UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


          |X| QUARTERLY REPORT PURSUANT TO SECTION 30 OF THE INVESTMENT
     COMPANY ACT OF 1940 AND SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                  For the Quarterly Period Ended June 30, 2004

                                       OR

            |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
               For the transition period from ________to ________

                           Commission File No. 2-23772

                      American Express Certificate Company
             (Exact name of registrant as specified in its charter)

                  Delaware                                        41-6009975
(State or other jurisdiction of incorporation                 (I.R.S. Employer
              or organization)                               Identification No.)

          52 AXP Financial Center
           Minneapolis, Minnesota                                55474
  (Address of principal executive offices)                     (Zip Code)

    Registrant's telephone number, including area code:      (612) 671-3131
                                                       -------------------------

                                      None
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                Class                           Outstanding at July 31, 2004
----------------------------------------       -------------------------------
Common Shares (par value $10 per share)                 150,000 shares

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
<PAGE>

                      AMERICAN EXPRESS CERTIFICATE COMPANY

                                    FORM 10-Q

                                      INDEX

                                                                        Page No.
                                                                        --------
Part I.   Financial Information:

          Item 1.   Financial Statements

                    Balance Sheets - June 30, 2004 and December 31, 2003      1

                    Statements of Income - Three months ended June
                    30, 2004 and 2003                                         2

                    Statements of Income - Six months ended June 30,
                    2004 and 2003                                             3

                    Statements of Cash Flows - Six months ended June
                    30, 2004 and 2003                                         4

                    Statements of Comprehensive (Loss) Income -
                    Three months ended June 30, 2004 and 2003                 5

                    Statements of Comprehensive (Loss) Income -
                    Six months ended June 30, 2004 and 2003                   6

                    Notes to Financial Statements                           7-8

          Item 2.   Management's Discussion and Analysis of
                    Financial Condition and Results of Operations          9-12

          Item 4.   Controls and Procedures                               12-13

Part II.  Other Information

          Item 1.   Legal Proceedings                                        13

          Item 6.   Exhibits and Reports on Form 8-K                         13

          Signatures                                                         14

          Exhibit Index                                                     E-1
<PAGE>

PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                  AMERICAN EXPRESS CERTIFICATE COMPANY
                                             BALANCE SHEETS
                                               (thousands)


                                                                                    June 30, 2004        December 31, 2003
                                                                                ---------------------   -------------------
                                                                                    (Unaudited)
<S>                                                                                 <C>                     <C>
Assets
Qualified Assets
    Cash and cash equivalents                                                       $   101,683             $    25,099
    Investments in unaffiliated issuers                                               5,102,301               4,994,641
    Equity index options, purchased                                                     112,044                 153,162
    Receivables                                                                          43,391                  43,953
                                                                                ---------------------   -------------------
Total qualified assets                                                                5,359,419               5,216,855
                                                                                ---------------------   -------------------
Other Assets
    Due from AEFC for federal income taxes                                                1,852                  22,963
    Deferred taxes, net                                                                  36,528                   9,321
    Deferred distribution fees and other                                                  5,928                   6,453
                                                                                ---------------------   -------------------
Total other assets                                                                       44,308                  38,737
                                                                                ---------------------   -------------------

Total assets                                                                        $ 5,403,727             $ 5,255,592
                                                                                =====================   ===================

Liabilities and Shareholder's Equity
Liabilities
    Certificate reserves                                                            $ 5,009,878             $ 4,787,817
    Equity index options, written                                                        66,891                 110,642
    Accounts payable and accrued liabilities                                             55,770                  33,920
                                                                                ---------------------   -------------------
Total liabilities                                                                     5,132,539               4,932,379
                                                                                ---------------------   -------------------

Shareholder's equity
    Common stock                                                                          1,500                   1,500
    Additional paid-in-capital                                                          303,844                 323,844
    Accumulated deficit                                                                 (21,347)                (46,357)
    Accumulated other comprehensive (loss) income, net of tax                           (12,809)                 44,226
                                                                                ---------------------   -------------------
Total shareholder's equity                                                              271,188                 323,213
                                                                                ---------------------   -------------------

Total liabilities and shareholder's equity                                          $ 5,403,727             $ 5,255,592
                                                                                =====================   ===================

                                                  See Notes to Financial Statements.
</TABLE>

                                                                  -1-
<PAGE>

<TABLE>
<CAPTION>
                      AMERICAN EXPRESS CERTIFICATE COMPANY
                              STATEMENTS OF INCOME
                                   (thousands)
                                   (Unaudited)

                                                                                   Three Months Ended
                                                                                        June 30,
                                                                         ----------------------------------------
                                                                                2004                 2003
                                                                          -----------------    ------------------
<S>                                                                          <C>                 <C>
Investment income                                                            $  63,302           $   71,878
Investment expenses                                                            (12,275)             (10,911)
                                                                          -----------------    ------------------
Net investment income before provision for
  certificate reserves and income tax provision                                 51,027               60,967

Net provision for certificate reserves                                         (32,302)             (43,016)
                                                                          -----------------    ------------------
Net investment income before income tax provision                               18,725               17,951
Income tax provision                                                            (6,480)              (5,953)
                                                                          -----------------    ------------------
Net investment income                                                           12,245               11,998
                                                                          -----------------    ------------------

Net realized gain on investments before income tax
  provision                                                                      1,238                2,379
Income tax provision                                                              (433)                (833)
                                                                          -----------------    ------------------
Net realized gain on investments                                                   805                1,546

                                                                          -----------------    ------------------
Net income                                                                   $  13,050           $   13,544
                                                                          =================    ==================

                                            See Notes to Financial Statements.
</TABLE>

                                                              -2-
<PAGE>

<TABLE>
<CAPTION>
                      AMERICAN EXPRESS CERTIFICATE COMPANY
                              STATEMENTS OF INCOME
                                   (thousands)
                                   (Unaudited)

                                                                                    Six Months Ended
                                                                                        June 30,
                                                                         ----------------------------------------
                                                                                2004                 2003
                                                                          -----------------    ------------------
<S>                                                                           <C>                 <C>
Investment income                                                             $122,343            $ 131,181
Investment expenses                                                            (23,902)             (21,451)
                                                                          -----------------    ------------------
Net investment income before provision for
  certificate reserves and income tax provision                                 98,441              109,730

Net provision for certificate reserves                                         (61,237)             (68,344)
                                                                          -----------------    ------------------
Net investment income before income tax provision                               37,204               41,386
Income tax provision                                                           (12,840)             (13,761)
                                                                          -----------------    ------------------
Net investment income                                                           24,364               27,625
                                                                          -----------------    ------------------

Net realized gain on investments before income tax
  provision                                                                        994                3,925
Income tax provision                                                              (348)              (1,374)
                                                                          -----------------    ------------------
Net realized gain on investments                                                   646                2,551
                                                                          -----------------    ------------------
Net income                                                                    $ 25,010            $  30,176
                                                                          =================    ==================

                                            See Notes to Financial Statements.
</TABLE>

                                                              -3-
<PAGE>

<TABLE>
<CAPTION>
                      AMERICAN EXPRESS CERTIFICATE COMPANY
                            STATEMENTS OF CASH FLOWS
                                   (thousands)
                                   (Unaudited)
                                                                                       Six Months Ended
                                                                                           June 30,
                                                                             ------------------------------------
                                                                                   2004                 2003
                                                                             ----------------    ----------------
<S>                                                                          <C>                 <C>
Cash Flows from Operating Activities
Net income                                                                   $     25,010        $     30,176
Adjustments to reconcile net income
    to net cash provided by operating activities:
       Interest added to certificate loans                                           (273)               (324)
       Amortization of premiums, accretion of discounts, net                       10,421               4,753
       Deferred taxes, net                                                          3,504             (22,186)
       Net realized gain on investments before income tax provision                  (994)             (3,925)
       Changes in other operating assets and liabilities:
           Deferred distribution fees, net                                            525                 645
           Equity index options purchased and written, net                         (2,633)            (18,830)
           Dividends and interest receivable                                       (1,309)               (890)
           Other assets and liabilities, net                                       27,539              14,516
                                                                             ----------------    ----------------
Net cash provided by operating activities                                          61,790               3,935
                                                                             ----------------    ----------------

Cash Flows from Investing Activities
Available-for-Sale investments:
         Sales                                                                     35,586           1,100,696
         Maturities and redemptions                                               467,987             684,785
         Purchases                                                               (717,387)         (1,991,221)
Other investments:
         Sales                                                                      8,548               7,783
         Maturities and redemptions                                                67,746              54,073
         Purchases                                                                (72,572)            (67,488)
Certificate loans:
         Payments                                                                   1,034               1,649
         Fundings                                                                    (816)               (712)
Changes in amounts due to and from brokers, net                                    21,039            (236,027)
                                                                             ----------------    ----------------
Net cash used in investing activities                                            (188,835)           (446,462)
                                                                             ----------------    ----------------

Cash Flows from Financing Activities
         Payments from certificate owners                                       1,314,099           1,124,124
         Net provision for certificate reserves                                    61,237              68,344
         Certificate maturities and cash surrenders                            (1,151,707)         (1,026,062)
         Proceeds from reverse repurchase agreements                                    -             137,300
         Payments on reverse repurchase agreements                                      -             (84,942)
         Return of capital to AEFC                                                (20,000)                  -
                                                                             ----------------    ----------------
Net cash provided by financing activities                                         203,629             218,764
                                                                             ----------------    ----------------

Net increase (decrease) in cash and cash equivalents                               76,584            (223,763)

Cash and cash equivalents beginning of period                                      25,099             224,363
                                                                             ----------------    ----------------

Cash and cash equivalents end of period                                      $    101,683        $        600
                                                                             ================    ================


                                            See Notes to Financial Statements.
</TABLE>

                                                              -4-
<PAGE>

<TABLE>
<CAPTION>
                      AMERICAN EXPRESS CERTIFICATE COMPANY
                    STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
                                   (thousands)
                                   (Unaudited)

                                                                                         Three Months Ended
                                                                                              June 30,
                                                                                --------------------------------------
                                                                                      2004                 2003
                                                                                ------------------   -----------------
<S>                                                                              <C>                  <C>
Net income                                                                       $    13,050          $    13,544
                                                                                ------------------   -----------------
Other comprehensive (loss) income
    Unrealized (losses) gains on Available-for-Sale securities:
        Unrealized holding (losses) gains arising during period                     (134,723)              25,975
        Income tax benefit (expense)                                                  47,153               (9,091)
                                                                                ------------------   -----------------
            Net unrealized holding (losses) gains arising during period              (87,570)              16,884
                                                                                ------------------   -----------------

       Reclassification adjustment for gains included in net income                   (1,214)              (3,694)
       Income tax expense                                                                425                1,293
                                                                                ------------------   -----------------
            Net reclassification adjustment for gains included in net income            (789)              (2,401)
                                                                                ------------------   -----------------
    Net unrealized (losses) gains on Available-for-Sale securities                   (88,359)              14,483
                                                                                ------------------   -----------------

    Unrealized gains (losses) on interest rate swaps:
        Unrealized holding gains (losses) arising during the period                      772               (1,946)
        Income tax (expense) benefit                                                    (270)                 680
                                                                                ------------------   -----------------
            Net unrealized holding gains (losses) arising during period                  502               (1,266)
                                                                                ------------------   -----------------

       Reclassification adjustment for losses included in net income                   1,577                1,271
       Income tax benefit                                                               (552)                (444)
                                                                                ------------------   -----------------
            Net reclassification adjustment for losses included in net income          1,025                  827
                                                                                ------------------   -----------------
    Net unrealized gains (losses) on interest rate swaps                               1,527                 (439)
                                                                                ------------------   -----------------

Net other comprehensive (loss) income                                                (86,832)              14,044
                                                                                ------------------   -----------------

Total comprehensive (loss) income                                                $   (73,782)         $    27,588
                                                                                ==================   =================


                                            See Notes to Financial Statements.
</TABLE>

                                                              -5-
<PAGE>


<TABLE>
<CAPTION>
                      AMERICAN EXPRESS CERTIFICATE COMPANY
                    STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
                                   (thousands)
                                   (Unaudited)

                                                                                          Six Months Ended
                                                                                              June 30,
                                                                                --------------------------------------
                                                                                      2004                 2003
                                                                                ------------------   -----------------
<S>                                                                              <C>                  <C>
Net income                                                                       $    25,010          $    30,176
                                                                                ------------------   -----------------
Other comprehensive (loss) income
    Unrealized (losses) gains on Available-for-Sale securities:
        Unrealized holding (losses) gains arising during period                      (90,076)               7,903
        Income tax benefit (expense)                                                  31,528               (2,766)
                                                                                ------------------   -----------------
            Net unrealized holding (losses) gains arising during period              (58,548)               5,137
                                                                                ------------------   -----------------

       Reclassification adjustment for gains included in net income                   (1,416)              (6,231)
       Income tax expense                                                                495                2,181
                                                                                ------------------   -----------------
            Net reclassification adjustment for gains included in net income            (921)              (4,050)
                                                                                ------------------   -----------------
    Net unrealized (losses) gains on Available-for-Sale securities                   (59,469)               1,087
                                                                                ------------------   -----------------

    Unrealized gains (losses) on interest rate swaps:
        Unrealized holding gains (losses) arising during the period                      528               (4,035)
        Income tax (expense) benefit                                                    (185)               1,412
                                                                                ------------------   -----------------
            Net unrealized holding gains (losses) arising during period                  343               (2,623)
                                                                                ------------------   -----------------

       Reclassification adjustment for losses included in net income                   3,217                2,290
       Income tax benefit                                                             (1,126)                (801)
                                                                                ------------------   -----------------
            Net reclassification adjustment for losses included in net income          2,091                1,489
                                                                                ------------------   -----------------
    Net unrealized gains (losses) on interest rate swaps                               2,434               (1,134)
                                                                                ------------------   -----------------

Net other comprehensive loss                                                         (57,035)                 (47)
                                                                                ------------------   -----------------

Total comprehensive (loss) income                                                $   (32,025)         $    30,129
                                                                                ==================   =================

                                            See Notes to Financial Statements.
</TABLE>

                                                              -6-
<PAGE>

                      AMERICAN EXPRESS CERTIFICATE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation

     The accompanying  Financial  Statements  should be read in conjunction with
     the  financial  statements  in the Annual  Report on Form 10-K of  American
     Express  Certificate  Company  (AECC) for the year ended December 31, 2003.
     Certain reclassifications of prior period amounts have been made to conform
     to the current presentation.

     The interim financial  information in this report has not been audited.  In
     the  opinion  of  management,   all   adjustments   necessary  for  a  fair
     presentation  of the financial  position and results of operations  for the
     interim  periods  have been made.  All  adjustments  made were of a normal,
     recurring  nature.  Results of operations  reported for interim periods are
     not necessarily indicative of results for the entire year.

     Recently Issued Accounting Standards

     In November 2003, the Financial  Accounting Standards Board (FASB) ratified
     a consensus  on the  disclosure  provisions  of Emerging  Issues Task Force
     (EITF) Issue 03-1, "The Meaning of Other-Than-Temporary  Impairment and Its
     Application  to Certain  Investments."  AECC complied  with the  disclosure
     provisions of this rule in Note 3 to the Financial  Statements  included in
     its Annual  Report on Form 10-K for the year ended  December 31,  2003.  In
     March 2004,  the FASB reached a consensus  regarding the  application  of a
     three-step  impairment model to determine  whether cost method  investments
     are  other-than-temporarily  impaired.  The  provisions  of this  rule  are
     required to be applied  prospectively to all current and future investments
     accounted  for in  accordance  with SFAS No. 115,  "Accounting  for Certain
     Investments  in  Debt  and  Equity   Securities,"  and  other  cost  method
     investments for reporting periods  beginning after June 15, 2004.  Assuming
     no market changes, AECC does not expect EITF 03-1 to have a material impact
     on results of operations at the time of adoption.

2.   Investments in Unaffiliated Issuers

     Investments in unaffiliated  issuers at June 30, 2004 and December 31, 2003
     were:

<TABLE>
<CAPTION>
                                                                                          June 30,              December 31,
                                                                                            2004                    2003
                                                                                  ----------------------    ----------------------
<S>                                                                                  <C>                       <C>
     (Thousands)
     Available-for-Sale securities, at fair value
          (cost: 2004, $4,640,397; 2003, $4,435,647)                                 $    4,622,984            $    4,509,726
     First mortgage loans on real estate and other loans, at cost
          (fair value: 2004, $484,615; 2003, $493,798)                                      465,225                   469,309
     Certificate loans - secured by certificate reserves, at cost,
          which approximates fair value                                                      14,092                    15,606
                                                                                  ----------------------    ----------------------
       Total                                                                         $    5,102,301            $    4,994,641
                                                                                  ======================    ======================
</TABLE>

                                       -7-
<PAGE>

                      AMERICAN EXPRESS CERTIFICATE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


     Gross  realized  gains  and  losses  on sales  and  losses  recognized  for
     other-than-temporary    impairments    of    securities    classified    as
     Available-for-Sale,  using  the  specific  identification  method,  were as
     follows for the three and six months ended June 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                            Three Months Ended                      Six Months Ended
                                                                 June 30,                               June 30,
                                                     ---------------------------------      ---------------------------------

                                                          2004             2003                  2004              2003
                                                     ---------------- ----------------      ----------------  ---------------
<S>                                                    <C>               <C>                  <C>                <C>
     (Thousands)
     Gross realized gains on sales                     $    1,382        $    5,205           $     2,501        $  41,628
     Gross realized (losses) on sales                  $     (168)       $   (1,511)          $      (885)       $  (2,547)
     Realized (losses) recognized for other-
        than-temporary impairments                     $        -        $        -           $      (200)       $ (32,850)
</TABLE>

3.   Comprehensive (Loss) Income

     Comprehensive   (loss)  income  is  defined  as  the  aggregate  change  in
     shareholder's equity,  excluding changes in ownership interests.  It is the
     sum of net  income  and  changes  in net  unrealized  gains  or  losses  on
     Available-for-Sale  securities, net of related tax and net unrealized gains
     or  losses  on   derivatives,   net  of  related  tax.  The  components  of
     comprehensive  income for the three and six months  ended June 30, 2004 and
     2003 are reflected in the accompanying  Statements of Comprehensive  (Loss)
     Income.

4.   Taxes and Certificate Maturities and Surrenders through Loan Reductions

     Net cash  received  for income  taxes  during the six months ended June 30,
     2004 was $11.4  million.  Net cash paid for  income  taxes  during  the six
     months  ended June 30, 2003 was $40  million.  Certificate  maturities  and
     surrenders  through  loan  reductions  during the six months ended June 30,
     2004 and 2003 were $1.6 million and $1.1 million, respectively.

5.   Commitments and Contingencies

     Commitments  to fund first  mortgage  loans on real estate at June 30, 2004
     and  December 31, 2003 were $8.0  million and $9.8  million,  respectively.
     AECC  holds  the  mortgage  document,  which  gives  it the  right  to take
     possession  of the property if the borrower  fails to perform  according to
     the terms of the agreements.  AECC employs policies and procedures designed
     to ensure  the  creditworthiness  of the  borrowers  and that funds will be
     available on the funding date.  AECC's  investments in first mortgage loans
     on real estate are  restricted to 80 percent or less of the market value of
     the real estate at the time of the loan funding.

     AECC believes that it is not a party to, nor are any of its  properties the
     subject of, any pending legal, arbitration,  or regulatory proceedings that
     would have a material adverse effect on its financial condition, results of
     operations  or liquidity.  However,  it is possible that the outcome of any
     such  proceedings  could have a material impact on results of operations in
     any particular reporting period as the proceedings are resolved.

                                      -8-
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

American  Express  Certificate  Company  (AECC) is a wholly owned  subsidiary of
American  Express  Financial   Corporation  (AEFC),  which  is  a  wholly  owned
subsidiary  of American  Express  Company.  AECC is  registered as an investment
company under the Investment  Company Act of 1940 ("the 1940 Act") and is in the
business of issuing face-amount investment certificates.  Face-amount investment
certificates issued by AECC entitle the certificate owner to receive at maturity
a stated  amount of money and interest or credits  declared from time to time by
AECC, at its discretion.  The certificates issued by AECC are not insured by any
government  agency.  AECC's  certificates are sold primarily by American Express
Financial  Advisors Inc.  (AEFAI),  and American Express Bank Ltd. (AEBL),  both
affiliates of AECC. AEFAI is registered as a broker-dealer in all 50 states, the
District of Columbia and Puerto Rico. AEFC acts as investment advisor for AECC.

AECC follows United States  generally  accepted  accounting  principles  (GAAP).
Certain  reclassifications  of prior period amounts have been made to conform to
the current presentation.

Certain  of the  statements  below are  forward  looking  statements  within the
meaning  of the  Private  Securities  Litigation  Reform  Act of  1995.  See the
"Forward-Looking Statements" section below.

Results of Operations for the Three Months Ended June 30, 2004 and 2003

AECC's net income  decreased $0.5 million or 4 percent  reflecting a decrease in
investment  income,  primarily due to lower average investment yields, and lower
net realized  gains,  partially  offset by a decrease in the net  provision  for
certificate reserves.

Net provision for  certificate  reserves  decreased  $10.7 million or 25 percent
this  period  versus the same period  last year  reflecting  the effect on stock
market  certificates  of lower  appreciation  in the S&P 500 and lower  interest
crediting  rates on the interest rate  sensitive  portion of AECC's  certificate
reserves, partially offset by higher average certificate reserves.

For the three months ended June 30, 2004,  $1.4 million of gross  realized gains
from sales of securities classified as Available-for-Sale  were partially offset
by $0.2 million of gross realized losses from sales of securities  classified as
Available-for-Sale.  For the three months  ended June 30, 2003,  $5.2 million of
gross realized gains from sales of securities  classified as  Available-for-Sale
were  partially  offset by $1.5  million  of gross  realized  losses on sales of
securities  classified as  Available-for-Sale  and $1.3 million related to first
mortgage loan reserves recorded during the three months ended June 30, 2003.

Results of Operations for the Six Months Ended June 30, 2004 and 2003

AECC's net income decreased $5.2 million or 17 percent  reflecting a decrease in
investment  income,  primarily due to lower average investment yields, and lower
net realized  gains,  partially  offset by a decrease in the net  provision  for
certificate reserves.

Net provision for certificate reserves decreased $7.1 million or 10 percent this
period  versus the same period last year  reflecting  the effect on stock market
certificates of lower  appreciation in the S&P 500 and lower interest  crediting
rates on the interest rate  sensitive  portion of AECC's  certificate  reserves,
partially offset by higher average certificate reserves.


                                      -9-
<PAGE>

For the six months ended June 30, 2004, $2.6 million of total  investment  gains
were  partially  offset by $1.6 million of impairments  and losses.  Included in
these total investment gains and losses are $2.5 million of gross realized gains
and $0.9 million of gross realized  losses from sales of securities,  as well as
$0.2  million  of   other-than-temporary   impairment   losses  on  investments,
classified as Available-for-Sale.  For the six months ended June 30, 2003, $41.6
million  of  gross  realized  gains  from  sales  of  securities  classified  as
Available-for-Sale were substantially offset by $37.7 million of impairments and
losses.  Included in these  total  investment  losses are $2.5  million of gross
realized  losses  from  sales  of  securities,  as  well  as  $32.9  million  of
other-than-temporary   impairment   losses   on   investments,   classified   as
Available-for-Sale.

Impact of Recent Market Volatility on Results of Operations

AECC is  exposed to risk  associated  with  fluctuating  interest  payments  for
certain certificate  products tied to the London Interbank Offering Rate (LIBOR)
as such certificate  product interest crediting rates reset at shorter intervals
than the changes in the investment  portfolio  yield related to new  investments
and  reinvestments.  Therefore,  AECC's  spreads may be  negatively  impacted by
increases  in the general  level of interest  rates.  AECC may hedge the risk of
rising interest rates by entering into pay-fixed, receive-variable (LIBOR-based)
interest rate swaps that convert fluctuating interest crediting rate payments to
fixed  payments,  effectively  protecting  AECC from  unfavorable  interest rate
movements. The interest rate swaps are designated and accounted for as cash flow
hedges in accordance with Statement of Financial Accounting Standards (SFAS) No.
133. At June 30,  2004,  AECC had $300 million  notional of interest  rate swaps
expiring at various dates from January 2005 through  February  2005. At December
31, 2003,  AECC had $900 million  notional of interest  rate swaps  outstanding,
$600 million of which expired during the first quarter of 2004.

AECC is also exposed to risk associated  with  fluctuations in the S&P 500 stock
market index for three series of certificate products.  Such amounts credited to
the certificate  owners' accounts are tied to the relative change in the S&P 500
stock market index  between the beginning  and end of the  certificates'  terms.
AECC   purchases  and  writes  equity  index  options  in  order  to  meet  such
obligations.  The  recent  lower  appreciation  in the S&P 500  index  caused  a
decrease in AECC's  provision for  certificate  reserves,  which was effectively
offset by a decrease in net pre-tax mark-to-market gains on equity index options
included in investment income.

Liquidity and Capital Resources

AECC's  principal  sources  of cash  are  receipts  from  sales  of  face-amount
investment  certificates and net cash flows from  investments.  AECC's principal
uses of cash are  payments to  certificate  owners for  matured and  surrendered
certificates,  purchases  of  investments  and  return of  capital  or  dividend
payments to AEFC.

Cash received  from sales of  certificates  totaled $1.3 billion  during the six
months  ended June 30, 2004  compared to $1.1  billion  during the same period a
year ago. Certificate maturities and cash surrenders totaled $1.2 billion during
the six  months  ended June 30,  2004,  compared  to $1 billion  during the same
period a year ago.

AECC, as an issuer of face-amount  investment  certificate products, is impacted
whenever  there is a change in interest rates as  certificate  product  interest
crediting  rates  reset at shorter  intervals  than  changes in yields on AECC's
investments. In view of continued uncertainty in investment markets and

                                      -10-
<PAGE>

due to the short-term repricing nature of certificate  products,  AECC continues
to invest in securities that provide for more immediate,  periodic  interest and
principal payments,  resulting in improved  liquidity.  To accomplish this, AECC
continues to invest much of its investable funds in intermediate-term  bonds and
mortgage-backed  securities.  In addition,  AECC enters into  interest rate swap
contracts  that  effectively  lengthen  the rate reset  interval on  certificate
products. Also, on three series of AECC's certificates,  interest is credited to
certificate  owners'  accounts  based upon the relative  change in a major stock
market index between the beginning and end of the  certificates'  terms. To meet
the obligations  related to the provisions of these certain  certificates,  AECC
purchases  and writes index options on a major stock market index and, from time
to time, enters into futures contracts.

AECC's investment  program is designed to maintain an investment  portfolio that
will produce  competitive  portfolio yields within acceptable risk and liquidity
parameters.   AECC's  investment  program  considers  investment  securities  as
investments acquired to meet anticipated certificate owner obligations.

Debt   securities   and   marketable   equity   securities   are  classified  as
Available-for-Sale  and are  carried  at  fair  value.  Such  Available-for-Sale
classification  does not mean AECC expects to sell these securities,  but rather
these securities are available to meet possible  liquidity needs should there be
significant changes in market interest rates or certificate owner redemptions.

Cash used in investing  activities  was $188.8 million and $446.5 million during
the six months ended June 30, 2004 and 2003, respectively. This change primarily
reflects a favorable change in amounts due to and from brokers and a decrease in
sales,  maturities and redemptions of Available-for-Sale  and other investments,
offset by a decrease in total investment purchases.

Cash  provided by financing  activities  was $203.6  million and $218.8  million
during the six months  ended June 30, 2004 and 2003,  respectively.  This change
reflects an increase in net certificate  product inflows of $57.2 million,  more
than  offset by a $20  million  return of  capital  payment  to AEFC in the 2004
period, and net proceeds received from reverse repurchase agreements in the 2003
period of $52.4 million.

Investments  include $256.0 million,  $190.4 million and $122.1 million of below
investment   grade  securities   (excluding  net  unrealized   appreciation  and
depreciation)  at  June  30,  2004,   December  31,  2003  and  June  30,  2003,
respectively.  These  investments  represent  5.0  percent,  3.9 percent and 2.5
percent of AECC's investment  portfolio at June 30, 2004,  December 31, 2003 and
June 30, 2003, respectively. These investments may be subject to a higher degree
of risk than the investment  grade issues  because of the  borrower's  generally
greater  sensitivity  to  adverse  economic  conditions,  such as  recession  or
increasing  interest  rates,  and in  certain  instances,  the lack of an active
secondary market.  Expected returns on below investment grade securities reflect
consideration of such factors. AECC has identified certain investments for which
a decline in fair value has been determined to be other than temporary,  and has
written such securities down to fair value with a charge to net income.

The ratio of shareholder's  equity,  excluding  accumulated other  comprehensive
(loss) income, to total assets less certificate loans and net unrealized holding
gains and losses on investment securities classified as Available-for-Sale  (the
Capital-to-Assets-Ratio)  was 5.3  percent  and 5.4 percent at June 30, 2004 and
December  31,  2003,  respectively.  In  accordance  with an informal  agreement
established with the  Commissioner of Commerce for the State of Minnesota,  AECC
has agreed to maintain, at all times, a minimum  Capital-to-Assets Ratio of five
percent.

                                      -11-
<PAGE>

OTHER REPORTING MATTERS
Accounting Developments

See "Recently Issued Accounting Standards" section of Note 1 to the Financial
Statements.

ITEM 4.  CONTROLS AND PROCEDURES

AECC's management,  with the participation of AECC's Chief Executive Officer and
Chief Financial  Officer,  has evaluated the  effectiveness of AECC'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,  AECC's Chief  Executive  Officer and Chief  Financial  Officer have
concluded  that, as of the end of such period,  AECC's  disclosure  controls and
procedures  are  effective.  There have not been any changes in AECC'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 the fiscal quarter to which this report
relates that have materially  affected,  or are reasonably  likely to materially
affect, AECC's internal control over financial reporting.

Forward-Looking Statements

This report includes forward-looking statements,  which are subject to risks and
uncertainties.   The  words  "believe,"  "expect,"  "anticipate,"  "optimistic,"
"intend,"  "plan,"  "aim," "will,"  "should,"  "could,"  "would,"  "likely," and
similar expressions are intended to identify 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.  AECC  undertakes  no
obligation  to update or revise any  forward-looking  statements.  Factors  that
could  cause  actual  results to differ  materially  from these  forward-looking
statements  include,  but are not limited  to:  AECC's  ability to  successfully
implement a business model that allows for  significant  net income growth based
on revenue growth that is lower than historical levels, including the ability to
improve its operating  expense to revenue ratio both in the  short-term and over
time, which will depend in part on the  effectiveness of reengineering and other
cost control initiatives,  as well as factors impacting AECC's revenues;  AECC's
ability to grow its business,  over time, which will depend on AECC's ability to
manage its capital needs and the effect of business mix; the ability to increase
investment  spending,  which will depend in part on the equity markets and other
factors affecting revenues, and the ability to capitalize on such investments to
improve business metrics; the accuracy of certain critical accounting estimates,
including the fair value of the assets in AECC's investment portfolio (including
those  investments that are not readily  marketable),  fluctuation in the equity
and fixed income  markets,  which can affect the amount and types of certificate
products sold by AECC,  potential  deterioration in AECC's  high-yield and other
investments,   which  could  result  in  further  losses  in  AECC's  investment
portfolio;  the  ability  of AECC  to sell  certain  high-yield  investments  at
expected values and within anticipated timeframes and to maintain its high-yield
portfolio  at certain  levels in the  future;  and  spreads  in the  certificate
businesses; credit trends and the rate of bankruptcies, which can affect returns
on AECC's  investment  portfolios;  fluctuations  in foreign  currency  exchange
rates,  which could affect commercial  activities,  among other  businesses,  or
restrictions  on  convertibility  of  certain  currencies;  changes  in  laws or
government  regulations,  including tax laws affecting AECC's businesses or that
may affect the sales of the products and services that it offers, and regulatory
activity  in the  areas  of  customer  privacy,  consumer  protection,  business
continuity and data protection; the adoption of recently issued accounting rules
related to the  consolidation  of variable  interest  entities,  including those
involving  collateralized  debt  obligations and secured loan trusts,  that AECC
invests  in,  which  could  affect  both  AECC's  balance  sheet and  results of
operations; and outcomes

                                      -12-
<PAGE>

and costs  associated with litigation and compliance and regulatory  matters.  A
further  description of these and other risks and  uncertainties can be found in
AECC's Annual  Report on Form 10-K for the year ended  December 31, 2003 and its
other reports filed with the SEC.

PART II.  OTHER INFORMATION

AMERICAN EXPRESS CERTIFICATE COMPANY

Item 1.   Legal Proceedings

          AECC believes that it is not a party to, nor are any of its properties
          the  subject  of,  any  pending  legal,  arbitration,   or  regulatory
          proceedings that would have a material adverse effect on its financial
          condition, results of operations or liquidity. However, it is possible
          that the outcome of any such proceedings  could have a material impact
          on results of operations  in any  particular  reporting  period as the
          proceedings are resolved.

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               See Exhibit Index on page E-1 hereof.

          (b)  Reports on Form 8-K

               Form 8-K, filed May 17, 2004, Item 5, reporting that on May 17,
               2004 American Express Certificate Company appointed Dave K.
               Stewart as Principal Accounting Officer, replacing Jeryl Millner.


                                      -13-
<PAGE>

                                   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 CERTIFICATE COMPANY
                                -----------------------------------------
                                              (Registrant)




Date:  August 11, 2004                By  /s/ Paula R. Meyer
                                          -----------------------------------
                                              Paula R. Meyer
                                              Chief Executive Officer





Date:  August 11, 2004                By  /s/ Brian J. McGrane
                                          -----------------------------------
                                              Brian J. McGrane
                                              Vice President and Chief Financial
                                              Officer


                                      -14-
<PAGE>

                                  EXHIBIT INDEX

The following exhibits are filed as part of this Quarterly Report:

Exhibit             Description

31.1   Certification of Paula R. Meyer pursuant to Rule 13a-14(a) promulgated
       under the Securities Exchange Act of 1934, as amended.

31.2   Certification of Brian J. McGrane pursuant to Rule 13a-14(a) promulgated
       under the Securities Exchange Act of 1934, as amended.

32.1   Certification of Paula R. Meyer and Brian J. McGrane pursuant to
       18 U.S.C. Section 1350, as adopted   pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002.

                                       E-1