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 September 30, 2026, 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 nine months ended September 30, 2026 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 September 30, 2026
Balance at beginning of period	$	2,676	$	247	$	2,923
Provision for finance receivable losses	518		97		615
Charge-offs	(522)		(48)		(570)
Recoveries	98		3		101

Balance at end of period	$	2,770	$	299	$	3,069

Three Months Ended September 30, 2025
Balance at beginning of period	$	2,586	$	168	$	2,754

Provision for finance receivable losses	437		51		488
Charge-offs	(479)		(36)		(515)
Recoveries	86		2		88

Balance at end of period	$	2,630	$	185	$	2,815

Nine Months Ended September 30, 2026
Balance at beginning of period	$	2,656	$	209	$	2,865


Provision for finance receivable losses	1,464		225		1,689
Charge-offs	(1,660)		(148)		(1,808)
Recoveries	310		13		323

Balance at end of period	$	2,770	$	299	$	3,069



Nine Months Ended September 30, 2025
Balance at beginning of period	$	2,567	$	138	$	2,705
Provision for finance receivable losses	1,306		148		1,454
Charge-offs	(1,499)		(109)		(1,608)
Recoveries	256		8		264

Balance at end of period	$	2,630	$	185	$	2,815