco must also manage the operational risks to which it is exposed. Credco
considers operational risk to be the risk of not achieving business objectives
due to inadequate or failed processes or information systems, human error, or
the external environment, such as natural disasters. Operational risks include
the risk

12

---



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. See Item 7A Quantitative and Qualitative Disclosures About
Market Risk for a discussion of the policies and procedures Credco uses to identify,
monitor and manage the risks Credco assumes in conducting its businesses.
Management of credit, market and operational risk requires, among other things,
policies and procedures to record properly and verify a large number of
transactions and events, and these policies and procedures may not be fully
effective.

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

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

Other Reporting
Matters

Accounting Developments

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

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

| |   |                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | credit
 trends, which will depend in part on the economic environment, including,
 among other things, the housing market and the rates of bankruptcies, which
 can affect spending on card products and

13

---



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | debt
 payments by individual and corporate customers;                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Credcos
 ability to accurately estimate the provisions for losses in Credcos
 outstanding portfolio of cardmember receivables and loans;                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | fluctuations
 in foreign currency exchange rates;                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | negative
 changes in Credcos credit ratings, which could result in decreased liquidity
 and higher borrowing costs;                                                                                                                                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | changes in
 laws or government regulations affecting American Express business,
 including the potential impact of regulations adopted by federal bank
 regulators relating to certain credit and charge card practices;                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | the effect
 of fluctuating interest rates, which could affect Credcos borrowing costs;                                                                                                                                                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | the impact
 on American Express business resulting from continuing geopolitical
 uncertainty;                                                                                                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Credcos ability to satisfy its
 liquidity needs and execute on its funding plans, which will depend on, among
 other things, Credcos future business growth, its credit ratings, market
 capacity and demand for securities offered by Credco, performance by Credcos
 counterparties under its bank credit facilities and other lending facilities,
 and regulatory changes, including changes to the policies, rules and
 regulations of the Board of Governors of the Federal Reserve System;
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Credcos ability to meet the
 criteria for participation in the Commercial Paper Funding Facility being made
 available through the Federal Reserve Bank of New York; and                                                                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Credcos ability to access in a
 timely manner its remaining investment in the Reserve Primary Fund.                                                                                                                                                                                                                                                                                                                                                                                               

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

None.

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

Credco neither
owns nor leases any material physical properties.

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

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

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

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

14

---



PART
II

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

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

Credco paid
cash dividends of $580 million and $750 million to TRS in 2008 and 2007,
respectively. On February 10, 2009, Credco paid a cash dividend of $75 million
to TRS. For information about limitations on Credcos ability to pay dividends,
see Note 6 to the Consolidated Financial Statements.

15

---



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

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

|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|--------------------------------------------- |  | - | ------ |  | - | ------ |  | - | ------ |  | - | ------ |  | - | ------ | 
|(Millions)                                    |  |   | 2008   |  |   | 2007   |  |   | 2006   |  |   | 2005   |  |   | 2004   | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Income Statement Data                         |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Revenues                                      |  | $ | 3,250  |  | $ | 3,862  |  | $ | 3,017  |  | $ | 2,276  |  | $ | 1,832  | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Provisions
 for losses, net of recoveries     |  |   | 641    |  |   | 842    |  |   | 589    |  |   | 662    |  |   | 628    | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Interest
 expense                             |  |   | 1,618  |  |   | 2,046  |  |   | 1,614  |  |   | 1,141  |  |   | 863    | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Income tax
 provision                         |  |   | 68     |  |   | 57     |  |   | 95     |  |   | 50     |  |   | 75     | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Net income                                    |  |   | 745    |  |   | 720    |  |   | 622    |  |   | 415    |  |   | 234    | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Balance Sheet Data                            |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Cash and
 cash equivalents                    |  | $ | 8,855  |  | $ | 2,925  |  | $ | 737    |  | $ | 1,051  |  | $ | 3,802  | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Gross
 cardmember receivables                 |  |   | 10,859 |  |   | 26,335 |  |   | 27,593 |  |   | 24,421 |  |   | 21,888 | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Reserve for
 losses, cardmember receivables   |  |   | 204    |  |   | 831    |  |   | 739    |  |   | 671    |  |   | 555    | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Gross
 cardmember loans                       |  |   | 498    |  |   | 403    |  |   | 356    |  |   | 569    |  |   | 622    | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Reserve for
 losses, cardmember loans         |  |   | 14     |  |   | 10     |  |   | 10     |  |   | 15     |  |   | 55     | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Loans to
 affiliates                          |  |   | 11,726 |  |   | 11,201 |  |   | 9,691  |  |   | 8,254  |  |   | 7,039  | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Investment
 securities (including restricted) |  |   | 3,084  |  |   | 3,044  |  |   | 3,015  |  |   | 2,996  |  |   | 3,183  | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Total assets                                  |  |   | 39,265 |  |   | 45,843 |  |   | 40,963 |  |   | 37,368 |  |   | 36,259 | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Short-term
 debt                              |  |   | 15,684 |  |   | 19,775 |  |   | 15,469 |  |   | 15,982 |  |   | 13,245 | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Current
 portion of long-term debt            |  |   | 5,201  |  |   | 7,411  |  |   | 3,440  |  |   | 2,300  |  |   | 5,734  | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Long-term
 debt                               |  |   | 14,809 |  |   | 14,872 |  |   | 18,350 |  |   | 14,629 |  |   | 12,880 | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Shareholders
 equity                         |  |   | 3,098  |  |   | 3,446  |  |   | 3,419  |  |   | 3,270  |  |   | 2,992  | 
|                                              |  |   |        |  |   |        |  |   |        |  |   |        |  |   |        | 
|Cash
 dividends                               |  |   | 580    |  |   | 750    |  |   | 500    |  |   | 200    |  |   | 125    | 

16

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

Critical Accounting Policies

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

Reserves for cardmember losses

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

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

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

Fair Value Measurement

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

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

17

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measurement of
fair value based on pricing models with significant observable inputs (Level
2), with the lowest priority given to the measurement of fair value based on
pricing models with significant unobservable inputs (Level 3).

Effective
January 1, 2008, Credco partially adopted SFAS No. 157 for its financial assets
and liabilities that are accounted for at fair value. Refer to Notes 1 and 10 to
the Consolidated Financial Statements for further details of Credcos fair
value measurements.

Investment Securities

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

The fair
market values for Credcos investment securities are obtained primarily from
pricing services engaged by Credco, and Credco receives one price for each
security. The fair values provided by the pricing services are estimated by
using pricing models, where the inputs to those models are based on observable
market inputs. The inputs to the valuation techniques applied by the pricing
services vary depending on the type of security being priced but are typically
benchmark yields, benchmark security prices, credit spreads, prepayment speeds,
reported trades, broker-dealer quotes, all with reasonable levels of
transparency. The pricing services do not apply any adjustments to the pricing
models used, nor does Credco apply any adjustments to prices received from the
pricing services. As of December 31, 2008, all of Credcos investment
securities are classified in Level 2 of the fair value hierarchy. See further
discussion in Note 3 to Credcos Consolidated Financial Statements.

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

Other-Than-Temporary Impairment

Credco reviews
and evaluates its investment securities, at least quarterly, and more often as
market conditions may require, to identify investment securities that have
indications of other-than-temporary impairments. The determination of
other-than-temporary impairment is a subjective process, requiring the use of
judgments and assumptions. Accordingly, Credco considers several metrics when
evaluating investment securities for an other-than-temporary impairment,
including the extent to which amortized cost exceeds fair value, the duration
and size of that difference, and the issuers credit rating. Key factors
considered when assessing other-than-temporary impairment include the
determination of the extent to which the difference is due to increased default
risk for the specific issuers, or market interest rate risk. With respect to
market interest rate risk, including benchmark interest rates and credit
spreads, Credcos intent and ability to hold the investment securities for a
time sufficient to recover the unrealized losses is a significant consideration
in the other-than-temporary evaluation process. See further discussion in Note
3 to Credcos Consolidated Financial Statements.

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

18

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Derivative Instruments

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

The fair
values of Credcos derivative instruments are estimated by using pricing models
that do not contain a high level of subjectivity as the valuation techniques
used do not require significant judgment and inputs to those models are readily
observable from actively quoted markets. The valuation models used by Credco
are consistently applied and reflect the contractual terms of the derivatives,
including the period of maturity, and market-based parameters such as interest
rates, foreign exchange rates, and volatility. In certain instances credit
valuation adjustments are necessary when the market parameters (for example, a
benchmark curve) used to value the derivative instruments are not indicative of
the credit quality of Credco or its counterparties. Credco considers the
counterparty credit risk by applying an observable forecasted default rate to
the current exposure. As of December 31, 2008, the credit and nonperformance
risks associated with Credco derivative counterparties were not significant.

Credco manages
derivative instrument counterparty credit risk by considering the current exposure,
which is the replacement cost of contracts on the measurement date, as well as
estimating the maximum potential value of the contracts over the next twelve
months, considering such factors as the volatility of the underlying or
reference index. To mitigate derivative instrument credit risk, counterparties
are required to be pre-approved and rated as investment grade. Counterparty
risk exposures are monitored by American Express Institutional Risk Management
Committee (IRMC). The IRMC formally reviews large institutional exposures to
ensure compliance with American Express Enterprise-wide Risk Management
Committee guidelines and procedures and determines the risk mitigation actions,
when necessary. Credcos derivative instruments are classified in Level 2 of
the fair value hierarchy. See further discussion in Note 7 to Credcos
Consolidated Financial Statements.

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

Income Taxes

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

Credco
establishes a liability for unrecognized tax benefits, which are the
differences between a tax position taken or expected to be taken in a tax
return and the benefit recognized in the financial statements. In establishing
a liability for an unrecognized tax benefit, assumptions may be made in
determining whether a tax position is more likely than not to be sustained upon
examination by the taxing authority and also in determining the ultimate amount
that is likely to be realized. A tax position is recognized when, based on

19

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managements
judgment regarding the application of income tax laws, it is more likely than not
that the tax position will be sustained upon examination. The amount of tax
benefit recognized is based on managements assessment of the most likely
outcome on ultimate settlement with the taxing authority. This measurement is
based on many factors, including whether a tax dispute may be settled through
negotiation with the taxing authority or is only subject to review in the
courts. As new information becomes available, management evaluates its tax
positions, and adjusts its unrecognized tax benefits, as appropriate.

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

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

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

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

Impact of Credit and Capital Market
Environment

Credit Markets  U.S. Cardmember Receivables

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

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

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

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

Capital Markets

The global
money and capital markets have been experiencing periods of liquidity
disruption and rate volatility since the third quarter of 2007. Liquidity,
benchmark interest rates, and credit concerns were further

20

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exacerbated
during September 2008, fueled by heightened concerns about the global financial
system after the collapse of several large financial institutions in the United
States and elsewhere.

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

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

Investment Portfolio

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

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

Government Sponsored Enterprises

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

Money Market Fund

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

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

Consolidated Capital Resources and Liquidity

Credcos
balance sheet management objectives are to maintain a broad, deep and diverse
set of funding sources to finance its assets and meet operating requirements
and liquidity programs that enable Credco to

21

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

Funding Strategy

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

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

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

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

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

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

Maintenance of
high and stable debt ratings is critical to ensuring Credco has continuous
access to capital and

22

---



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

Short-term funding programs

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

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

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

23

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

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

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

Long-term debt programs

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

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

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

See further
details on total year-end stated rates on debt and maturities in Note 5 to the
Consolidated Financial Statements.

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

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

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

24

---



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

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

The most
restrictive limitation on dividends imposed by the debt instruments issued by
Credco is the requirement that Credco maintain a minimum consolidated net worth
of $50 million. There are no significant restrictions on the ability of Credco
to obtain funds from its subsidiaries by dividend or loan. Additionally, there
are no limitations on the amount of debt that can be issued by Credco.

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

Liquidity Strategy

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

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

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

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

Cash and Readily-Marketable Securities

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

25

---



Committed Bank Credit Facilities

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

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

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

Credcos
committed bank credit facilities expire as follows:

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

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

|     |  |        |      |                   |  |      | 
|---- |  | ------ | ---- | ----------------- |  | ---- | 
|     |  | Credco |      | American
 Express | 
|     |  |        |      |                   | 
|     |  |        |      |                   | 
|2008 |  |        | 1.50 |                   |  | 1.96 | 
|2007 |  |        | 1.38 |                   |  | 2.24 | 
|2006 |  |        | 1.44 |                   |  | 2.54 | 

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

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

Results of Operations

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

Credcos
consolidated net income rose 3 percent to $745 million for the year ended
December 31, 2008, as compared to the year ended December 31, 2007. The
year-over-year increase was primarily due to a decrease in interest expense,
provisions for losses, net of recoveries and loan service fees and an increase
in interest income earned on loans to affiliates, partially offset by a
decrease in discount revenue earned from purchased cardmember receivables and
loans, and a decrease in interest income from investments.

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

26

---



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

Discount Revenue Earned on Purchased
Cardmember Receivables and Loans

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

Interest Income from Affiliates

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

Interest Income from Investments

Interest
income from investments decreased 11 percent or $31 million to $247 million for
2008, as compared to 2007. The year-over-year decrease is due to an increase in
the average outstanding amount of cash and cash

27

---



equivalents
offset by the decrease of the average interest rate on the total investment
portfolio of approximately 211 basis points for 2008, as compared to 2007. The
increase in cash and cash equivalents reflects the issuance of short- and
long-term debt that was in excess of Credcos business operating needs, and
investment of the excess proceeds in cash equivalents.

Provisions for Losses, Net of Recoveries

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

Interest Expense and Interest Expense to
Affiliates

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

Service Fees to Affiliates

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

Income Taxes

Credcos
effective tax rate for the years ended December 31, 2008, 2007 and 2006, was
8.4 percent, 7.3 percent and 13.2 percent, respectively. The effective tax rate
was higher in 2008 as compared to 2007 primarily due to the attribution and
change in the geographic mix of pretax income among various jurisdictions. The
effective tax rate was lower in 2007 as compared to 2006 primarily as a result
of an increase in the benefits related to its ongoing funding activities
outside the United States.

28

---



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

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

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

Credit Risk Management Process

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

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

Market Risk Management Process

Market risk is
the risk to earnings or value resulting from movements in market prices.
Credcos market risk consists primarily of interest rate risk and foreign
exchange risk. Market risk exposures are monitored and managed by various risk
committees, American Express Treasury Department as well as by Credcos management.
Credco operates under American Express Board approved policies related to
market risk management and the use of derivative financial instruments. With
respect to derivative financial instruments, the value of such instruments is
derived from an underlying variable or multiple variables, including interest
rate, foreign exchange, and equity indices or prices. These instruments enable
end users to increase, reduce, or alter exposure to various market risks and,
for that reason, are an integral component of Credcos market risk and related
asset liability management strategy and processes. See Note 7 to the Consolidated Financial Statements for additional
discussion of Credcos derivative financial instruments.

Interest rate
risk is primarily generated by the funding of cardmember receivables and
fixed-rate cardmember

29

---



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

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

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

Liquidity Risk Management Process

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

Liquidity risk
is managed both at an aggregate American Express level and at the major legal
entities, including Credco, in order to ensure that sufficient funding and
contingent liquidity resources are available in the amount and in the location
needed in a stress event. American Express Funding and Liquidity Committee
manages the forecasts of American Express aggregate and subsidiary cash
positions and financing

30

---



requirements,
the funding plans designed to satisfy those requirements under normal
conditions, establishes guidelines to identify the amount of contingent
liquidity resources required, and monitors positions and determines any actions
to be taken. Liquidity planning also takes into account operating cash
flexibilities.

Operational Risk Management Process

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

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

31

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|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 8.     | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|            | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Financial
 Statements.                                                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | See Index to
 Financial Statements at page F-1 hereof.                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|            | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Supplementary
 Financial Information.                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Selected
 quarterly financial data. See Note 14 to the Consolidated Financial Statements appearing herein.                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|Item 9.     | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
 FINANCIAL DISCLOSURE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            | Not
 applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Item 9A(T). | CONTROLS AND PROCEDURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            | Credcos
 management, with the participation of Credcos Chief Executive Officer and
 Chief Financial Officer, has evaluated the effectiveness of Credcos
 disclosure controls and procedures (as such term is defined in Rules
 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
 (the Exchange Act)) as of the end of the period covered by this report.
 Based on such evaluation, Credcos Chief Executive Officer and Chief
 Financial Officer have concluded that, as of the end of such period, Credcos
 disclosure controls and procedures are effective.
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            | There have
 not been any changes in Credcos internal control over financial reporting
 (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
 Act) during Credcos fourth fiscal quarter that have materially affected, or
 are reasonably likely to materially affect, Credcos internal control over
 financial reporting.                                                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            | Managements Report on Internal Control over Financial Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            | The
 management of Credco is responsible for establishing and maintaining adequate
 internal control over financial reporting. Credcos internal control over
 financial reporting is a process designed to provide reasonable assurance
 regarding the reliability of financial reporting and the preparation of
 financial statements for external purposes in accordance with generally
 accepted accounting principles in the United States of America, and includes
 those policies and procedures that:                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Pertain to
 the maintenance of records that, in reasonable detail, accurately and fairly
 reflect the transactions and dispositions of the assets of Credco;                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Provide
 reasonable assurance that transactions are recorded as necessary to permit
 preparation of financial statements in accordance with generally accepted
 accounting principles, and that receipts and expenditures of Credco are being
 made only in accordance with authorizations of management and directors of
 Credco; and
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

32

---



|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|         | detect
 misstatements. Also, projections of any evaluation of effectiveness to future
 periods are subject to the risk that controls may become inadequate because
 of changes in conditions, or that the degree of compliance with the policies
 or procedures may deteriorate.                                                                                                                                                                    
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Credcos
 management assessed the effectiveness of Credcos internal control over
 financial reporting as of December 31, 2008. In making this assessment,
 Credcos management used the criteria set forth by the Committee of
 Sponsoring Organizations of the Treadway Commission (COSO) in Internal Controls
  Integrated
 Framework.                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Based on
 managements assessment and those criteria, management has concluded that, as
 of December 31, 2008, Credcos internal control over financial reporting is
 effective.                                                                                                                                                                                                                                                                    
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | This annual
 report does not include an attestation report of PricewaterhouseCoopers LLP,
 Credcos registered public accounting firm, regarding internal control over
 financial reporting. Managements report was not subject to attestation by
 Credcos registered public accounting firm pursuant to temporary rules of the
 Securities and Exchange Commission that permit Credco to provide only
 managements report in this annual report.
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Pursuant to
 Item 308T(a) of Regulation S-K, this Managements Report on Internal Control
 Over Financial Reporting shall not be deemed to be filed for purposes of
 Section 18 of the Exchange Act or otherwise subject to the liabilities of
 that section.                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 9B. | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Not
 applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|PART III
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Omitted
 pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 11. | EXECUTIVE COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Omitted
 pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
 RELATED STOCKHOLDER MATTERS                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Omitted
 pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
  AND DIRECTOR INDEPENDENCE                                                                                                                                                                                                                                                                                                                                                                         
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Omitted
 pursuant to General Instruction I(2) (c) to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                     
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | The Audit
 Committee of the Board of Directors of American Express Company has appointed
 PricewaterhouseCoopers LLP as the independent registered public accounting
 firm to audit the Consolidated Financial Statements of Credco for the year
 ended December 31, 2008.                                                                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         | Each year the Audit
 Committee reviews the accountants qualifications, performance and
 independence in accordance with regulatory requirements and guidelines. At
 least every ten                                                                                                                                                                                                                                                                

33

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | years, the Audit Committee
 charter requires a detailed review of American Express accounting firm,
 which would include a comparison of resources available in other firms. The
 Committee conducted such a review in 2004, resulting in the appointment of
 PricewaterhouseCoopers LLP as the independent registered public accounting
 firm for Credco for the year beginning January 1, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Audit Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The
 aggregate fees billed or to be billed by PricewaterhouseCoopers LLP for
 professional services rendered for the audit of Credcos Consolidated
 Financial Statements and services that were provided in connection with
 statutory and regulatory filings or engagements and other attest services
 were $300,913 and $263,500 for the years ended December 31, 2008 and 2007,
 respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Audit-Related
 Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Credco was
 not billed by PricewaterhouseCoopers LLP for any fees for audit-related
 services for 2008 or 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Tax Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Credco was
 not billed by PricewaterhouseCoopers LLP for any tax fees for 2008 or 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | All Other
 Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Credco was
 not billed by PricewaterhouseCoopers LLP for any other fees for 2008 or 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Policy on
 Pre-Approval of Services Provided by Independent Registered Public
 Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Pursuant to
 the requirements of the Sarbanes-Oxley Act of 2002, the terms of the
 engagement of Credcos independent registered public accounting firm is
 subject to the specific pre-approval of the Audit Committee of American
 Express. All audit and permitted non-audit services to be performed by
 Credcos independent registered public accounting firm require pre-approval
 by the Audit Committee in accordance with pre-approval procedures established
 by the Audit Committee. All such services provided by Credco's independent registered
 public accounting firm have been pre-approved. The procedures require all proposed
 engagements of Credcos
 independent registered public accounting firm for services to Credco of any
 kind to be directed to the General Auditor of American Express and then submitted
 for approval to the Audit Committee of American Express prior to the beginning
 of any services.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Other
 Transactions with PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | American
 Express has a number of business relationships with individual member firms
 of the worldwide PricewaterhouseCoopers LLP organization. American Express
 subsidiaries provide card and travel services to some of these firms and
 these firms pay fees to American Express subsidiaries. These services are in
 the normal course of business and American Express provides them pursuant to
 arrangements that American Express offers to other similar clients.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

34

---



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

35

---



SIGNATURES

Pursuant to
the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

AMERICAN EXPRESS CREDIT CORPORATION(Registrant)

|      |                 |  |    |                                       | 
|----- | --------------- |  | -- | ------------------------------------- | 
|DATE: | March 30,
 2009 |  | By | /s/Christopher S. Forno               | 
|      |                 |  |    |                                       | 
|      |                 |  |    | Christopher S. Forno                  | 
|      |                 |  |    | President and Chief Executive Officer | 

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

|      |                 |  |    |                                                                        | 
|----- | --------------- |  | -- | ---------------------------------------------------------------------- | 
|DATE: | March 30,
 2009 |  | By | /s/Christopher S. Forno                                                | 
|      |                 |  |    |                                                                        | 
|      |                 |  |    | Christopher S. Forno
 President, Chief Executive Officer
 and Director | 
|      |                 |  |    |                                                                        | 
|DATE: | March 30,
 2009 |  |    | /s/Lawrence
 A. Belmonte                                               | 
|      |                 |  |    |                                                                        | 
|      |                 |  |    | Lawrence A. Belmonte
 Vice President and Chief Accounting Officer      | 
|      |                 |  |    |                                                                        | 
|DATE: | March 30,
 2009 |  |    | /s/David L. Yowan                                                      | 
|      |                 |  |    |                                                                        | 
|      |                 |  |    | David L. Yowan
 Chief Financial Officer and Director                   | 

36

---



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

(Item 15 (a))

|                                                         |  |                
|-------------------------------------------------------- |  | ---------------
|                                                         |  | Page Number    
|                                                         |  |                
|                                                         |  |                
|Financial Statements:                                    |  |                
|                                                         |  |                
|Report of Independent Registered Public
 Accounting Firm |  | F  2          
|                                                         |  |                
|Consolidated Statements of Income                        |  | F  3          
|                                                         |  |                
|Consolidated Balance Sheets                              |  | F  4          
|                                                         |  |                
|Consolidated Statements of Cash Flows                    |  | F  5          
|                                                         |  |                
|Consolidated Statements of Shareholders
 Equity         |  | F  6          
|                                                         |  |                
|Notes to Consolidated Financial
Statements               |  | F  7 to F  26

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

/s/ PricewaterhouseCoopers
LLP 
March 30, 2009

F-2

---



AMERICAN EXPRESS CREDIT
CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

|                                                                         |  |      |       |      |   |       |  |   |       | 
|------------------------------------------------------------------------ |  | ---- | ----- | ---- | - | ----- |  | - | ----- | 
|Years
 Ended December 31, (Millions)                                     |  | 2008 |       | 2007 |   | 2006  | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|                                                                        
|Revenues                                                                 |  |      |       |      |   |       |  |   |       | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|Discount
 revenue earned from purchased cardmember receivables and loans |  | $    | 2,191 |      | $ | 2,873 |  | $ | 2,223 | 
|Interest
 income from affiliates                                         |  |      | 744   |      |   | 650   |  |   | 523   | 
|Interest
 income from investments                                        |  |      | 247   |      |   | 278   |  |   | 218   | 
|Finance
 revenue                                                         |  |      | 48    |      |   | 53    |  |   | 47    | 
|Other                                                                    |  |      | 20    |      |   | 8     |  |   | 6     | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|Total revenues                                                           |  |      | 3,250 |      |   | 3,862 |  |   | 3,017 | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|Expenses                                                                 |  |      |       |      |   |       |  |   |       | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|Provisions
 for losses, net of recoveries                                |  |      | 641   |      |   | 842   |  |   | 589   | 
|Interest
 expense                                                        |  |      | 1,363 |      |   | 1,612 |  |   | 1,281 | 
|Interest
 expense to affiliates                                          |  |      | 255   |      |   | 434   |  |   | 333   | 
|Service fees
 to affiliates                                              |  |      | 173   |      |   | 192   |  |   | 93    | 
|Other                                                                    |  |      | 5     |      |   | 5     |  |   | 4     | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|Total expenses                                                           |  |      | 2,437 |      |   | 3,085 |  |   | 2,300 | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|Pretax
 income                                                           |  |      | 813   |      |   | 777   |  |   | 717   | 
|Income tax
 provision                                                    |  |      | 68    |      |   | 57    |  |   | 95    | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|                                                                         |  |      |       |      |   |       |  |   |       | 
|Net income                                                               |  | $    | 745   |      | $ | 720   |  | $ | 622   | 
|                                                                         |  |      |       |      |   |       |  |   |       | 

See Notes to Consolidated Financial
Statements.

F-3

---



AMERICAN EXPRESS CREDIT
CORPORATION
CONSOLIDATED BALANCE SHEETS

|                                                                                                       |  |      |        |      |   |        |  
|------------------------------------------------------------------------------------------------------ |  | ---- | ------ | ---- | - | ------ | -
|December
 31, (Millions, except share data)                                                            |  | 2008 |        | 2007 |  
|                                                                                                       |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Assets                                                                                                 |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Cash and
 cash equivalents                                                                             |  | $    | 8,855  |      | $ | 2,925  |  
|Cardmember
 receivables, less reserves: 2008, $204; 2007, $831                                         |  |      | 10,655 |      |   | 25,504 |  
|Cardmember
 loans, less reserves: 2008, $14; 2007, $10                                                 |  |      | 484    |      |   | 393    |  
|Loans to
 affiliates                                                                                   |  |      | 11,726 |      |   | 11,201 |  
|Investment
 securities                                                                                 |  |      | 3,084  |      |   | 2,074  |  
|Investment
 securities restricted                                                                      |  |      |       |      |   | 970    |  
|Deferred
 charges and other assets                                                                     |  |      | 801    |      |   | 409    |  
|Due from
 affiliates                                                                                   |  |      | 3,660  |      |   | 2,367  |  
|                                                                                                       |  |      |        |      |   |        |  
|Total assets                                                                                           |  | $    | 39,265 |      | $ | 45,843 |  
|                                                                                                       |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Liabilities and Shareholders Equity                                                                   |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Short-term
 debt                                                                                       |  | $    | 7,367  |      | $ | 11,093 |  
|Short-term
 debt to affiliates                                                                         |  |      | 8,317  |      |   | 8,682  |  
|Current
 portion of long-term debt                                                                     |  |      | 5,201  |      |   | 7,411  |  
|Long-term
 debt                                                                                        |  |      | 14,809 |      |   | 14,872 |  
|                                                                                                       |  |      |        |      |   |        |  
|Total debt                                                                                             |  |      | 35,694 |      |   | 42,058 |  
|Accrued
 interest and other liabilities                                                                |  |      | 473    |      |   | 339    |  
|                                                                                                       |  |      |        |      |   |        |  
|Total liabilities                                                                                      |  |      | 36,167 |      |   | 42,397 |  
|                                                                                                       |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Shareholders Equity                                                                                   |  |      |        |      |   |        |  
|                                                                                                       |  |      |        |      |   |        |  
|Common
 stock, $.10 par value, authorized 3 million shares; issued and outstanding
 1.5 million shares |  |      | 1      |      |   | 1      |  
|Capital
 surplus                                                                                       |  |      | 161    |      |   | 161    |  
|Retained
 earnings                                                                                     |  |      | 3,322  |      |   | 3,157  |  
|Accumulated
 other comprehensive income (loss), net of tax:                                            |  |      |        |      |   |        |  
|Net unrealized securities gains, net of
 tax: 2008, $(15); 2007, $(15)                                 |  |      | 28     |      |   | 28     |  
|Net unrealized derivatives losses, net of
 tax: 2008, $19; 2007, $16                                   |  |      | (35    | )    |   | (30    | )
|Foreign currency translation adjustments,
 net of tax: 2008, $13; 2007, $(8)                           |  |      | (379   | )    |   | 129    |  
|                                                                                                       |  |      |        |      |   |        |  
|Total accumulated other comprehensive
 (loss) income                                                   |  |      | (386   | )    |   | 127    |  
|                                                                                                       |  |      |        |      |   |        |  
|Total shareholders equity                                                                             |  |      | 3,098  |      |   | 3,446  |  
|                                                                                                       |  |      |        |      |   |        |  
|Total
 liabilities and shareholders equity                                                            |  | $    | 39,265 |      | $ | 45,843 |  
|                                                                                                       |  |      |        |      |   |        |  

See Notes to Consolidated Financial Statements.

F-4

---



AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                   |  |      |        |      |   |        |   |   |        |  
|---------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|Years
 Ended December 31, (Millions)                                               |  | 2008 |        | 2007 |   | 2006   |  
|                                                                                   |  |      |        |      |   |        |  
|Cash Flows from Operating
 Activities                                              |  |      |        |      |   |        |   |   |        |  
|Net income                                                                         |  | $    | 745    |      | $ | 720    |   | $ | 622    |  
|Adjustments to reconcile
 net income to net cash provided by operating activities: |  |      |        |      |   |        |   |   |        |  
|Provisions for
 losses                                                             |  |      | 785    |      |   | 1,017  |   |   | 747    |  
|Amortization and
 other                                                            |  |      | 2      |      |   | 10     |   |   | 9      |  
|Deferred taxes                                                                     |  |      | 212    |      |   | (46    | ) |   | (6     | )
|Changes in
 operating assets and liabilities:                                      |  |      |        |      |   |        |   |   |        |  
|Due from
 affiliates                                                               |  |      | (258   | )    |   | 2      |   |   | 39     |  
|Other operating
 assets and liabilities                                            |  |      | 569    |      |   | (98    | ) |   | 259    |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Net cash provided by operating activities                                          |  |      | 2,055  |      |   | 1,605  |   |   | 1,670  |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Cash Flows from Investing
 Activities                                              |  |      |        |      |   |        |   |   |        |  
|Net decrease
 (increase) in cardmember receivables and loans                       |  |      | 13,543 |      |   | 379    |   |   | (3,643 | )
|Purchase of
 investments                                                           |  |      | (2,637 | )    |   |       |   |   | (3,012 | )
|Maturity of
 investments                                                           |  |      | 600    |      |   |       |   |   | 3,019  |  
|Sales of
 investments                                                              |  |      | 1,994  |      |   |       |   |   |       |  
|Net increase in
 loans to affiliates                                               |  |      | (2,791 | )    |   | (638   | ) |   | (570   | )
|Net increase in
 due from affiliates                                               |  |      | (1,035 | )    |   | (2,362 | ) |   | (1,067 | )
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Net cash
 provided by (used in) investing activities                               |  |      | 9,674  |      |   | (2,621 | ) |   | (5,273 | )
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Cash Flows from Financing Activities                                               |  |      |        |      |   |        |   |   |        |  
|Net (decrease)
 increase in short-term debt to affiliates                          |  |      | (365   | )    |   | (904   | ) |   | 1,542  |  
|Net (decrease)
 increase in short-term debt                                        |  |      | (3,726 | )    |   | 5,210  |   |   | (2,060 | )
|Issuance of
 long-term debt                                                        |  |      | 6,265  |      |   | 3,536  |   |   | 9,021  |  
|Redemption of
 long-term debt                                                      |  |      | (7,388 | )    |   | (3,888 | ) |   | (4,714 | )
|Dividends paid                                                                     |  |      | (580   | )    |   | (750   | ) |   | (500   | )
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Net cash (used
 in) provided by financing activities                               |  |      | (5,794 | )    |   | 3,204  |   |   | 3,289  |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Effect on
 exchange rate changes on cash and cash equivalents                      |  |      | (5     | )    |   |       |   |   |       |  
|Net increase
 (decrease) in cash and cash equivalents                              |  |      | 5,930  |      |   | 2,188  |   |   | (314   | )
|Cash and cash
 equivalents at beginning of year                                    |  |      | 2,925  |      |   | 737    |   |   | 1,051  |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  
|Cash and cash
 equivalents at end of year                                          |  | $    | 8,855  |      | $ | 2,925  |   | $ | 737    |  
|                                                                                   |  |      |        |      |   |        |   |   |        |  

See Notes to
Consolidated Financial Statements.

F-5

---



AMERICAN EXPRESS CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|-------------------------------------------- |  | ----- | ----- | ------------- | - | ---------------- |  | -------------------------------------------------- | --- | ------------------ | - | ---- | - | - | ----- | -
|Three
 Years Ended December 31, (Millions)   |  | Total |       | Common
 Stock |   | Capital
 Surplus |  | Accumulated
 Other
 Comprehensive
 (Loss) / Income |     | Retained
 Earnings |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |  
|Balances at December 31, 2005                |  | $     | 3,270 |               | $ | 1                |  | $                                                  | 161 |                    | $ | 28   |   | $ | 3,080 |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Comprehensive
 income:                       |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Net income                                   |  |       | 622   |               |   |                  |  |                                                    |     |                    |   |      |   |   | 622   |  
|Change in net
 unrealized securities gains   |  |       | 21    |               |   |                  |  |                                                    |     |                    |   | 21   |   |   |       |  
|Change in net
 unrealized derivatives gains  |  |       | 22    |               |   |                  |  |                                                    |     |                    |   | 22   |   |   |       |  
|Derivatives
 gains reclassified to earnings  |  |       | (69   | )             |   |                  |  |                                                    |     |                    |   | (69  | ) |   |       |  
|Foreign currency
 translation adjustments    |  |       | 55    |               |   |                  |  |                                                    |     |                    |   | 55   |   |   |       |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Total
 comprehensive income                  |  |       | 651   |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Post retirement
 benefit adjustment          |  |       | (2    | )             |   |                  |  |                                                    |     |                    |   | (2   | ) |   |       |  
|Cash dividends
 paid                         |  |       | (500  | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (500  | )
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Balances at December 31, 2006                |  |       | 3,419 |               |   | 1                |  |                                                    | 161 |                    |   | 55   |   |   | 3,202 |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Comprehensive
 income:                       |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Net income                                   |  |       | 720   |               |   |                  |  |                                                    |     |                    |   |      |   |   | 720   |  
|Change in net
 unrealized securities gains   |  |       | 23    |               |   |                  |  |                                                    |     |                    |   | 23   |   |   |       |  
|Change in net
 unrealized derivatives losses |  |       | (26   | )             |   |                  |  |                                                    |     |                    |   | (26  | ) |   |       |  
|Derivatives
 gains reclassified to earnings  |  |       | (14   | )             |   |                  |  |                                                    |     |                    |   | (14  | ) |   |       |  
|Foreign currency
 translation adjustments    |  |       | 87    |               |   |                  |  |                                                    |     |                    |   | 87   |   |   |       |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Total
 comprehensive income                  |  |       | 790   |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Post retirement
 benefit adjustment          |  |       | 2     |               |   |                  |  |                                                    |     |                    |   | 2    |   |   |       |  
|Adoption of FIN
 48                          |  |       | (15   | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (15   | )
|Cash dividends paid                          |  |       | (750  | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (750  | )
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Balances at December 31, 2007                |  |       | 3,446 |               |   | 1                |  |                                                    | 161 |                    |   | 127  |   |   | 3,157 |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Comprehensive income:                        |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Net income                                   |  |       | 745   |               |   |                  |  |                                                    |     |                    |   |      |   |   | 745   |  
|Change in net
 unrealized securities gains   |  |       |      |               |   |                  |  |                                                    |     |                    |   |     |   |   |       |  
|Change in net
 unrealized derivatives losses |  |       | (77   | )             |   |                  |  |                                                    |     |                    |   | (77  | ) |   |       |  
|Derivatives
 losses reclassified to earnings |  |       | 72    |               |   |                  |  |                                                    |     |                    |   | 72   |   |   |       |  
|Foreign currency
 translation adjustments    |  |       | (508  | )             |   |                  |  |                                                    |     |                    |   | (508 | ) |   |       |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Total
 comprehensive income                  |  |       | 232   |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Cash dividends
 paid                         |  |       | (580  | )             |   |                  |  |                                                    |     |                    |   |      |   |   | (580  | )
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  
|Balances at December 31, 2008                |  | $     | 3,098 |               | $ | 1                |  | $                                                  | 161 |                    | $ | (386 | ) | $ | 3,322 |  
|                                             |  |       |       |               |   |                  |  |                                                    |     |                    |   |      |   |   |       |  

See Notes to
Consolidated Financial Statements.

F-6

---



AMERICAN EXPRESS CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Basis of Presentation

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

Credco is primarily engaged
in the business of financing non-interest-bearing cardmember receivables
arising from the use of the American Expressâ Card,
the American Expressâ Gold Card, Platinum Cardâ,
Corporate Card and other American Express
Cards issued in the United States, and in designated currencies outside the
United States. Credco also purchases certain interest-bearing and discounted
revolving loans comprised of American Express credit cards and Sign &
Travelâ, although interest-bearing and
revolving loans are primarily funded by subsidiaries of TRS other than Credco.
American Express charge cards and American Express credit cards are collectively
referred to herein as the Card.

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

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

Principles of Consolidation

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

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

Credco also consolidates any
Variable Interest Entities (VIEs) for which it is considered to be the primary
beneficiary. The determination of whether an entity is a VIE is based on the
amount and characteristics of the entitys equity. An enterprise is required to
consolidate a VIE when it has a variable interest for which it is deemed to be
the primary beneficiary that is, it will absorb a majority of the VIEs
expected losses or receive a majority of the VIEs expected residual returns.
Credcos involvement with VIEs is limited and is comprised of one entity
established to fund loans to affiliates in an international market. Credco has
no significant interest in a

F-7

---



VIE for which it is not
considered the primary beneficiary.

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

Foreign Currency

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

Amounts Based on Estimates and Assumptions

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

Discount Revenue

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

Finance Revenue

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

Interest Income from Investments

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

Income Taxes

The taxable income of Credco is included in the
consolidated U.S. federal income tax return of American Express. Under an
agreement with TRS, taxes are recognized on a separate company basis. American
Express is subject to the income tax laws of the United States, its states and
municipalities and those of the foreign jurisdictions in which American Express
operates. These tax laws are complex, and the manner in which they apply to the
taxpayers facts is sometimes open to interpretation. Given these inherent
complexities, Credco must make judgments in assessing the likelihood that a tax
position will be sustained upon examination by the taxing authorities based on
the technical merits of the tax position. A tax position is recognized only
when,

F-8

---



based on managements judgment regarding the
application of income tax laws, it is more likely than not that the tax
position will be sustained upon examination. The amount of benefit recognized
for financial reporting purposes is based on managements best judgment of the
most likely outcome resulting from examination given the facts, circumstances
and information available at the reporting date. Credco adjusts the level of
unrecognized tax benefits when there is new information available to assess the
likelihood of the outcome. Interest and penalties relating to unrecognized tax
benefits are reported in the income tax provision.

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

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

Cash and Cash Equivalents

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

Cardmember Receivables and Loans

Cardmember receivables
represent amounts due from American Express charge card customers. These
receivables are recorded at the time they are purchased from TRS and
certain of its subsidiaries that issue the card (Card Issuers). Cardmember receivable balances are presented
on the Consolidated Balance Sheets net of reserves for losses and typically
include principal and any related accrued fees. Cardmember receivables also
include participation interests purchased from an affiliate. Participation
interests in cardmember receivables represent undivided interests in the cash
flows of the non-interest-bearing cardmember receivables and are purchased
without recourse by Credco Receivables Corporation (CRC) from American Express
Receivables Financing Corporation V LLC (RFC V).

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

Reserves for Losses  Cardmember Receivables and Loans

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

F-9

---



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

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

Investment Securities

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

Derivative Financial Instruments and Hedging Activities

All derivatives are recognized at fair value as either
assets or liabilities on Credcos Consolidated Balance Sheets. The fair value
of Credcos derivative financial instruments are determined using either market
quotes or valuation models that are based upon the net present value of
estimated future cash flows and incorporate current market data inputs. Credco
reports its derivative assets and liabilities in other assets and other
liabilities, respectively, on a net by counterparty basis where management
believes it has the legal right of offset under enforceable netting arrangements.
The accounting for the change in the fair value of a derivative financial
instrument depends on its intended use and the resulting hedge designation, if
any, as discussed below.

Cash
flow hedges

A cash flow hedge is a derivative designated to hedge
the exposure of variable future cash flows that is attributable to a particular
risk associated with an existing recognized asset or liability or a forecasted
transaction. For derivative financial instruments that qualify as cash flow
hedges, the effective portions of the gain or loss on the derivatives are
recorded in accumulated other comprehensive income (loss) and reclassified into
earnings when the hedged cash flows are recognized into earnings. The amount
that is reclassified into earnings is presented in the Consolidated Statements
of Income with the hedged instrument or transaction impact, primarily, in
interest expense. Any ineffective portion of the gain or loss, as determined
    by the accounting requirements, is reported as a component of other revenues.
    If a hedge is de-designated or terminated prior to maturity, the amount previously
recorded in accumulated other comprehensive income (loss) is recognized into
earnings over the period that the hedged item impacts earnings. If a hedge
relationship is discontinued because it is probable that the forecasted
transaction will not occur according to the original strategy, any related
amounts previously recorded in accumulated other comprehensive income (loss)
are recognized into earnings immediately.

Fair
value hedges

A fair value hedge is a derivative designated to hedge
the exposure of future changes in the fair value of an asset or liability, or
an identified portion thereof that is attributable to a particular risk. For
derivative financial

F-10

---



instruments that qualify as fair value hedges, changes
in the fair value of the derivatives, as well as of the corresponding hedged
assets, liabilities or firm commitments, are recorded in earnings as a
component of other revenues, resulting in the ineffectiveness from the hedge
relationship. If a fair value hedge is de-designated or no longer considered
    to be effective, changes in fair value of the derivative continue to be recorded
through earnings but the hedged asset or liability is then amortized or accreted
as an adjustment to yield over the remaining life of the asset or liability.

Net investment hedges in foreign operations

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

Non-designated derivatives

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

Derivative financial instruments that qualify for
hedge accounting

Derivative financial
instruments that are entered into for hedging purposes are designated as such
when Credco enters into the contract. For all derivative financial instruments
that are designated for hedging activities, Credco formally documents all of
the hedging relationships between the hedge instruments and the hedged
items at the inception of the relationships. Management also formally documents
its risk management objectives and strategies for entering into the hedge
transactions. Credco formally assesses, at inception and on a quarterly basis,
whether derivatives designated as hedges are highly effective in offsetting the
fair value or cash flows of hedged items. These assessments usually are made through the application of the
dollar-offset method. Credco does not apply the short cut method of hedge
accounting to any transactions. In accordance with its risk management
policies, Credco generally structures its hedges with very similar terms to the
hedged items. When applying the accounting requirements, Credco generally
recognizes ineffectiveness through earnings. If it is determined that a
derivative is not highly effective as a hedge, Credco will discontinue the
application of hedge accounting.

Fair Value Measurements

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

Credcos partial adoption of SFAS No. 157 did not
result in significant changes to the valuation techniques it had previously
used to measure the fair value of its financial instruments. Fair value is
defined as the price that would be received to sell an asset or paid to
transfer a liability (an exit price) in an orderly transaction between market
participants at the measurement date, and is based on Credcos principal or
most advantageous market for the specific asset or liability. The adoption did
not have a material impact on Credcos financial position or results of
operations.

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

F-11

---



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Unadjusted Quoted Prices -
 The fair value of an asset or liability is based on unadjusted quoted prices,
 in active markets for identical assets or liabilities. An example would be a
 marketable equity security that is actively traded on the New York Stock
 Exchange. (Level 1) Credco does not have any assets or liabilities classified
 within Level 1 of the fair value hierarchy.                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Pricing Models with Significant Observable Inputs -
 The fair value of an asset or liability is based on information derived from
 either an active market quoted price, which may require further adjustment
 based on the attributes of the financial asset or liability being measured,
 or an inactive market transaction. Circumstances when adjustments to market
 quoted prices may be appropriate include (i) a quoted price for an actively
 traded equity investment that is adjusted for a contractual trading
 restriction, or (ii) the fair value derived from a trade of an identical or similar
 security in an inactive market. (Level 2) Credcos investment securities and
 derivatives are classified within Level 2 of the fair value hierarchy. Refer
 to Notes 3 and 7.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Pricing Models with Significant Unobservable Inputs
 - The fair value of an asset or liability is primarily based on internally
 derived assumptions surrounding the timing and amount of expected cash flows
 for the financial instrument. Therefore, these assumptions are unobservable
 in either an active or inactive market. An example would be the retained
 subordinated interest in a securitization trust. (Level 3) Credco does not
 have any assets or liabilities classified within Level 3 of the fair value
 hierarchy.                                                                                                                                                                                                                                                     

The level in the fair value hierarchy to which an
asset or liability is classified is based upon the lowest level of input that
is significant to the fair value measurement. For example, if an asset or
liability is valued based on observable inputs (e.g., Level 2) as well as
unobservable inputs (e.g., Level 3), and the unobservable inputs significantly
contributed to the determination of fair value, it is classified in Level 3 of
the fair value hierarchy.

Recently Issued Accounting Standards

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

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

F-12

---



| |                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | non-financial liabilities,
 except for items that are recognized or disclosed at fair value in Credcos
 financial statements on a recurring basis (at least annually), until January
 1, 2009.

Note 2 Cardmember Receivables and Loans

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

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

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

|                                              |  |   |       |   |   |      |   |   |      |  
|--------------------------------------------- |  | - | ----- | - | - | ---- | - | - | ---- | -
|Years
 Ended December 31, (Millions)          |  |   | 2008  |   |   | 2007 |   |   | 2006 |  
|                                              |  |   |       |   |   |      |   |   |      |  
|Reserve for
 losses:                          |  |   |       |   |   |      |   |   |      |  
|Balance at
 beginning of year                 |  | $ | 841   |   | $ | 749  |   | $ | 686  |  
|Additions:                                    |  |   |       |   |   |      |   |   |      |  
|Provisions for
 losses (a)                    |  |   | 641   |   |   | 842  |   |   | 589  |  
|Other credits (b)                             |  |   | 46    |   |   | 14   |   |   | 11   |  
|Deductions:                                   |  |   |       |   |   |      |   |   |      |  
|Accounts
 written-off (a) (c)                 |  |   | 1,204 |   |   | 666  |   |   | 532  |  
|Other charges (d)                             |  |   | 106   |   |   | 98   |   |   | 5    |  
|                                              |  |   |       |   |   |      |   |   |      |  
|                                              |  |   |       |   |   |      |   |   |      |  
|Balance at end
 of year                       |  | $ | 218   |   | $ | 841  |   | $ | 749  |  
|                                              |  |   |       |   |   |      |   |   |      |  
|                                              |  |   |       |   |   |      |   |   |      |  
|Reserve for losses as a % of gross cardmember |  |   |       |   |   |      |   |   |      |  
|receivables and loans owned at
 year-end      |  |   | 1.9   | % |   | 3.1  | % |   | 2.7  | %
|                                              |  |   |       |   |   |      |   |   |      |  

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

F-13

---



Note 3 Investment Securities

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

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

|                                                                                                                                                                                                                                                                                                                     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|(a) At December 31, 2008, there
 were no securities loaned out on an overnight basis to financial institutions
 under the securities lending program. At December 31, 2007, there were $970
 million of securities loaned out on an overnight basis to financial
 institutions under the securities lending program.
|                                                                                                                                                                                                                                                                                                                     | 
|(b) Total investment securities
 include $2.7 billion and $2.6 billion of senior debentures issued by
 Government Sponsored Enterprises (Fannie Mae and Freddie Mac) at December 31,
 2008 and December 31, 2007.                                                                                                   

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

Fair Value

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

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

Credco has reaffirmed its understanding of the valuation techniques
used by its pricing services. No adjustments were deemed necessary to the
prices provided by the pricing services as a result of current market
conditions. In

F-14

---



addition,
Credco corroborates the prices provided by its pricing services to test their
reasonableness by comparing their prices to valuations from different pricing
sources as well as comparing prices to the sale prices received from sold
securities.

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

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

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

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

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

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

F-15

---



Note 4 Short-Term
Debt

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

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

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

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

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

F-16

---



Note 5 Long-Term Debt

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

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

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The outstanding balance
 reflects the impact of fair value hedge accounting whereby certain fixed
 rate notes have been swapped to floating rate through the use of interest
 swaps and are marked to market, as is the associated swap that is reported as
 a derivative asset or liability. In 2008 and 2007, the effect of these
 adjustments was $410 million and $30 million, respectively. Refer to Note 7
 for more details on Credcos treatment of fair value hedges.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(b) | For floating rate debt
 issuances, the stated and effective interest rates are based on the floating
 rates in effect at December 31, 2008 and 2007, respectively. These rates are
 not indicative of future interest rates.                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(c) | Effective interest rates are
 only presented when swaps are in place to hedge the underlying debt at the
 respective year-end.                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(d) | As of December 31, 2008 and
 2007, Credcos outstanding debt includes $14 million and $19 million,
 respectively, of long-term note held by an affiliate.                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(e) | Includes current portion of
 long-term debt of $5.2 billion and $7.4 billion at December 31, 2008 and
 2007, respectively.                                                                                                                                                                                                                                                                                                                                                    

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

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

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

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

Note 6 Restrictions
as to Dividends and Limitations on Indebtedness

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

F-17

---



Note 7 Derivatives
and Hedging Activities

Credco uses
derivative financial instruments to manage exposure to various market risks
such as changes in benchmark interest rates and foreign exchange rates. These
instruments enable end users to increase, reduce, or alter exposure to various
market risks and, for that reason, are an integral component of Credcos market
risk and related asset/liability management strategy and processes. Credco does
not engage in any trading activities.

The fair value
of Credcos derivatives is estimated by using pricing models that do not
contain a high level of subjectivity as the valuation techniques used do not
require significant judgment and inputs to those models are readily observable
from actively quoted markets. The valuation models used by Credco are
consistently applied and reflect the contractual terms of the derivatives,
including the period of maturity, and market-based parameters such as interest
rates, foreign exchange rates, equity indices or prices, and volatility.

In certain
instances, credit valuation adjustments are necessary when the market
parameters (for example, a benchmark curve) used to value derivatives is not
indicative of the credit quality of Credco or its counterparties. Credco
considers the counterparty credit risk by applying an observable forecasted
default rate to the current exposure.

Credco manages
derivative counterparty credit risk by considering the current exposure, which
is the replacement cost of contracts on the measurement date, as well as
estimating the maximum potential value of the contracts over the next twelve
months, considering such factors as the volatility of the underlying or
reference index. To mitigate derivative instrument credit risk, counterparties
are required to be pre-approved and rated as investment grade. Additionally,
Credco may, on occasion, enter into master netting agreements.

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

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

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

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

F-18

---



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

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

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

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

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

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

Cash Flow Hedges

A cash flow
hedge is a derivative designated to hedge the exposure of variable future cash
flows attributable to a particular risk of an existing recognized asset or
liability, or a forecasted transaction. Credco hedges existing long-term
variable rate debt, the rollover of short-term borrowings, primarily commercial
paper, and the anticipated forecasted issuance of additional funding through
the use of derivative instruments, primarily interest rate swaps. These derivative
instruments effectively convert floating rate debt to a fixed rate debt for the
duration of the swap.

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

Fair Value Hedges

A fair value
hedge is a derivative designated to hedge the exposure of future changes in the
fair value of an asset or a liability, or an identified portion thereof that is
attributable to a particular risk. Credco is exposed to interest rate risk
associated with its fixed-rate long-term debt. Credco uses interest rate swaps
to convert certain fixed-rate long-term debt to floating rate at the time of
issuance.

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

F-19

---



Net Investment
Hedges

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

Derivatives not
Designated as Hedges

Credco has
derivatives that act as economic hedges and that either do not qualify or are
not designated for hedge accounting treatment. Foreign currency transactions
and non-U.S. dollar cash flow exposures may from time to time be partially or
fully economically hedged through foreign currency contracts, primarily forward
contracts, foreign currency options, and cross-currency swaps. These hedges
generally mature within one year. Foreign currency contracts involve the purchase
and sale of a designated currency at an agreed upon rate for settlement on a
specified date. The changes in the fair value of the derivative instrument
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 its
proprietary card business.

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

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

Note 8 Variable Interest
Entities

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

Note 9 Transactions
with Affiliates

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

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

F-20

---



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

|                                                                      |  |      |        |      |   |        |  |   |       | 
|--------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ |  | - | ----- | 
|December
 31, (Millions)                                              |  | 2008 |        | 2007 |   | 2006   | 
|                                                                      |  |      |        |      |   |        | 
|Cash and cash equivalents maintained with
 affiliates                 |  | $    |       |      | $ | 4      |  | $ | 5     | 
|Maximum month-end level of cash and cash
 equivalents during the year |  |      | 2      |      |   | 9      |  |   | 145   | 
|Loans to affiliates                                                   |  |      | 11,726 |      |   | 11,201 |  |   | 9,691 | 
|Due from affiliates                                                   |  |      | 3,660  |      |   | 2,367  |  |   | 7     | 
|Maximum month-end level of loans to
 affiliates during the year       |  |      | 14,046 |      |   | 11,346 |  |   | 9,691 | 
|Short-term debt to affiliates                                         |  |      | 8,317  |      |   | 8,682  |  |   | 9,586 | 
|Maximum month-end level of borrowings
 during the year                |  |      | 12,583 |      |   | 10,139 |  |   | 9,719 | 
|Interest income from affiliates                                       |  |      | 744    |      |   | 650    |  |   | 523   | 
|Other income from affiliates                                          |  |      | 8      |      |   | 8      |  |   | 6     | 
|Interest expense to affiliates                                        |  |      | 255    |      |   | 434    |  |   | 333   | 
|Service fees to affiliates(a)                                         |  |      | 173    |      |   | 192    |  |   | 93    | 
|                                                                      |  |      |        |      |   |        |  |   |       | 

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

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

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

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

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

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

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

F-21

---



Note 10 Fair Values of Financial
Instruments

SFAS No. 107, Disclosures
About Fair Value of Financial Instruments, requires the disclosure of the
estimated fair value of financial instruments. A financial instrument is
defined as cash, evidence of an ownership in an entity, or a contract between
two entities to deliver cash or another financial instrument or to exchange
other financial instruments. The disclosure requirements of SFAS No. 107
exclude leases, affiliate investments, pension and benefit obligations,
insurance contracts, and all non-financial instruments.

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

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

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

The following methods were
used to determine estimated fair values:

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

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

Investments

Investments are recorded at
fair value on the Consolidated Balance Sheets with unrealized gains and losses
recorded in accumulative other comprehensive (loss) income. The recognized gains
and losses are recognized in the Consolidated Statements of Income upon
disposition of the securities or when management determines that a decline in
value is other-than-temporary. See Note 3 for carrying and fair value
information regarding investments.

Derivative Financial Instruments

Derivative financial
instruments are recorded at fair value on the Consolidated Balance Sheets, with
gains and losses recognized in the Consolidated Statements of Income or
Consolidated Balance Sheets based upon the nature of the derivative. See Note 7
for fair value information regarding derivative financial instruments.

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

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

F-22

---



Long-term Debt

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

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 at December 31:

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

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

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

|                                                                                                                   |  |      |    |      |   |    | 
|------------------------------------------------------------------------------------------------------------------ |  | ---- | -- | ---- | - | -- | 
|(Billions)                                                                                                         |  | 2008 |    | 2007 |  
|                                                                                                                   |  |      |    |      |  
|Balance sheet:                                                                                                     |  |      |    |      |   |    | 
|United States                                                                                                      |  | $    | 8  |      | $ | 24 | 
|International                                                                                                      |  |      | 3  |      |   | 3  | 
|                                                                                                                   |  |      |    |      |   |    | 
|Balance sheet                                                                                                      |  | $    | 11 |      | $ | 27 | 
|                                                                                                                   |  |      |    |      |   |    | 
|                                                                                                                   |  |      |    |      |   |    | 
|The following table
 details Credcos loans to affiliates in the United States and International,
 at December 31:
|                                                                                                                   |  |      |    |      |   |    | 
|(Billions)                                                                                                         |  | 2008 |    | 2007 |  
|                                                                                                                   |  |      |    |      |  
|Balance sheet:                                                                                                     |  |      |    |      |   |    | 
|United States                                                                                                      |  | $    | 2  |      | $ |   | 
|International                                                                                                      |  |      | 10 |      |   | 11 | 
|                                                                                                                   |  |      |    |      |   |    | 
|Balance sheet                                                                                                      |  | $    | 12 |      | $ | 11 | 
|                                                                                                                   |  |      |    |      |   |    | 

Note 12 Income Taxes

The taxable income of
Credco is included in the consolidated U.S. federal income tax return of
American Express. Under an agreement with TRS, taxes are recognized on a
separate company basis. If income tax benefits

F-23

---



for net
operating losses, future tax deductions and foreign tax credits cannot be
recognized on a separate company basis, such benefits are then recognized based
upon a share, derived by formula, of those deductions and credits that are
recognizable on a TRS consolidated reporting basis.

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

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

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

|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- | ---- | - | ----- | - | - | ----- | -
|(Millions)                                                                                                                                     |  | 2008 |       | 2007 |   | 2006  |  
|                                                                                                                                               |  |      |       |      |   |       |  
|Current income tax (benefit) expense:                                                                                                          |  |      |       |      |   |       |   |   |       |  
|U.S. federal                                                                                                                                   |  | $    | (212  | )    | $ | 81    |   | $ | 94    |  
|U.S. state & local                                                                                                                             |  |      | 13    |      |   | 1     |   |   |      |  
|Non-U.S.                                                                                                                                       |  |      | 55    |      |   | 21    |   |   | 7     |  
|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  
|Total current income tax (benefit) expense                                                                                                     |  |      | (144  | )    |   | 103   |   |   | 101   |  
|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  
|Deferred income tax expense (benefit):                                                                                                         |  |      |       |      |   |       |   |   |       |  
|U.S. federal                                                                                                                                   |  |      | 217   |      |   | (46   | ) |   | (6    | )
|Non-U.S.                                                                                                                                       |  |      | (5    | )    |   |      |   |   |      |  
|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  
|Total deferred income tax expense
(benefit)                                                                                                    |  |      | 212   |      |   | (46   | ) |   | (6    | )
|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  
|Total income tax expense                                                                                                                       |  | $    | 68    |      | $ | 57    |   | $ | 95    |  
|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  
|                                                                                                                                               |  |      |       |      |   |       |  
|A reconciliation of the
 U.S. federal statutory rate of 35 percent to Credcos actual income tax rate
 for 2008, 2007 and 2006 was as follows:
|                                                                                                                                               |  |      |       |      |   |       |  
|                                                                                                                                               |  | 2008 |       | 2007 |   | 2006  |  
|                                                                                                                                               |  |      |       |      |   |       |  
|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                                                                                                                   |  |      | 1.0   |      |   |      |   |   |      |  
|Non-U.S. subsidiaries earnings                                                                                                                 |  |      | (27.6 | )    |   | (27.7 | ) |   | (21.8 | )
|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  
|Actual tax rates                                                                                                                               |  |      | 8.4   | %    |   | 7.3   | % |   | 13.2  | %
|                                                                                                                                               |  |      |       |      |   |       |   |   |       |  

The following table presents
changes in the unrecognized tax benefits:

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

F-24

---



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

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

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

Credco records a deferred
income tax (benefit) provision when there are differences between assets and
liabilities measured for financial reporting and for income tax return
purposes. The significant components of deferred tax assets and liabilities at
December 31, are reflected in the following table:

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

Current federal taxes due
to/from affiliates included current federal taxes receivable from TRS of $172
million at December 31, 2008, and current federal taxes receivable of $6
million at December 31, 2007.

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

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

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

F-25

---



Note 13 Geographic
Regions

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

|              |  |      |       |      |   |       |  |   |       | 
|------------- |  | ---- | ----- | ---- | - | ----- |  | - | ----- | 
|(Millions)    |  | 2008 |       | 2007 |   | 2006  | 
|              |  |      |       |      |   |       | 
|Revenues      |  |      |       |      |   |       |  |   |       | 
|United States |  | $    | 2,136 |      | $ | 2,749 |  | $ | 2,140 | 
|International |  |      | 1,114 |      |   | 1,113 |  |   | 877   | 
|              |  |      |       |      |   |       |  |   |       | 
|Consolidated  |  | $    | 3,250 |      | $ | 3,862 |  | $ | 3,017 | 
|              |  |      |       |      |   |       |  |   |       | 
|Pretax income |  |      |       |      |   |       |  |   |       | 
|United States |  | $    | 560   |      | $ | 610   |  | $ | 607   | 
|International |  |      | 253   |      |   | 167   |  |   | 110   | 
|              |  |      |       |      |   |       |  |   |       | 
|Consolidated  |  | $    | 813   |      | $ | 777   |  | $ | 717   | 
|              |  |      |       |      |   |       |  |   |       | 

Note 14 Quarterly
Financial Data (Unaudited)

|                            |  |       |     |      |   |      |  |      |     |       |   |      |  |      |       |      |   |     |  |   |     |  |   |     | 
|--------------------------- |  | ----- | --- | ---- | - | ---- |  | ---- | --- | ----- | - | ---- |  | ---- | ----- | ---- | - | --- |  | - | --- |  | - | --- | 
|                            |  | 2008  |     | 2007 |  
|                            |  |       |     |      |  
|Quarters
 Ended, (Millions) |  | 12/31 |     | 9/30 |   | 6/30 |  | 3/31 |     | 12/31 |   | 9/30 |  | 6/30 |       | 3/31 |  
|                            |  |       |     |      |   |      |  |      |     |       |   |      |  |      |       |      |  
|Revenues                    |  | $     | 606 |      | $ | 849  |  | $    | 865 |       | $ | 930  |  | $    | 1,054 |      | $ | 992 |  | $ | 923 |  | $ | 893 | 
|Pretax
 income              |  |       | 148 |      |   | 201  |  |      | 294 |       |   | 170  |  |      | 144   |      |   | 211 |  |   | 227 |  |   | 195 | 
|Net income                  |  |       | 149 |      |   | 189  |  |      | 253 |       |   | 154  |  |      | 156   |      |   | 191 |  |   | 201 |  |   | 172 | 
|                            |  |       |     |      |   |      |  |      |     |       |   |      |  |      |       |      |   |     |  |   |     |  |   |     | 

F-26

---



EXHIBIT INDEX

Pursuant to Item 601 of Regulation S-K

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

E-1

---



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

E-2

---



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

E-3

---



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

E-4

---



|      |  |                                                                                                                                                                                       |  |                                                                                                                                                                 
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 Christopher S. Forno,
 Chief Executive Officer, pursuant to Rule
 13a-14(a) promulgated under the Securities
 Exchange Act of 1934, as amended                      |  | Electronically
 filed herewith.                                                                                                                                 
|      |  |                                                                                                                                                                                       |  |                                                                                                                                                                 
|31.2  |  | Certification
 of David L. Yowan, Chief
 Financial Officer, pursuant to Rule 13a-
 14(a) promulgated under the Securities
 Exchange Act of 1934, as amended                           |  | Electronically
 filed herewith.                                                                                                                                 
|      |  |                                                                                                                                                                                       |  |                                                                                                                                                                 
|32.1  |  | Certification
 of Christopher S. Forno,
 Chief Executive Officer, pursuant to 18
 U.S.C. Section 1350, as adopted pursuant
 to Section 906 of the Sarbanes-Oxley Act
 of 2002         |  | Electronically
 filed herewith.                                                                                                                                 
|      |  |                                                                                                                                                                                       |  |                                                                                                                                                                 
|32.2  |  | Certification
 of David L. Yowan, Chief
 Financial Officer, pursuant to 18 U.S.C.
 Section 1350, as adopted pursuant to
 Section 906 of the Sarbanes-Oxley Act of
 2002               |  | Electronically
 filed herewith.                                                                                                                                 

E-5

---