We establish an allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by the level of contractual delinquency in the portfolio, specifically in the late-stage delinquency buckets and inclusive of the migration of the finance receivables through the delinquency buckets. We estimate and record an allowance for finance receivable losses to cover the expected lifetime credit losses on our finance receivables. Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions.

Our methodology to estimate expected credit losses uses recent macroeconomic forecasts, which include forecasts for unemployment. We leverage projections from various industry leading providers. We also consider inflationary pressures, consumer confidence levels, and elevated interest rates that may continue to impact the economic outlook. At June 30, 2025, our economic forecast used a reasonable and supportable period of 12 months. The increase in our allowance for finance receivable losses for the three and six months ended June 30, 2025 was driven by growth in net finance receivables. We may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

Changes in the allowance for finance receivable losses were as follows:


(dollars in millions)	Consumer Loans		Credit Cards		Total

Three Months Ended June 30, 2025
Balance at beginning of period	$	2,536	$	152	$	2,688
Provision for finance receivable losses	460		51		511
Charge-offs	(495)		(37)		(532)
Recoveries	85		2		87

Balance at end of period	$	2,586	$	168	$	2,754

Three Months Ended June 30, 2024
Balance at beginning of period	$	2,376	$	78	$	2,454

Provision for finance receivable losses	533		42		575
Charge-offs	(553)		(18)		(571)
Recoveries	75		—		75
Other *	31		—		31
Balance at end of period	$	2,462	$	102	$	2,564

Six Months Ended June 30, 2025
Balance at beginning of period	$	2,567	$	138	$	2,705


Provision for finance receivable losses	869		98		967
Charge-offs	(1,020)		(73)		(1,093)
Recoveries	170		5		175

Balance at end of period	$	2,586	$	168	$	2,754



Six Months Ended June 30, 2024
Balance at beginning of period	$	2,415	$	65	$	2,480
Provision for finance receivable losses	939		67		1,006
Charge-offs	(1,075)		(31)		(1,106)
Recoveries	152		1		153
Other *	31		—		31
Balance at end of period	$	2,462	$	102	$	2,564