0001101215-24-000224 | 10-Q | XBRL Viewer | Bread Financial Holdings INC

BORROWINGS OF LONG-TERM AND OTHER DEBT

9 Months Ended

Sep. 30, 2024

Long-term and other debt consisted of the following as of the dates presented:


Description	September 30, 2024		December 31, 2023		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	June 2026	(1)



Convertible senior notes due 2028	54		316		June 2028	4.25%
Senior notes due 2026	100		500		January 2026	7.00%
Senior notes due 2029	900		600		March 2029	9.75%
Subtotal	1,054		1,416
Less: Unamortized debt issuance costs	13		22
Total long-term and other debt	$	1,041	$	1,394

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	1,350	$	350	Various – May 2026 to Jul. 2027	4.62% to 5.47%
Conduit asset-backed securities	2,198		3,550		Various – Oct. 2024 to Oct. 2025	(2)
Subtotal	3,548		3,900
Less: Unamortized debt issuance costs	5		2
Total debt issued by consolidated VIEs	$	3,543	$	3,898

Total borrowings of long-term and other debt	$	4,584	$	5,292

______________________________

(1)The interest rate is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin.

(2)The interest rate is based upon SOFR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. As of September 30, 2024, the interest rates ranged from 5.94% to 6.13% with a weighted average rate of 5.97%. As of December 31, 2023, the interest rates ranged from 6.36% to 6.59% with a weighted average rate of 6.48%.

Certain of our long-term debt agreements include various restrictive financial and non-financial covenants. If we do not comply with certain of these covenants and an event of default occurs and remains uncured, the maturity of amounts outstanding may be accelerated and become payable, and, with respect to our credit agreement, the associated commitments may be terminated. As of September 30, 2024, we were in compliance with all such covenants.

Long-term and Other Debt

Credit Agreement

In June 2023, we entered into our credit agreement with Parent Company, as borrower, certain of our domestic subsidiaries, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and lender, and various other financial institutions, as lenders, which provides for a $700 million senior unsecured revolving credit facility (the Revolving Credit Facility). As of September 30, 2024, all $700 million remained available for future borrowings under the Revolving Credit Facility.

On October 18, 2024, we amended our Revolving Credit Facility to extend the maturity date from June 13, 2026 to October 18, 2028, as well as to delete the provisions relating to our prior term loan facility (which was repaid in full and terminated in December 2023) and make certain other amendments.

4.25% Convertible Senior Notes Due 2028

In June 2023, we issued and sold $316 million aggregate principal amount of 4.25% Convertible Senior Notes due 2028 (the Convertible Notes). The Convertible Notes bear interest at an annual rate of 4.25%, payable semi-annually in arrears on June 15 and December 15 of each year. The Convertible Notes mature on June 15, 2028, unless earlier repurchased, redeemed or converted. In connection with the issuance of the Convertible Notes, we entered into privately negotiated

capped call (Capped Call) transactions with certain financial institution counterparties. These transactions are expected generally to reduce potential dilution to our common stock upon any conversion of Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of the Convertible Notes, with such reduction and/or offset subject to a cap, based on the cap price. For additional information on the issuance of Convertible Notes and Capped Call transactions, see Note 10, “Borrowings of Long-Term and Other Debt,” to the audited Consolidated Financial Statements included in our 2023 Form 10K.

In August 2024 we entered into separate, privately negotiated repurchase agreements with a limited number of Convertible Note holders to repurchase $238 million aggregate principal amount of our outstanding Convertible Notes for a final aggregate cash repurchase price of $374 million, which was funded with cash on hand. The final aggregate cash repurchase price, or settlement value, was subject to adjustment as a portion of the repurchase price for select repurchases was based in part on the daily volume-weighted average price per share of Parent Company’s common stock over an agreed measurement period beginning in August 2024 and ending in September 2024. In connection with these aggregate repurchases, we recognized an $87 million inducement expense in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the total conversion value (calculated in accordance with the indenture governing the Convertible Notes), as well as a $60 million reduction in Additional paid-in capital (APIC) related to the total conversion value paid in excess of the carrying value of the Convertible Notes repurchased and a deferred tax impact.

In September 2024 we entered into two additional separate, privately negotiated repurchase agreements with holders of our Convertible Notes who approached us to repurchase $25 million aggregate principal amount of our outstanding Convertible Notes for a final aggregate cash repurchase price of $38 million, which was funded with cash on hand. The final aggregate cash repurchase price, or settlement value, was subject to adjustment as a portion of the repurchase price was based in part on the daily volume-weighted average price per share of Parent Company’s common stock over an agreed measurement period during September 2024. In connection with these aggregate repurchases, we recognized a $9 million inducement expense in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the total conversion value (calculated in accordance with the indenture governing the Convertible Notes), as well as a $7 million reduction in APIC related to the total conversion value paid in excess of the carrying value of the Convertible Notes repurchased and a deferred tax impact.

In summary, in total through August and September 2024, we recognized a $96 million inducement expense in Other non-interest expenses representing the settlement value, inclusive of transaction fees, in excess of the conversion value, and a $67 million reduction in APIC representing the excess of the conversion value over the carrying value of the Convertible Notes repurchased and a deferred tax impact.

Prior to the repurchases of the Convertible Notes in August and September 2024, the embedded conversion feature within the Convertible Notes was both, considered indexed to the Company’s own equity, and met the equity classification conditions; therefore it did not require accounting as a derivative under GAAP. Upon entering into the repurchase agreements that themselves required cash settlement of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes, the embedded conversion feature for those particular Convertible Notes no longer met the equity classification conditions; therefore requiring bifurcation and accounting as a derivative. Of the total $96 million recognized in Other non-interest expenses, $49 million represented the mark-to-market on the embedded conversion features over the measurement period from the date the repurchase agreements were executed until settlement thereof. These fair value adjustments were determined using the daily volume-weighted average price per share of Parent Company’s common stock over the measurement period. As all of the repurchases were negotiated and settled during the quarter ended September 30, 2024, there were no embedded conversion features requiring bifurcation and accounting as a derivative as of September 30, 2024.

Following the settlement of these repurchases, $54 million of Convertible Notes remained outstanding as of September 30, 2024. For these Convertible Notes, the embedded conversion feature is both, considered indexed to the Company’s own equity, and meets the equity classification conditions; therefore not requiring accounting as a derivative. We may, from time to time, seek to retire or repurchase our remaining outstanding Convertible Notes through cash purchases or exchanges for other securities, in open market purchases, tender offers, privately negotiated transactions or otherwise.

Beginning on October 1, 2024, the Convertible Notes became convertible at the option of the holders during the quarterly period ending December 31, 2024, due to the last reported sales price per share of Parent Company’s common stock having

exceeded 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding quarter i.e., the quarter ended September 30, 2024 (the Common Stock Sale Price Condition). The Common Stock Sale Price Condition is remeasured each quarter, so the Convertible Notes may continue or cease to be convertible in future quarters depending on the performance of our stock price. Upon any such conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock (at our election), in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. As of the date of this report, we have not received any conversion requests.

All of the Capped Call transactions continue to remain outstanding, notwithstanding the repurchases noted above. Although we do not trade or speculate in derivatives, the Capped Call transactions are expected to remain outstanding, possibly until maturity, with the objective of optimizing the economic value we receive under these transactions, in line with our strategic objectives designed to potentially offset certain of the economic impacts of the Convertible Notes.

9.750% Senior Notes due 2029

In January 2024, we issued and sold an additional $300 million aggregate principal amount of 9.750% Senior Notes due 2029 (Senior Notes due 2029) at an issue price of 101.00% of principal plus accrued interest from December 22, 2023. The Senior Notes due 2029 issued in January 2024 were issued as additional notes under the same indenture pursuant to which the initial $600 million of Senior Notes due 2029 were issued on December 22, 2023. The Senior Notes due 2029 that were issued in both December 2023 and January 2024 constitute a single series of notes and have the same terms, other than the issue date and issue price. We used the proceeds of the January 2024 offering of Senior Notes due 2029, together with $100 million of cash on hand, to fund the redemption of $400 million in aggregate principal amount of our outstanding 7.000% Senior Notes due 2026.

Debt Issued by Consolidated VIEs

An asset-backed security is a security whose value and income payments are derived from and collateralized by a specified pool of underlying assets – in our case, our credit card loans. The sale of the pool of underlying assets to general investors is accomplished through a securitization process. We regularly sell our credit card loans to our Trusts, which are consolidated. The liabilities of these consolidated VIEs include asset-backed securities for which creditors, or beneficial interest holders, do not have recourse to our general credit.

Conduit Facilities

We maintained committed syndicated bank Conduit Facilities to support the funding of our credit card loans for our Trusts. Borrowings outstanding under each private Conduit Facility bear interest at a margin above SOFR, or the asset-backed commercial paper costs of each individual conduit provider.

The table below summarizes our conduit capacities, borrowings and maturities for the periods presented:


(Millions)	December 31, 2023				Commitment		September 30, 2024
Conduit Facilities	Capacity		Drawn (6)		Increase		Capacity		Drawn (6)		Maturity Date
Comenity Bank
WFNMNT 2009-VFN (1)	$	2,650	$	2,015	$	—	$	2,650	$	1,380	October 2025
WFNMT 2009-VFC1 (2)	275		260		—		275		191		October 2024
Comenity Capital Bank
WFCMNT 2009-VFN (3)	2,250		1,025		—		2,250		377		February 2025
CCAST 2023-VFN1 (4)	250		250		—		250		250		September 2025
CCAST 2024-VFN1 (5)	—		—		200		200		—		February 2025
Total	$	5,425	$	3,550	$	200	$	5,625	$	2,198

__________________________________

(1)2009-VFN Conduit issued under World Financial Network Credit Card Master Note Trust (WFNMNT).

(2)2009-VFC1 Conduit issued under World Financial Network Credit Card Master Trust III (WFNMT).

(3)2009-VFN Conduit issued under World Financial Capital Master Note Trust (WFCMNT).

(4)2023-VFN1 Conduit issued under Comenity Capital Asset Securitization Trust (CCAST).

(5)2024-VFN1 Conduit issued under CCAST.

(6)Amounts drawn do not include $0.7 billion and $1.2 billion of debt issued by the Trusts as of September 30, 2024 and December 31, 2023, respectively, which were not sold, but were retained by us as a credit enhancement and therefore have been eliminated from the Total.

Fixed Rate Asset-Backed Term Notes

In May 2024, WFNMNT issued $570 million of Series 2024-A public term asset-backed notes, which mature in April 2027. The offering consisted of $500 million of Class A notes with a fixed interest rate of 5.47% per year, $44 million of zero coupon Class M notes, and $26 million of zero coupon Class B notes. The Class M and B notes were retained by us and eliminated from the Consolidated Balance Sheet. As well, in August 2024 WFNMNT issued $500 million of Series 2024-B public term asset-backed notes, which mature in July 2027. The offering consisted of $500 million of Class A notes with a fixed interest rate of 4.62% per year.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net income	$ 2	$ 171	$ 270	$ 675

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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-Subparagraph (SX 210.13-01(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 32: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482689/260-10-45-60B

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
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-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483499/205-20-50-7

Reference 34: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 230
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-Name Accounting Standards Codification
-Section 45
-Paragraph 28
-Publisher FASB
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Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482790/220-10-45-1A

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
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-Publisher FASB
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Reference 37: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478524/942-220-S99-1

+ Details

DEPOSITS - Deposits by Type (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Deposit Liability [Line Items]
Certificates of deposit	$ 6,116
Cardholder credit balances	25	$ 26
Deposits	12,847	13,620
Direct-to-consumer (retail)
Deposit Liability [Line Items]
Savings accounts	3,105	2,863
Certificates of deposit	4,378	3,591
Wholesale
Deposit Liability [Line Items]
Savings accounts	3,601	3,734
Certificates of deposit	1,738	3,406
Cardholder credit balances
Deposit Liability [Line Items]
Cardholder credit balances	$ 25	$ 26

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES - Components of Other Non-Interest Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Other Noninterest Income [Abstract]
Payment protection products	$ 30	$ 32	$ 91	$ 99
Loss from equity method investment	0	0	0	(5)
Other	7	1	8	2
Total other non-interest income	$ 37	$ 33	$ 99	$ 96

- Definition

Amount of income (loss) for proportionate share of equity method investee's income (loss).

+ References + Details

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($)
shares in Millions, $ in Millions

Total

Cumulative Effect, Period of Adoption, Adjustment

^[1]

Common Stock

Additional Paid-In Capital

Retained Earnings

Cumulative Effect, Period of Adoption, Adjustment

^[1]

Accumulated Other Comprehensive Loss

Balance (in shares) at Dec. 31, 2022

49.9

Beginning balance at Dec. 31, 2022

$ 2,265

$ 1

$ 2,192

$ 93

$ (21)

Increase (Decrease) in Stockholders' Equity

Net income

675

Other comprehensive income (loss)

(6)

Stock-based compensation

Capped call transactions for convertible senior notes due 2028

(30)

Repurchases of common stock (in shares)

(0.9)

Repurchases of common stock

(35)

Dividends and dividend equivalent rights declared

(33)

Issuance of shares to employees, net of shares withheld for employee taxes (in shares)

0.3

Issuance of shares to employees, net of shares withheld for employee taxes

(4)

Balance (in shares) at Sep. 30, 2023

49.3

Ending balance at Sep. 30, 2023

2,864

$ 1

2,155

735

(27)

Balance (in shares) at Jun. 30, 2023

50.1

Beginning balance at Jun. 30, 2023

2,736

$ 1

2,181

574

(20)

Increase (Decrease) in Stockholders' Equity

Net income

171

Other comprehensive income (loss)

(7)

Stock-based compensation

Repurchases of common stock (in shares)

(0.9)

Repurchases of common stock

(35)

Dividends and dividend equivalent rights declared

(10)

Issuance of shares to employees, net of shares withheld for employee taxes (in shares)

0.1

Issuance of shares to employees, net of shares withheld for employee taxes

(1)

Balance (in shares) at Sep. 30, 2023

49.3

Ending balance at Sep. 30, 2023

2,864

$ 1

2,155

735

(27)

Balance (in shares) at Dec. 31, 2023

49.3

Beginning balance at Dec. 31, 2023

2,918

$ (1)

$ 1

2,169

767

$ (1)

(19)

Increase (Decrease) in Stockholders' Equity

Net income

270

Other comprehensive income (loss)

Stock-based compensation

$ 41

Repurchases of common stock (in shares)

(0.3)

Repurchases of common stock

$ (11)

(11)

Repurchases of Convertible Notes

(67)

Dividends and dividend equivalent rights declared

(33)

Issuance of shares to employees, net of shares withheld for employee taxes (in shares)

0.7

Issuance of shares to employees, net of shares withheld for employee taxes

(8)

Balance (in shares) at Sep. 30, 2024

49.7

Ending balance at Sep. 30, 2024

3,112

$ 1

2,124

1,003

(16)

Balance (in shares) at Jun. 30, 2024

49.7

Beginning balance at Jun. 30, 2024

3,170

$ 1

2,179

1,012

(22)

Increase (Decrease) in Stockholders' Equity

Net income

Other comprehensive income (loss)

Stock-based compensation

Repurchases of Convertible Notes

(67)

Dividends and dividend equivalent rights declared

(11)

Balance (in shares) at Sep. 30, 2024

49.7

Ending balance at Sep. 30, 2024

$ 3,112

$ 1

$ 2,124

$ 1,003

$ (16)

[1]

Represents the cumulative effect, net of tax, of adopting the proportional amortization method of accounting for our tax credit investment. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” to the unaudited Consolidated Financial Statements

STOCKHOLDERS' EQUITY	9 Months Ended
STOCKHOLDERS' EQUITY	Sep. 30, 2024
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITY	STOCKHOLDERS’ EQUITY Stock Repurchase Programs On February 21, 2024, our Board of Directors approved a stock repurchase program to acquire up to $30 million in shares of our outstanding common stock in the open market during the period ending on December 31, 2024. The rationale for this repurchase program, and the amount thereof, was to offset the impact of dilution associated with issuances of employee restricted stock units, with the objective of reducing the Company’s weighted average diluted share count to approximately 50 million shares for 2024, subject to then current estimates and assumptions applicable as of the date of approval. During the nine months ended September 30, 2024, under the authorized stock repurchase program, we acquired a total of 0.3 million shares of our common stock for $11 million. Following their repurchase, these 0.3 million shares ceased to be outstanding shares of common stock and are now treated as authorized but unissued shares of common stock. As of September 30, 2024, we had $19 million remaining for future repurchases under the authorized stock repurchase program. Stock Compensation Expense During the nine months ended September 30, 2024, we awarded 1,305,297 service-based restricted stock units (RSUs) with a weighted average grant date fair market value per share of $37.77 as determined on the date of grant. Service-based restricted stock units typically vest ratably over three years provided that the participant is employed by us on each such vesting date. During the nine months ended September 30, 2024, we awarded 221,358 performance-based restricted stock units with a fair market value of $37.57 to our Named Executive Officers. Performance-based RSUs cliff vest at the end of three years, if specific performance measures tied to our financial performance are met, which are measured annually over the three-year period. For the performance-based RSUs awarded in 2024, the predefined vesting criteria typically permit a range from 0% to 150% to be earned. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition. If the performance targets are met, the awards will vest with respect to the entire award on February 15, 2027, provided that the participant is employed by us on the vesting date. For the three months ended September 30, 2024 and 2023, we recognized $13 million and $10 million in stock-based compensation expense, respectively. For the nine months ended September 30, 2024 and 2023, we recognized $41 million and $32 million in stock-based compensation expense, respectively. Dividends During the three and nine months ended September 30, 2024, we paid $10 million and $32 million in dividends to holders of our common stock. On October 24, 2024, our Board of Directors declared a quarterly cash dividend of $0.21 per share on our common stock, payable on December 13, 2024, to stockholders of record at the close of business on November 8, 2024.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478448/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 16
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-16

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

+ Details

DEPOSITS - Maturity of Deposits (Details) $ in Millions	Sep. 30, 2024 USD ($)
Other Liabilities Disclosure [Abstract]
2024	$ 761
2025	3,926
2026	560
2027	657
2028	184
Thereafter	28
Total certificates of deposit	6,116
Time deposits, unamortized debt discount	$ 3

FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Value of Company's Financial Instruments

The following table summarizes the carrying values and fair values of our financial assets and financial liabilities as of the dates presented:


	September 30, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	15,743	$	18,050	$	17,005	$	19,802
Investment securities	230		230		217		217
Financial liabilities
Deposits	12,847		12,875		13,620		13,583
Debt issued by consolidated VIEs	3,543		3,571		3,898		3,900
Long-term and other debt	1,041		1,130		1,394		1,457

Schedule of Assets And Liabilities Carried At Fair Value Measured On Recurring Basis

The following tables summarize our financial instruments measured at fair value on a recurring basis, categorized by the fair value hierarchy described in the preceding paragraphs as of the dates presented:


	September 30, 2024
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	230	$	48	$	182	$	—
Total assets measured at fair value	$	230	$	48	$	182	$	—


	December 31, 2023
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	217	$	46	$	171	$	—
Total assets measured at fair value	$	217	$	46	$	171	$	—

Schedule of Assets And Liabilities Disclosed But Not Carried At Fair Value

The fair values of financial instruments that are measured at amortized cost are estimates, and require management’s judgment; therefore, these fair value estimates may not be indicative of future fair values, nor can our fair value be estimated by aggregating all of the amounts presented. The following tables summarize our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of the dates presented:


	September 30, 2024
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	18,050	$	—	$	—	$	18,050
Total	$	18,050	$	—	$	—	$	18,050

Financial liabilities
Deposits	$	12,875	$	—	$	12,875	$	—
Debt issued by consolidated VIEs	3,571		—		3,571		—
Long-term and other debt	1,130		—		1,130		—
Total	$	17,576	$	—	$	17,576	$	—


	December 31, 2023
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	19,802	$	—	$	—	$	19,802
Total	$	19,802	$	—	$	—	$	19,802

Financial liabilities
Deposits	$	13,583	$	—	$	13,583	$	—
Debt issued by consolidated VIEs	3,900		—		3,900		—
Long-term and other debt	1,457		—		1,457		—
Total	$	18,940	$	—	$	18,940	$	—

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions	Feb. 20, 2024	Oct. 18, 2023
Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc.,
Loss Contingencies [Line Items]
Damages sought	$ 750
LoyaltyOne, Co. v. Bread Financial Holdings, Inc. et al
Loss Contingencies [Line Items]
Damages sought		$ 775

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value Level Disclosure (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Assets disclosed at fair value
Investment securities	$ 230	$ 217
Total assets measured at fair value	230	217
Level 1
Assets disclosed at fair value
Investment securities	48	46
Total assets measured at fair value	48	46
Level 2
Assets disclosed at fair value
Investment securities	182	171
Total assets measured at fair value	182	171
Level 3
Assets disclosed at fair value
Investment securities	0	0
Total assets measured at fair value	$ 0	$ 0

REGULATORY MATTERS AND CAPITAL ADEQUACY

9 Months Ended

Sep. 30, 2024

Regulatory Capital Requirements under Banking Regulation [Abstract]

REGULATORY MATTERS AND CAPITAL ADEQUACY

Regulatory Matters

CB is subject to various regulatory capital requirements administered by the State of Delaware and the FDIC. CCB is also subject to various regulatory capital requirements administered by the State of Utah and the FDIC. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by our regulators. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, both Banks must meet specific capital guidelines that involve quantitative measures of their assets and liabilities as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by these regulators about components, risk weightings and other factors. In addition, both Banks are limited in the amounts they can pay as dividends to the Parent Company.

Quantitative measures, established by regulations to ensure capital adequacy, require the Banks to maintain minimum amounts and ratios of Tier 1 capital to average assets, and Common equity tier 1, Tier 1 capital and Total capital, all to risk weighted assets. Failure to meet these minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions by the Banks’ regulators that if undertaken, could have a direct material effect on CB’s and/or CCB’s operating activities, as well as our operating activities. Based on these regulations, as of September 30, 2024 and 2023, each Bank met all capital requirements to which it was subject, and maintained capital ratios in excess of the minimums required to qualify as well capitalized. The Banks seek to maintain capital levels and ratios in excess of the minimum regulatory requirements inclusive of the 2.5% Capital Conservation Buffer. Although Bread Financial is not a bank holding company as defined under the Bank Holding Company Act, we seek to maintain capital levels and ratios in excess of the minimums required for bank holding companies. As of September 30, 2024 the actual capital ratios and minimum ratios for each Bank, as well as Bread Financial, are as follows:


	Actual Ratio			Minimum Ratio for Capital Adequacy Purposes		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
Total Company
Common equity tier 1 capital ratio (1)	13.3		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	13.3			6.0		8.0
Total risk-based capital ratio (3)	14.6			8.0		10.0
Tier 1 leverage capital ratio (4)	11.7			4.0		5.0
Total risk-weighted assets (5)	$	19,010

Comenity Bank
Common equity tier 1 capital ratio (1)	17.4		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	17.4			6.0		8.0
Total risk-based capital ratio (3)	18.8			8.0		10.0
Tier 1 leverage capital ratio (4)	15.2			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio (1)	16.0		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	16.0			6.0		8.0
Total risk-based capital ratio (3)	17.4			8.0		10.0
Tier 1 leverage capital ratio (4)	14.4			4.0		5.0

__________________________________

(1)Common equity tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets. In the calculation of tier 1 capital, we follow the Basel III Standardized Approach and therefore Total stockholders' equity has been reduced, primarily by Goodwill and intangible assets, net.

(2)Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets. In the calculation of tier 1 capital, we follow the Basel III Standardized Approach and therefore Total stockholders' equity has been reduced, primarily by Goodwill and intangible assets, net.

(3)Total risk-based capital ratio represents total capital divided by total risk-weighted assets. In the calculation of total capital, we follow the Basel III Standardized Approach and therefore tier 1 capital has been increased by tier 2 capital, which for us is the allowable portion of the Allowance for credit losses.

(4)Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III Standardized Approach.

We are also involved, from time to time, in reviews, investigations, subpoenas, supervisory actions and other proceedings (both formal and informal) by governmental agencies regarding our business, which could subject us to significant fines, penalties, obligations to change our business practices, significant restrictions on our existing business or ability to develop new business, cease-and-desist orders, safety-and-soundness directives or other requirements resulting in increased expenses, diminished income and damage to our reputation.

On November 20, 2023, following the consent of the Board of Managers of Comenity Servicing LLC (the Servicer), the FDIC issued a consent order to the Servicer. The Servicer is not one of our Bank subsidiaries, but is our wholly-owned subsidiary that services substantially all of our loans. The consent order arose out of the June 2022 transition of our credit card processing services to strategic outsourcing partners and addresses certain shortcomings in the Servicer’s information technology (IT) systems development, project management, business continuity management, cloud operations, and third-party oversight. The Servicer entered into the consent order for the purpose of resolving these matters without admitting or denying any violations of law or regulation set forth in the order. The consent order does not contain any monetary penalties or fines.

The Servicer continues to take significant steps to strengthen the organization’s IT governance and address the other issues identified in the consent order, working diligently to ensure that all of the requirements of the consent order are satisfied. Without limiting the generality of the foregoing, the Servicer has taken steps to address each provision within the consent

order that required action be taken by a specified deadline, including providing a copy of the consent order to the Parent Company Board of Directors, increasing the size and governance processes of the Servicer’s Board of Managers, establishing an Executive Oversight Committee to oversee and ensure compliance with the consent order, and submitting all required reports and plans of action to the FDIC. The Servicer is committed to complying with each of the ongoing or longer-term requirements of the consent order, including the enhancement of its compliance management processes and related corporate governance, compliance with the applicable system conversion requirements, and enhanced risk management and reporting requirements. In addition, the Board of Directors of each of the Banks oversee the Servicer’s compliance with the requirements of the consent order and provide effective challenge of Servicer management toward that end.

On August 22, 2024, each Bank entered into an agreement with the FDIC to pay civil money penalties (CMPs) of $1 million per Bank. The CMPs arose out of the June 2022 transition of our credit card processing services to strategic outsourcing partners and were related to disruptions to the Banks’ customer reward programs and automatic payments following the transition. These issues were self-identified and remediated timely, and the Banks provided full cooperation with the regulators throughout their examination. The Banks’ agreements to pay the CMPs did not require admission of wrongdoing, and there are no operational limitations on the Banks or our business associated with the CMPs.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

CREDIT CARD AND OTHER LOANS - Distribution of Credit Card Loans by Score (Details) - Credit card loans	Sep. 30, 2024	Dec. 31, 2023
661 or Higher
Financing Receivable, Credit Quality Indicator [Line Items]
Percentage of financing receivable outstanding	57.00%	57.00%
601 to 660
Financing Receivable, Credit Quality Indicator [Line Items]
Percentage of financing receivable outstanding	27.00%	27.00%
600 or Lower
Financing Receivable, Credit Quality Indicator [Line Items]
Percentage of financing receivable outstanding	16.00%	16.00%

FAIR VALUES OF FINANCIAL INSTRUMENTS - Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Financial assets
Credit card and other loans, net	$ 18,050	$ 19,802
Total	18,050	19,802
Financial liabilities
Deposits	12,875	13,583
Debt issued by consolidated VIEs	3,571	3,900
Long-term and other debt	1,130	1,457
Total	17,576	18,940
Level 1
Financial assets
Credit card and other loans, net	0	0
Total	0	0
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total	0	0
Level 2
Financial assets
Credit card and other loans, net	0	0
Total	0	0
Financial liabilities
Deposits	12,875	13,583
Debt issued by consolidated VIEs	3,571	3,900
Long-term and other debt	1,130	1,457
Total	17,576	18,940
Level 3
Financial assets
Credit card and other loans, net	18,050	19,802
Total	18,050	19,802
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total	$ 0	$ 0

DEPOSITS

9 Months Ended

Sep. 30, 2024

Other Liabilities Disclosure [Abstract]

DEPOSITS

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Interest-bearing	$	12,822	$	13,594
Non-interest-bearing (including cardholder credit balances)	25		26
Total deposits	$	12,847	$	13,620

Deposits by deposit type as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	3,105	$	2,863
Wholesale	3,601		3,734
Certificates of deposit
Direct-to-consumer (retail)	4,378		3,591
Wholesale	1,738		3,406
Cardholder credit balances	25		26
Total deposits	$	12,847	$	13,620

The scheduled maturities of certificates of deposit were as follows as of September 30, 2024:


(Millions)
2024 (1)	$	761
2025	3,926
2026	560
2027	657
2028	184
Thereafter	28
Total certificates of deposit	$	6,116

__________________________________

(1)The 2024 balance includes $3 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

As of September 30, 2024 and December 31, 2023, deposits that exceeded applicable FDIC insurance limits, which are generally $250,000 per depositor, per insured bank, per ownership category, were estimated to be $543 million (4% of Total deposits) and $509 million (4% of Total deposits), respectively. The measurement of estimated uninsured deposits aligns with regulatory guidelines.

DEPOSITS - Interest and Non-Interest Bearing (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Other Liabilities Disclosure [Abstract]
Interest-bearing	$ 12,822	$ 13,594
Non-interest-bearing (including cardholder credit balances)	25	26
Total deposits	$ 12,847	$ 13,620

INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Investment

The following table provides a summary of our Investments as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Investment securities:
Available-for-sale debt securities	$	182	$	171
Equity securities	48		46
Total investment securities	230		217
Equity method and other investments	47		36
Total Investments	$	277	$	253

Schedule of Principal Components of Other Investments Which Are Carried At Fair Value

The table below reflects unrealized gains and losses on AFS debt securities as of the dates presented:


	September 30, 2024								December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale securities	$	199	$	—	$	(17)	$	182	$	192	$	—	$	(21)	$	171
Total	$	199	$	—	$	(17)	$	182	$	192	$	—	$	(21)	$	171

Schedule of Debt securities in Gross Unrealized Loss Position

The following tables provide information about AFS debt securities in a gross unrealized loss position and the length of time that individual securities have been in a continuous unrealized loss position, as of the dates presented:


	September 30, 2024
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	9	$	—	$	150	$	(17)	$	159	$	(17)
Total	$	9	$	—	$	150	$	(17)	$	159	$	(17)


	December 31, 2023
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	23	$	—	$	141	$	(21)	$	164	$	(21)
Total	$	23	$	—	$	141	$	(21)	$	164	$	(21)

CREDIT CARD AND OTHER LOANS (Tables)

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Schedule of Components of Credit Card And Other Loans

The following table provides Credit card and other loans, as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Credit card loans	$	17,630	$	18,999
BNPL and other loans	303		334
Total credit card and other loans (1)(2)	17,933		19,333
Less: Allowance for credit losses	(2,190)		(2,328)
Credit card and other loans, net	$	15,743	$	17,005

__________________________________

(1)Includes $11.6 billion and $12.8 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of September 30, 2024 and December 31, 2023, respectively.

(2)Includes $383 million and $371 million, of accrued interest and fees that have not yet been billed to cardholders as of September 30, 2024 and December 31, 2023, respectively.

Schedule of Aging Analysis of Total Credit Card And Other Loans Portfolio At Amortized Cost

The following table provides the delinquency trends of our Credit card and other loans portfolio, based on the amortized cost, as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
September 30, 2024	$	379	$	303	$	746	$	1,428	$	16,099	$	17,527

December 31, 2023	$	422	$	323	$	809	$	1,554	$	17,373	$	18,927

__________________________________

(1)BNPL and other loans delinquencies have been included with credit card loan delinquencies in the table above, as amounts were insignificant as of each period presented. As permitted by GAAP, the primary difference between the amortized cost basis included in the table above and the carrying value of our Credit card and other loans relates to the exclusion of unbilled finance charges and fees from the amortized cost basis. As of September 30, 2024 and December 31, 2023, accrued interest and fees that have not yet been billed to cardholders were $383 million and $371 million, respectively, included in Credit card and other loans on the Consolidated Balance Sheets.

The following table reflects the performance of our credit card loans that were modified within the 12 months prior to the dates presented and remain in a Loan Modification program as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Loan Modifications - Credit Card Loans
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
September 30, 2024	$	20	$	18	$	20	$	58	$	235	$	293

December 31, 2023	$	17	$	16	$	22	$	55	$	214	$	269

Schedule of Composition of Credit Quality

The following table reflects the distribution of credit card loans by Vantage score as of the dates presented:


	Vantage
	September 30, 2024						December 31, 2023
	661 or Higher		601 to 660		600 or Lower		661 or Higher		601 to 660		600 or Lower
Credit card loans	57	%	27	%	16	%	57	%	27	%	16	%

Schedule of Information on Credit Card Loans Considered Troubled Debt Restructurings

The following table provides information relating to credit card loans to borrowers experiencing financial difficulty that were granted a concession under a Loan Modification program during the periods presented:


	Three Months Ended September 30, 2024						Three Months Ended September 30, 2023
	Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)		Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)
(Millions, except percentages)
Credit card loans	$	94	0.5	%	21.8	%	$	86	0.5	%	20.2	%


	Nine Months Ended September 30, 2024						Nine Months Ended September 30, 2023
	Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)		Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)
(Millions, except percentages)
Credit card loans	$	238	1.4	%	21.7	%	$	189	1.1	%	20.1	%

__________________________________

(1)Represents the outstanding balances as of September 30, 2024 and 2023, of all Loan Modifications undertaken in the past three and nine months, respectively, for credit card loans that remain in modification programs as of September 30, 2024 and 2023. The outstanding balances include principal, accrued interest and fees.

The following table provides additional information regarding credit card Loan Modifications that have subsequently defaulted within 12 months of their modification dates (or since implementation beginning January 1, 2023), for the periods presented; the probability of default is factored into the Allowance for credit losses:


	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023
	Number of Modifications	Outstanding Balance		Number of Modifications	Outstanding Balance
(Millions, except for Number of modifications)
Loan Modifications that subsequently defaulted	7,653	$	14	4,047	$	7


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
	Number of Modifications	Outstanding Balance		Number of Modifications	Outstanding Balance
(Millions, except for Number of modifications)
Loan Modifications that subsequently defaulted	16,342	$	29	6,567	$	11

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE BUSINESS

We are a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions. We create opportunities for our customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, we deliver growth for our partners through a comprehensive product suite, including private label and co-brand credit cards and buy now, pay later (BNPL) products such as installment loans and our “split-pay” offerings. We also offer direct-to-consumer solutions that give customers more access, choice and freedom through our branded Bread Cashback® American Express® Credit Card, Bread RewardsTM American Express® Credit Card and Bread Savings® products.

Our partner base consists of large consumer-based businesses, including well-known brands such as (alphabetically) AAA, Academy Sports + Outdoors, Caesars, Dell Technologies, the NFL, Signet, Ulta and Victoria’s Secret, as well as small- and medium-sized businesses (SMBs). Our partner base is well diversified across a broad range of industries, including travel and entertainment, health and beauty, jewelry, sporting goods, home goods, technology and electronics and the industry in which we first began, specialty apparel. We believe our comprehensive suite of payment, lending and saving solutions, along with our related marketing and data and analytics, allows us to offer products relevant across all customer segments (Gen Z, Millennial, Gen X and Baby Boomers). The breadth and quality of our product and service offerings have enabled us to establish and maintain long-standing partner relationships. We operate our business through a single reportable segment, with our primary source of revenue being from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners.

Throughout this report, unless stated or the context implies otherwise, the terms “Bread Financial”, “BFH”, the “Company”, “we”, “our” or “us” refer to Bread Financial Holdings, Inc. and its subsidiaries on a consolidated basis. References to “Parent Company” refer to Bread Financial Holdings, Inc. on a parent-only standalone basis. In addition, in this report we may refer to the retailers and other companies with whom we do business as our “partners”, “brand partners”, or “clients”, provided that the use of the term “partner”, “partnering” or any similar term does not mean or imply a formal legal partnership, and is not meant in any way to alter the terms of Bread Financial’s relationship with any third parties. We offer our credit products through our insured depository institution subsidiaries, Comenity Bank and Comenity Capital Bank, which together are referred to herein as the “Banks”.

BASIS OF PRESENTATION

These unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 20, 2024 (the 2023 Form 10-K). If not significantly different, certain note disclosures included therein have been omitted from these unaudited Consolidated Financial Statements.

The unaudited Consolidated Financial Statements included herein reflect all adjustments, which consist of normal, recurring adjustments that are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The unaudited Consolidated Financial Statements also include amounts that relate to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. Such amounts have been classified within Discontinued operations and primarily relate to the after-tax impact of contractual indemnification and tax-related matters. For additional information about our previously disclosed discontinued operations please refer to Note 22, “Discontinued Operations and Bank Holding Company Financial Presentation” to the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosures of contingent assets and liabilities. These accounting estimates and assumptions reflect the best judgment of management, but actual results could differ. The most significant of those estimates and assumptions relate to the Allowance for credit losses, Provision for income taxes and Goodwill.

The accompanying unaudited Consolidated Financial Statements include the accounts of the Company and all subsidiaries in which we have a controlling financial interest. All intercompany transactions have been eliminated.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no material changes to our significant accounting policies as discussed in Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” included in our 2023 Form 10-K.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS


Accounting Standards Recently Adopted
Standard	Guidance	Timing and Financial Statement Impact
Investments - Equity Method and Joint Ventures: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Issued March 2023	Expands the election to apply the proportional amortization method of accounting to tax credit investments beyond low-income-housing tax credit investments, when certain conditions are met.	Adopted under the modified retrospective method on January 1, 2024, which resulted in an insignificant decrease to retained earnings. Adoption did not have a significant impact on our results of operations, financial position, regulatory risk-based capital, or on our operational processes, controls and governance in support of the new guidance.
Accounting Standards Recently Issued but Not Yet Adopted
Standard	Guidance	Timing and Financial Statement Impact
Segment Reporting: Improvements to Reportable Segment Disclosures Issued November 2023	Requires interim and annual disclosure of significant segment expense categories and amounts that are regularly provided to the chief operating decision maker, as well as disclosure of the aggregate amount and description of other segment items beyond significant segment expenses.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2024, and effective for interim reporting periods beginning in 2025. Early adoption is permitted, although we do not plan to early adopt. Adoption will result in expanded disclosures for our single reportable segment but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Income Taxes: Improvements to Income Tax Disclosures Issued December 2023	Requires greater disaggregation of rate reconciliation and income taxes paid information, as well as other changes intended to enhance the transparency and decision-usefulness of income tax disclosures.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2025. Early adoption is permitted, although we do not plan to early adopt. Adoption will require enhancements to our income tax disclosures but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

CREDIT CARD AND OTHER LOANS - Troubled Debt Restructurings (Details) - Consumer Portfolio Segment - Loan Modifications that subsequently defaulted $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($) modification	Sep. 30, 2023 USD ($) modification	Sep. 30, 2024 USD ($) modification	Sep. 30, 2023 USD ($) modification
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Modifications \| modification	7,653	4,047	16,342	6,567
Outstanding Balance \| $	$ 14	$ 7	$ 29	$ 11

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES - Components of Other Non-Interest Expenses (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Other Noninterest Expenses [Abstract]
Repurchased Convertible Notes	$ 96	$ 0	$ 96	$ 0
Professional services and regulatory fees	25	29	85	101
Occupancy expense	5	5	17	16
Other	10	22	44	44
Total other non-interest expenses	$ 136	$ 56	$ 242	$ 161

REGULATORY MATTERS AND CAPITAL ADEQUACY (Tables)

9 Months Ended

Sep. 30, 2024

Regulatory Capital Requirements under Banking Regulation [Abstract]

Schedule of Actual Capital Ratios And Minimum Ratios

As of September 30, 2024 the actual capital ratios and minimum ratios for each Bank, as well as Bread Financial, are as follows:


	Actual Ratio			Minimum Ratio for Capital Adequacy Purposes		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
Total Company
Common equity tier 1 capital ratio (1)	13.3		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	13.3			6.0		8.0
Total risk-based capital ratio (3)	14.6			8.0		10.0
Tier 1 leverage capital ratio (4)	11.7			4.0		5.0
Total risk-weighted assets (5)	$	19,010

Comenity Bank
Common equity tier 1 capital ratio (1)	17.4		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	17.4			6.0		8.0
Total risk-based capital ratio (3)	18.8			8.0		10.0
Tier 1 leverage capital ratio (4)	15.2			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio (1)	16.0		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	16.0			6.0		8.0
Total risk-based capital ratio (3)	17.4			8.0		10.0
Tier 1 leverage capital ratio (4)	14.4			4.0		5.0

__________________________________

(4)Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III Standardized Approach.

CREDIT CARD AND OTHER LOANS - Credit Cards (Details) - Credit Card Loans - Contractual Interest Rate Reduction - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Financing Receivable, Troubled Debt Restructuring [Line Items]
Account Balances	$ 94	$ 86	$ 238	$ 189
% of Total Credit Card Loans	0.50%	0.50%	1.40%	1.10%
Weighted Average Interest Rate Reduction (% points)	21.80%	20.20%	21.70%	20.10%

ALLOWANCE FOR CREDIT LOSSES (Tables)

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

Schedule of Allowance for Loan Loss

The following table provides our Allowance for credit losses for our Credit card and other loans. The amount of the related Allowance for credit losses on BNPL and other loans is insignificant and therefore has been included in the table below for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Beginning balance	$	2,164	$	2,207	$	2,328	$	2,464

Provision for credit losses (1)	369		304		980		747
Change in the estimate for uncollectible unpaid interest and fees	5		—		5		5
Net principal losses (2)	(348)		(304)		(1,123)		(1,009)
Ending balance	$	2,190	$	2,207	$	2,190	$	2,207

__________________________________

(1)Provision for credit losses includes a build/release for the Allowance, as well as replenishment of Net principal losses.

(2)Net principal losses are presented net of recoveries of $85 million and $69 million for the three months ended September 30, 2024 and 2023, respectively, and $286 million and $242 million for the nine months ended September 30, 2024 and 2023, respectively. Net principal losses for the nine months ended September 30, 2023 include a $10 million adjustment related to the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency; no such adjustment was made in the current period.

SECURITIZATIONS

9 Months Ended

Sep. 30, 2024

Securitizations [Abstract]

SECURITIZATIONS

We account for transfers of financial assets as either sales or financings. Transfers of financial assets that are accounted for as a sale are removed from the Consolidated Balance Sheets with any realized gain or loss reflected in the Consolidated Statements of Income during the period in which the sale occurs. Transfers of financial assets that are not accounted for as a sale are treated as a financing.

We regularly securitize the majority of our credit card loans through the transfer of those loans to one of our Trusts. We perform the decision making for the Trusts, as well as servicing the cardholder accounts that generate the credit card loans held by the Trusts. In our capacity as a servicer, we administer the loans, collect payments and charge-off uncollectible balances. Servicing fees are earned by a subsidiary, which are eliminated in consolidation.

The Trusts are consolidated VIEs because they have insufficient equity at risk to finance their activities – the issuance of debt securities and notes, collateralized by the underlying credit card loans. Because we perform the decision making and servicing for the Trusts, we have the power to direct the activities that most significantly impact the Trusts’ economic performance (the collection of the underlying credit card loans). In addition, we hold all of the variable interests in the Trusts, with the exception of the liabilities held by third-parties. These variable interests provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to the Trusts. As a result of these considerations, we are deemed to be the primary beneficiary of the Trusts and therefore consolidate the Trusts.

The Trusts issue debt securities and notes, which are non-recourse to us. The collections on the securitized credit card loans held by the Trusts are available only for payment of those debt securities and notes, or other obligations arising in the securitization transactions. For our securitized credit card loans, during the initial phase of a securitization reinvestment period, we generally retain principal collections in exchange for the transfer of additional credit card loans into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.

Under the Indentures of each Trust and its Indenture Supplements, we are required to maintain minimum interests in our Trusts ranging from a minimum of 4% up to a maximum of 10% of the securitized credit card loans. This requirement is met through a transferor’s interest and is supplemented through excess funding deposits which represent cash amounts deposited with the trustee of the securitizations. Cash collateral, restricted deposits are generally released proportionately as investors are repaid. Under the terms of the Trusts, the occurrence of certain triggering events associated with the performance of the securitized credit card loans in each Trust could result in certain required actions, including payment of Trust expenses, the establishment of reserve funds, or early amortization of the debt securities and/or notes, in a worst-case scenario. During the three and nine months ended September 30, 2024 and 2023, no such triggering events occurred.

The following tables reflect the total securitized credit card loans and related delinquencies, and net principal losses of securitized credit card loans for the periods presented:


	September 30, 2024		December 31, 2023
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	11,644	$	12,844
Of which: principal amount of credit card loans 91 days or more past due	$	306	$	323


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Net principal losses of securitized credit card loans	$	200	$	179	$	637	$	592

DEPOSITS (Tables)

9 Months Ended

Sep. 30, 2024

Other Liabilities Disclosure [Abstract]

Schedule of Deposit by Type

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Interest-bearing	$	12,822	$	13,594
Non-interest-bearing (including cardholder credit balances)	25		26
Total deposits	$	12,847	$	13,620

Deposits by deposit type as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	3,105	$	2,863
Wholesale	3,601		3,734
Certificates of deposit
Direct-to-consumer (retail)	4,378		3,591
Wholesale	1,738		3,406
Cardholder credit balances	25		26
Total deposits	$	12,847	$	13,620

Schedule of Time Deposit Maturities

The scheduled maturities of certificates of deposit were as follows as of September 30, 2024:


(Millions)
2024 (1)	$	761
2025	3,926
2026	560
2027	657
2028	184
Thereafter	28
Total certificates of deposit	$	6,116

__________________________________

(1)The 2024 balance includes $3 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph e
-Publisher SEC

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph d
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph c
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Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
-Subparagraph (5)
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Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
-Subparagraph (4)
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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-Number 229
-Section 1406
-Paragraph a
-Subparagraph (3)
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Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
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-Number 229
-Section 1406
-Paragraph a
-Subparagraph (2)
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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-Number 229
-Section 1406
-Paragraph a
-Subparagraph (1)
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
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-Number 229
-Section 1406
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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-Number 229
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-Subparagraph (1)
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Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Regulation S-K (SK)
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-Name Regulation S-K (SK)
-Number 229
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-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph f
-Subparagraph (2)(ii)
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+ Details

SECURITIZATIONS - Securitized Credit Card loans, Delinquencies andNet Principal Losses (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Offsetting Assets [Line Items]
Of which: principal amount of credit card loans 91 days or more past due	$ 306		$ 306		$ 323
Net principal losses of securitized credit card loans	200	$ 179	637	$ 592
Variable Interest Entity, Primary Beneficiary
Offsetting Assets [Line Items]
Total credit card loans – available to settle obligations of consolidated VIEs	$ 11,644		$ 11,644		$ 12,844

BORROWINGS OF LONG-TERM AND OTHER DEBT - Conduit Facilities (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Drawn	$ 700	$ 1,200
Comenity Bank \| Line of Credit \| WFNMNT 2009-VFN
Debt Instrument [Line Items]
Capacity	2,650	2,650
Drawn	1,380	2,015
Commitment Increase	0
Comenity Bank \| Line of Credit \| WFNMT 2009-VFC1
Debt Instrument [Line Items]
Capacity	275	275
Drawn	191	260
Commitment Increase	0
Comenity Capital Bank \| Line of Credit
Debt Instrument [Line Items]
Capacity	5,625	5,425
Drawn	2,198	3,550
Commitment Increase	200
Comenity Capital Bank \| Line of Credit \| WFCMNT 2009-VFN
Debt Instrument [Line Items]
Capacity	2,250	2,250
Drawn	377	1,025
Commitment Increase	0
Comenity Capital Bank \| Line of Credit \| CCAST 2023-VFN1
Debt Instrument [Line Items]
Capacity	250	250
Drawn	250	250
Commitment Increase	0
Comenity Capital Bank \| Line of Credit \| CCAST 2024-VFN1
Debt Instrument [Line Items]
Capacity	200	0
Drawn	0	$ 0
Commitment Increase	$ 200

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The Provision for income taxes decreased for the three months ended September 30, 2024 primarily driven by a decrease in Income from continuing operations before income taxes. The effective tax rate was 92.2% and 23.0% for the three month periods ended September 30, 2024 and 2023, respectively. The increase in the effective tax rate resulted from an increase in nondeductible items in the current year period, primarily related to the nondeductible portion of our repurchased Convertible Notes transactions, and a favorable discrete item in the prior year period. The Provision for income taxes decreased for the nine months ended September 30, 2024 primarily driven by a decrease in Income from continuing operations before income taxes in the current year relative to the prior year period, which itself was higher due to the gain on the sale of the BJ's portfolio. The effective tax rate was 33.4% and 27.1% for the nine month periods ended September 30, 2024 and 2023, respectively. The increase in the effective tax rate was also driven primarily by an increase in nondeductible items in the current year period related to the nondeductible portion of our repurchased Convertible Notes transactions. We are under examination by the Internal Revenue Service as well as tax authorities in various states. The tax years under examination and open for examination vary by jurisdiction. U.S. Federal income tax returns are no longer subject to examination for years before 2015, and with a few exceptions, state and local income tax returns are no longer subject to examination for years before 2015. Foreign income tax returns are no longer subject to examination for years before 2018.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
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-Subparagraph (SX 210.4-08(h)(2))
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 2	$ 171	$ 270	$ 675
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale debt securities	8	(9)	4	(8)
Tax (expense) benefit	(2)	2	(1)	2
Unrealized gain (loss) on available-for-sale debt securities, net of tax	6	(7)	3	(6)
Other comprehensive income (loss), net of tax	6	(7)	3	(6)
Total comprehensive income, net of tax	$ 8	$ 164	$ 273	$ 669

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
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+ Details

INVESTMENTS - Amortized Cost (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Amortized Cost	$ 199	$ 192
Unrealized Gains	0	0
Unrealized Losses	(17)	(21)
Fair Value	$ 182	$ 171

- Definition

Amount of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

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Reference 1: http://www.xbrl.org/2003/role/exampleRef
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-Section 45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479130/326-30-45-1

+ Details

UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
ASSETS
Cash and cash equivalents	$ 3,451	$ 3,590
Credit card and other loans
Total credit card and other loans (includes loans available to settle obligations of consolidated variable interest entities September 30, 2024, $11,644; December 31, 2023, $12,844, respectively)	17,933	19,333
Allowance for credit losses	(2,190)	(2,328)
Credit card and other loans, net	15,743	17,005
Investments (Fair value: September 30, 2024, $230; December 31, 2023, $217)	277	253
Property and equipment, net	148	167
Goodwill and intangible assets, net	754	762
Other assets	1,363	1,364
Total assets	21,736	23,141
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	12,847	13,620
Debt issued by consolidated variable interest entities	3,543	3,898
Long-term and other debt	1,041	1,394
Other liabilities	1,193	1,311
Total liabilities	18,624	20,223
Commitments and contingencies (Note 11)
Stockholders’ equity
Common stock, $0.01 par value; authorized, 200.0 million shares; issued, 49.7 million shares as of September 30, 2024 and 49.3 million shares as of December 31, 2023, respectively.	1	1
Additional paid-in capital	2,124	2,169
Retained earnings	1,003	767
Accumulated other comprehensive loss	(16)	(19)
Total stockholders’ equity	3,112	2,918
Total liabilities and stockholders’ equity	$ 21,736	$ 23,141

SECURITIZATIONS - Narrative (Details)	9 Months Ended
SECURITIZATIONS - Narrative (Details)	Sep. 30, 2024
Minimum
Offsetting Assets [Line Items]
Minimum interests requirement	4.00%
Maximum
Offsetting Assets [Line Items]
Minimum interests requirement	10.00%

BORROWINGS OF LONG-TERM AND OTHER DEBT (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Debt

Long-term and other debt consisted of the following as of the dates presented:


Description	September 30, 2024		December 31, 2023		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	June 2026	(1)



Convertible senior notes due 2028	54		316		June 2028	4.25%
Senior notes due 2026	100		500		January 2026	7.00%
Senior notes due 2029	900		600		March 2029	9.75%
Subtotal	1,054		1,416
Less: Unamortized debt issuance costs	13		22
Total long-term and other debt	$	1,041	$	1,394

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	1,350	$	350	Various – May 2026 to Jul. 2027	4.62% to 5.47%
Conduit asset-backed securities	2,198		3,550		Various – Oct. 2024 to Oct. 2025	(2)
Subtotal	3,548		3,900
Less: Unamortized debt issuance costs	5		2
Total debt issued by consolidated VIEs	$	3,543	$	3,898

Total borrowings of long-term and other debt	$	4,584	$	5,292

______________________________

(1)The interest rate is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin.

Schedule Of Conduit Facilities


(Millions)	December 31, 2023				Commitment		September 30, 2024
Conduit Facilities	Capacity		Drawn (6)		Increase		Capacity		Drawn (6)		Maturity Date
Comenity Bank
WFNMNT 2009-VFN (1)	$	2,650	$	2,015	$	—	$	2,650	$	1,380	October 2025
WFNMT 2009-VFC1 (2)	275		260		—		275		191		October 2024
Comenity Capital Bank
WFCMNT 2009-VFN (3)	2,250		1,025		—		2,250		377		February 2025
CCAST 2023-VFN1 (4)	250		250		—		250		250		September 2025
CCAST 2024-VFN1 (5)	—		—		200		200		—		February 2025
Total	$	5,425	$	3,550	$	200	$	5,625	$	2,198

__________________________________

(1)2009-VFN Conduit issued under World Financial Network Credit Card Master Note Trust (WFNMNT).

(2)2009-VFC1 Conduit issued under World Financial Network Credit Card Master Trust III (WFNMT).

(3)2009-VFN Conduit issued under World Financial Capital Master Note Trust (WFCMNT).

(4)2023-VFN1 Conduit issued under Comenity Capital Asset Securitization Trust (CCAST).

(5)2024-VFN1 Conduit issued under CCAST.

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value of Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Financial assets
Credit card and other loans, net	$ 18,050	$ 19,802
Investment securities	230	217
Financial liabilities
Deposits	12,875	13,583
Debt issued by consolidated VIEs	3,571	3,900
Carrying Amount
Financial assets
Credit card and other loans, net	15,743	17,005
Investment securities	230	217
Financial liabilities
Deposits	12,847	13,620
Debt issued by consolidated VIEs	3,543	3,898
Long-term and other debt	1,041	1,394
Fair Value
Financial assets
Credit card and other loans, net	18,050	19,802
Investment securities	230	217
Financial liabilities
Deposits	12,875	13,583
Debt issued by consolidated VIEs	3,571	3,900
Long-term and other debt	$ 1,130	$ 1,457

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic And Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	3	$	173	$	272	$	693
Loss from discontinued operations, net of income taxes (1)	(1)		(2)		(2)		(18)
Net income	$	2	$	171	$	270	$	675

Denominator
Weighted average common stock outstanding – basic	49.7		49.9		49.6		50.0
Weighted average effect of dilutive securities
Add: net effect of dilutive unvested restricted stock awards (2)	1.0		0.2		0.5		0.2
Add: dilutive effect of Convertible Notes (3)(4)	0.3		—		0.2		—
Weighted average common stock outstanding – diluted	51.0		50.1		50.3		50.2

Basic EPS
Income from continuing operations	$	0.06	$	3.47	$	5.48	$	13.85
Loss from discontinued operations	$	(0.01)	$	(0.03)	$	(0.04)	$	(0.37)
Net income per share	$	0.05	$	3.44	$	5.44	$	13.48

Diluted EPS
Income from continuing operations	$	0.06	$	3.46	$	5.40	$	13.80
Loss from discontinued operations	$	(0.01)	$	(0.04)	$	(0.03)	$	(0.36)
Net income per share	$	0.05	$	3.42	$	5.37	$	13.44

__________________________________

(1)Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former

LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” to the unaudited Consolidated Financial Statements.

(2)As the effect would have been anti-dilutive, for the three months ended September 30, 2024 and 2023, nil and approximately 0.5 million, respectively, and for the nine months ended September 30, 2024, and 2023 approximately 0.7 million and 1.2 million, respectively, restricted stock awards were excluded from each calculation of weighted average dilutive common shares.

(3)Holders of the Convertible Notes may convert their notes under certain conditions until March 15, 2028, and on or after such date without condition. Upon any such conversion, we will repay the aggregate principal amount of the Convertible Notes in cash, and pay or deliver, as the case may be, cash, shares of our common stock or a combination of both (at our election), in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes. At our option, we may redeem for cash, all or a portion of the Convertible Notes on or after June 21, 2026, and before the 51st scheduled trading day before the maturity date, but only if the closing price of our common stock reaches specified targets as defined in the indenture governing the Convertible Notes. We may also, from time to time, retire or purchase all or a portion of the outstanding Convertible Notes through cash purchases or exchanges for other securities, in open market purchases, tender offers, privately negotiated transactions or otherwise.

The conversion feature of the Convertible Notes has a dilutive impact on EPS when the average market price of our common stock for the period exceeds the conversion price of $38.43 per share. For the three months ended September 30, 2024 the average market price exceeded the conversion price and the dilutive effect is therefore included in the table above. With the three months ended June 30, 2024 being the first period in which the average market price of our common stock exceeded the conversion price, a weighted average of the quarterly results from the Dilutive effect of Convertible Notes is computed, and has been reflected in the table above for the nine months ended September 30, 2024.

(4)In connection with the issuance of the Convertible Notes, we entered into privately negotiated Capped Calls with certain financial institution counterparties. These transactions are expected generally to reduce potential dilution to our common stock upon any conversion of Convertible Notes and/or offset certain cash payments we may be required to make in excess of the principal amount of the Convertible Notes upon conversion, redemption or repurchase thereof, with such reduction and/or offset subject to a cap of $61.48 per share. Diluted weighted average common stock does not include the impact of the Capped Calls we entered into concurrently with the issuance of the Convertible Notes, as the effect would have been anti-dilutive. If shares were delivered to us under the Capped Calls, those shares would offset, up to the cap, the dilutive effect of the shares that we would issue upon conversion of the Convertible Notes.

STOCKHOLDERS' EQUITY - Stock Repurchase Programs (Details) - USD ($) shares in Millions		3 Months Ended		9 Months Ended
	Feb. 21, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Equity [Abstract]
Authorized repurchase amount	$ 30,000,000
Diluted (in shares)	50.0	51.0	50.1	50.3	50.2
Number of shares repurchased (in shares)				0.3
Total cost of shares repurchased			$ 35,000,000	$ 11,000,000	$ 35,000,000
Remaining authorized repurchase amount		$ 19,000,000		$ 19,000,000

EARNINGS PER SHARE (Details)
$ / shares in Units, shares in Millions, $ in Millions

3 Months Ended

9 Months Ended

Feb. 21, 2024

Sep. 30, 2024

USD ($)

trading_day

$ / shares

Sep. 30, 2023

USD ($)

$ / shares

Sep. 30, 2024

USD ($)

trading_day

$ / shares

Sep. 30, 2023

USD ($)

$ / shares

Numerator

Income from continuing operations | $

$ 3

$ 173

$ 272

$ 693

Loss from discontinued operations, net of income taxes | $

^[1]

(1)

(2)

(18)

Net income | $

$ 2

$ 171

$ 270

$ 675

Denominator

Weighted average common stock outstanding - basic (in shares) | shares

49.7

49.9

49.6

50.0

Add: net effect of dilutive unvested restricted stock awards (in shares) | shares

1.0

0.2

0.5

0.2

Add: dilutive effect of Convertible Notes (in shares) | shares

0.3

0.0

0.2

0.0

Weighted average common stock outstanding – diluted (in shares) | shares

50.0

51.0

50.1

50.3

50.2

Basic EPS

Income from continuing operations (in dollars per share)

$ 0.06

$ 3.47

$ 5.48

$ 13.85

Loss from discontinued operations (in dollars per share)

(0.01)

(0.03)

(0.04)

(0.37)

Net income per share (in dollars per share)

0.05

3.44

5.44

13.48

Diluted EPS

Income from continuing operations (in dollars per share)

0.06

3.46

5.40

13.80

Loss from discontinued operations (in dollars per share)

(0.01)

(0.04)

(0.03)

(0.36)

Net income per share (in dollars per share)

$ 0.05

$ 3.42

$ 5.37

$ 13.44

Share awards excluded in the computation of diluted earnings per share (in shares) | shares

0.0

0.5

0.7

1.2

Convertible Debt

Diluted EPS

Conversion price (in dollars per share)

$ 38.43

Convertible Debt | 4.25% Convertible Senior Notes Due 2028

Diluted EPS

Threshold for redemption, days prior to maturity | trading_day

Convertible Debt | Capped Call Transaction

Diluted EPS

Cap price (in dollars per share)

$ 61.48

[1]

(1)Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” to the unaudited Consolidated Financial Statements.

INVESTMENTS - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
INVESTMENTS - Narrative (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Debt Securities, Available-for-Sale [Line Items]
AFS Allowance for credit losses	$ 0		$ 0		$ 0
Gains or losses from the sale of AFS securities	0	$ 0	0	$ 0
Collateralized Mortgage-Backed Securities
Debt Securities, Available-for-Sale [Line Items]
Available-for-sale, mortgage-backed securities with no stated maturities, amortized cost	171,000,000		171,000,000
Available-for-sale, mortgage-backed securities with no stated maturities, fair value	156,000,000		156,000,000
Municipal Bonds
Debt Securities, Available-for-Sale [Line Items]
Available-for-sale, mortgage-backed securities with stated maturities after ten years, amortized cost	28,000,000		28,000,000
Available-for-sale, mortgage-backed securities with stated maturities after ten years, fair value	$ 26,000,000		$ 26,000,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-2

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 3
-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

+ Details

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Oct. 25, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-15749
Entity Registrant Name	BREAD FINANCIAL HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	31-1429215
Entity Address, Address Line One	3095 Loyalty Circle
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43219
City Area Code	614
Local Phone Number	729-4000
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	BFH
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		49,715,062
Entity Central Index Key	0001101215
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--12-31

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

9 Months Ended

Sep. 30, 2024

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in each component of Accumulated other comprehensive loss, net of tax effects, are as follows for the periods presented:


Three Months Ended September 30, 2024	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of June 30, 2024	$	(19)	$	(3)	$	(22)
Changes in other comprehensive income	6		—		6
Balance as of September 30, 2024	$	(13)	$	(3)	$	(16)


Three Months Ended September 30, 2023	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of June 30, 2023	$	(17)	$	(3)	$	(20)
Changes in other comprehensive loss	(7)		—		(7)
Balance as of September 30, 2023	$	(24)	$	(3)	$	(27)


Nine Months Ended September 30, 2024	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2023	$	(16)	$	(3)	$	(19)
Changes in other comprehensive income	3		—		3
Balance as of September 30, 2024	$	(13)	$	(3)	$	(16)


Nine Months Ended September 30, 2023	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2022	$	(18)	$	(3)	$	(21)
Changes in other comprehensive loss	(6)		—		(6)
Balance as of September 30, 2023	$	(24)	$	(3)	$	(27)

STOCKHOLDERS' EQUITY - Stock Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 13	$ 10	$ 41	$ 32
Service-based restricted stock unit awards
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted (in shares)			1,305,297
Weighted average grant-date fair value (in dollars per share)	$ 37.77		$ 37.77
Award vesting period			3 years
Performance-based restricted stock unit awards
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted (in shares)			221,358
Weighted average grant-date fair value (in dollars per share)	$ 37.57		$ 37.57
Performance-based restricted stock unit awards \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Percentage of stock units to vest			0.00%
Performance-based restricted stock unit awards \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Percentage of stock units to vest			150.00%

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

9 Months Ended

Sep. 30, 2024

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

The following table provides the components of Other non-interest income for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Payment protection products	$	30	$	32	$	91	$	99
Loss from equity method investment	—		—		—		(5)
Other	7		1		8		2
Total other non-interest income	$	37	$	33	$	99	$	96

The following table provides the components of Other non-interest expenses for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Repurchased Convertible Notes	$	96	$	—	$	96	$	—
Professional services and regulatory fees	25		29		85		101
Occupancy expense	5		5		17		16
Other (1)	10		22		44		44
Total other non-interest expenses	$	136	$	56	$	242	$	161

__________________________________

(1)Primarily related to costs associated with various other individually insignificant operating activities.

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Basic earnings (losses) per share (EPS) is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of unvested restricted stock awards, or other dilutive securities. Diluted EPS is based on (i) the weighted average number of common and potentially dilutive common shares (unvested restricted stock awards outstanding during the year), pursuant to the Treasury Stock method, and (ii) the potential conversion of the Convertible Notes, pursuant to the If-converted method.

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	3	$	173	$	272	$	693
Loss from discontinued operations, net of income taxes (1)	(1)		(2)		(2)		(18)
Net income	$	2	$	171	$	270	$	675

Denominator
Weighted average common stock outstanding – basic	49.7		49.9		49.6		50.0
Weighted average effect of dilutive securities
Add: net effect of dilutive unvested restricted stock awards (2)	1.0		0.2		0.5		0.2
Add: dilutive effect of Convertible Notes (3)(4)	0.3		—		0.2		—
Weighted average common stock outstanding – diluted	51.0		50.1		50.3		50.2

Basic EPS
Income from continuing operations	$	0.06	$	3.47	$	5.48	$	13.85
Loss from discontinued operations	$	(0.01)	$	(0.03)	$	(0.04)	$	(0.37)
Net income per share	$	0.05	$	3.44	$	5.44	$	13.48

Diluted EPS
Income from continuing operations	$	0.06	$	3.46	$	5.40	$	13.80
Loss from discontinued operations	$	(0.01)	$	(0.04)	$	(0.03)	$	(0.36)
Net income per share	$	0.05	$	3.42	$	5.37	$	13.44

__________________________________

(1)Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former

DEPOSITS - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Other Liabilities [Abstract]
Time deposits, at or above FDIC insurance limit	$ 543	$ 509
Time deposits, at or above FDIC insurance limit of total deposits	4.00%	4.00%

REGULATORY MATTERS AND CAPITAL ADEQUACY (Details) $ in Millions	Sep. 30, 2024 USD ($)
Banking Regulation, Risk-Based Information [Abstract]
Total risk-weighted assets	$ 19,010
Combined Banks
Common Equity Tier 1 capital to risk-weighted assets
Common equity tier 1 capital ratio	0.133
Tier 1 capital ratio, Minimum Ratio for Capital Adequacy Purposes	4.50%
Total risk-based capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	6.50%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital ratio, Actual Ratio	0.133
Tier 1 capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.060
Tier 1 capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.080
Total risk-based capital ratio, Actual Ratio	0.146
Total risk-based capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.080
Total risk-based capital ratio, Minimum Ratio to be Well Capitalized under prompt Corrective Action Provisions	0.100
Tier 1 leverage capital ratio, Actual Ratio	0.117
Tier 1 leverage capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.040
Tier 1 leverage capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050
Comenity Bank
Common Equity Tier 1 capital to risk-weighted assets
Common equity tier 1 capital ratio	0.174
Tier 1 capital ratio, Minimum Ratio for Capital Adequacy Purposes	4.50%
Total risk-based capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	6.50%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital ratio, Actual Ratio	0.174
Tier 1 capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.060
Tier 1 capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.080
Total risk-based capital ratio, Actual Ratio	0.188
Total risk-based capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.080
Total risk-based capital ratio, Minimum Ratio to be Well Capitalized under prompt Corrective Action Provisions	0.100
Tier 1 leverage capital ratio, Actual Ratio	0.152
Tier 1 leverage capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.040
Tier 1 leverage capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050
Comenity Capital Bank
Common Equity Tier 1 capital to risk-weighted assets
Common equity tier 1 capital ratio	0.160
Tier 1 capital ratio, Minimum Ratio for Capital Adequacy Purposes	4.50%
Total risk-based capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	6.50%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital ratio, Actual Ratio	0.160
Tier 1 capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.060
Tier 1 capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.080
Total risk-based capital ratio, Actual Ratio	0.174
Total risk-based capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.080
Total risk-based capital ratio, Minimum Ratio to be Well Capitalized under prompt Corrective Action Provisions	0.100
Tier 1 leverage capital ratio, Actual Ratio	0.144
Tier 1 leverage capital ratio, Minimum Ratio for Capital Adequacy Purposes	0.040
Tier 1 leverage capital ratio, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]
Common Stock dividends and dividend equivalent rights declared (in dollars per share)	$ 0.21	$ 0.21	$ 0.63	$ 0.63

INVESTMENTS - Investments (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Available-for-sale debt securities	$ 182	$ 171
Equity securities	48	46
Total investment securities	230	217
Equity method and other investments	47	36
Total Investments	$ 277	$ 253

- Definition

Amount of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

+ Details

- Definition

Amount of investment in equity security measured at fair value with change in fair value recognized in net income (FV-NI).

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480078/944-80-55-9

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03(a)(1)(b))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478777/944-210-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(2))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482736/825-10-45-1A

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03(a)(1)(6))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478777/944-210-S99-1

+ Details

BORROWINGS OF LONG-TERM AND OTHER DEBT - Schedule of Long Term Debt and Other Debt (Details) - USD ($) $ in Millions	Sep. 30, 2024	Jan. 31, 2024	Dec. 31, 2023
Long-term and other debt:
Total long-term and other debt	$ 1,041		$ 1,394
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	700		1,200
Total debt issued by consolidated VIEs	3,543		3,898
Total borrowings of long-term and other debt	4,584		5,292
Long-term and other debt
Long-term and other debt:
Long-term and other debt	1,054		1,416
Less: Unamortized debt issuance costs	13		22
Total long-term and other debt	1,041		1,394
Convertible Debt
Long-term and other debt:
Long-term and other debt	$ 54		316
Debt issued by consolidated VIEs:
Interest Rates	4.25%
Senior notes due 2026 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 100		500
Debt issued by consolidated VIEs:
Interest Rates	7.00%	7.00%
Senior notes due 2029 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 900		600
Debt issued by consolidated VIEs:
Interest Rates	9.75%	9.75%
Debt issued by consolidated VIEs
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 3,548		3,900
Less: Unamortized debt issuance costs	5		2
Total debt issued by consolidated VIEs	3,543		3,898
Fixed rate asset-backed term note securities
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 1,350		350
Fixed rate asset-backed term note securities \| Minimum
Debt issued by consolidated VIEs:
Interest Rates	4.62%
Fixed rate asset-backed term note securities \| Maximum
Debt issued by consolidated VIEs:
Interest Rates	5.47%
Conduit asset-backed securities
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 2,198		$ 3,550
Weighted average interest rate	5.97%		6.48%
Conduit asset-backed securities \| Minimum
Debt issued by consolidated VIEs:
Interest Rates	5.94%		6.36%
Conduit asset-backed securities \| Maximum
Debt issued by consolidated VIEs:
Interest Rates	6.13%		6.59%
Revolving Credit Facility \| Revolving line of credit \| Line of Credit
Long-term and other debt:
Long-term and other debt	$ 0		$ 0

ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) - USD ($)	Sep. 30, 2024	Jun. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Payments allocated to future purchase activity	$ 0
Allowance for credit loss	$ 2,190,000,000	$ 2,164,000,000	$ 2,328,000,000	$ 2,207,000,000	$ 2,207,000,000	$ 2,464,000,000
Portfolio reserve rates	12.20%		12.00%
BNPL
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 31,000,000		$ 32,000,000

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

9 Months Ended

Sep. 30, 2024

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of Changes In Each Component of Accumulated Comprehensive Loss Net of Tax Effects

The changes in each component of Accumulated other comprehensive loss, net of tax effects, are as follows for the periods presented:


Three Months Ended September 30, 2024	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of June 30, 2024	$	(19)	$	(3)	$	(22)
Changes in other comprehensive income	6		—		6
Balance as of September 30, 2024	$	(13)	$	(3)	$	(16)


Three Months Ended September 30, 2023	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of June 30, 2023	$	(17)	$	(3)	$	(20)
Changes in other comprehensive loss	(7)		—		(7)
Balance as of September 30, 2023	$	(24)	$	(3)	$	(27)


Nine Months Ended September 30, 2024	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2023	$	(16)	$	(3)	$	(19)
Changes in other comprehensive income	3		—		3
Balance as of September 30, 2024	$	(13)	$	(3)	$	(16)


Nine Months Ended September 30, 2023	Net Unrealized Losses on AFS Securities		Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2022	$	(18)	$	(3)	$	(21)
Changes in other comprehensive loss	(6)		—		(6)
Balance as of September 30, 2023	$	(24)	$	(3)	$	(27)

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES (Tables)

9 Months Ended

Sep. 30, 2024

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

Schedule of Components of Other Non-interest Income

The following table provides the components of Other non-interest income for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Payment protection products	$	30	$	32	$	91	$	99
Loss from equity method investment	—		—		—		(5)
Other	7		1		8		2
Total other non-interest income	$	37	$	33	$	99	$	96

Schedule of Components of Other Non-interest Expenses

The following table provides the components of Other non-interest expenses for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Repurchased Convertible Notes	$	96	$	—	$	96	$	—
Professional services and regulatory fees	25		29		85		101
Occupancy expense	5		5		17		16
Other (1)	10		22		44		44
Total other non-interest expenses	$	136	$	56	$	242	$	161

__________________________________

(1)Primarily related to costs associated with various other individually insignificant operating activities.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Millions, $ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2024

Sep. 30, 2023

Sep. 30, 2024

Sep. 30, 2023

Interest income

Interest and fees on loans

$ 1,224

$ 1,256

$ 3,645

$ 3,697

Interest on cash and investment securities

161

135

Total interest income

1,277

1,301

3,806

3,832

Interest expense

Interest on deposits

153

143

461

387

Interest on borrowings

268

254

Total interest expense

240

219

729

641

Net interest income

1,037

1,082

3,077

3,191

Non-interest income

Interchange revenue, net of retailer share arrangements

(95)

(84)

(272)

(244)

Gain on portfolio sale

230

Other

Total non-interest income

(54)

(51)

(164)

Total net interest and non-interest income

983

1,031

2,913

3,273

Provision for credit losses

369

304

980

747

Total net interest and non-interest income, after provision for credit losses

614

727

1,933

2,526

Non-interest expenses

Employee compensation and benefits

228

210

655

647

Card and processing expenses

104

241

339

Information processing and communication

220

222

Marketing expenses

115

Depreciation and amortization

Other

136

242

161

Total non-interest expenses

574

502

1,525

1,576

Income from continuing operations before income taxes

225

408

950

Provision for income taxes

136

257

Income from continuing operations

173

272

693

Loss from discontinued operations, net of income taxes

^[1]

(1)

(2)

(18)

Net income

$ 2

$ 171

$ 270

$ 675

Basic income per share (Note 15)

Income from continuing operations (in dollars per share)

$ 0.06

$ 3.47

$ 5.48

$ 13.85

Loss from discontinued operations (in dollars per share)

(0.01)

(0.03)

(0.04)

(0.37)

Net income per share (in dollars per share)

0.05

3.44

5.44

13.48

Diluted income per share (Note 15)

Income from continuing operations (in dollars per share)

0.06

3.46

5.40

13.80

Loss from discontinued operations (in dollars per share)

(0.01)

(0.04)

(0.03)

(0.36)

Net income per share (in dollars per share)

$ 0.05

$ 3.42

$ 5.37

$ 13.44

Weighted average common shares outstanding (Note 15)

Basic (in shares)

49.7

49.9

49.6

50.0

Diluted (in shares)

51.0

50.1

50.3

50.2

[1]

CREDIT CARD AND OTHER LOANS - Aging Analysis (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 293	$ 269
Total
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	58	55
31 to 60 Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	20	17
61 to 90 Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	18	16
91 or more Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	20	22
Total Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 235	$ 214

CREDIT CARD AND OTHER LOANS - Financing Receivable (Details) - USD ($) $ in Millions	Sep. 30, 2024	Jun. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	$ 17,933		$ 19,333
Less: Allowance for credit losses	(2,190)	$ (2,164)	(2,328)	$ (2,207)	$ (2,207)	$ (2,464)
Credit card and other loans, net	15,743		17,005
Unbilled to cardholders	383		371
Variable Interest Entity, Primary Beneficiary
Financing Receivable, Allowance for Credit Loss [Line Items]
Credit card and other loans available to settle obligations of consolidated variable interest entities	11,644		12,844
Credit card loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	17,630		18,999
BNPL and other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	303		334
Less: Allowance for credit losses	$ (31)		$ (32)

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

REGULATORY MATTERS AND CAPITAL ADEQUACY - Narrative (Details) $ in Millions	Aug. 22, 2024 USD ($)
Comenity Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Agreement with FDIC to pay penalty	$ 1
Comenity Capital Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Agreement with FDIC to pay penalty	$ 1

ALLOWANCE FOR CREDIT LOSSES - Rollforward (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 2,164,000,000	$ 2,207,000,000	$ 2,328,000,000	$ 2,464,000,000
Provision for credit losses	369,000,000	304,000,000	980,000,000	747,000,000
Change in the estimate for uncollectible unpaid interest and fees	5,000,000	0	5,000,000	5,000,000
Net principal losses	(348,000,000)	(304,000,000)	(1,123,000,000)	(1,009,000,000)
Ending balance	2,190,000,000	2,207,000,000	2,190,000,000	2,207,000,000
Recovery	$ 85,000,000	$ 69,000,000	286,000,000	242,000,000
Adjustment related to the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency				$ 10,000,000
Recovery adjustment			$ 0

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

INVESTMENTS

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

Investments include investment securities and various other investments primarily held by the Banks for Community Reinvestment Act (CRA) purposes. Investment securities consist of available-for-sale (AFS) debt securities, which are mortgage-backed securities and municipal bonds, and equity securities, which are mutual funds. Investment securities are carried at fair value on the Consolidated Balance Sheets. We also have other investments, which primarily include a portfolio of investments in certain limited partnerships and limited liability companies accounted for under the equity method, and therefore are recorded at cost and adjusted each period for our share of the investee’s earnings or losses, less any impairment. Other investments also include an insignificant tax credit investment where we elected to apply the proportional amortization method of accounting, for which the impacts of both the amortization of the investment and income tax benefits are fully recognized in the Provision for income taxes.

The following table provides a summary of our Investments as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Investment securities:
Available-for-sale debt securities	$	182	$	171
Equity securities	48		46
Total investment securities	230		217
Equity method and other investments	47		36
Total Investments	$	277	$	253

For AFS debt securities in an unrealized loss position, any estimated credit losses are recognized in the Consolidated Statements of Income by establishing or adjusting an existing Allowance for credit losses for such losses. We typically invest in highly-rated securities with low probabilities of default; therefore, we did not have an Allowance for credit losses as of September 30, 2024 and December 31, 2023, and did not recognize any credit losses for the periods presented. Any unrealized gains, or any portion of an AFS debt security’s non-credit-related unrealized losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. Realized gains and losses are recorded in Other non-interest expenses in the Consolidated Statements of Income upon disposition of the AFS debt security, using the specific identification method. Gains and losses on investments in equity securities and CRA-related equity method investments are recorded in Other non-interest expenses in the Consolidated Statements of Income.

The table below reflects unrealized gains and losses on AFS debt securities as of the dates presented:


	September 30, 2024								December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale securities	$	199	$	—	$	(17)	$	182	$	192	$	—	$	(21)	$	171
Total	$	199	$	—	$	(17)	$	182	$	192	$	—	$	(21)	$	171


	September 30, 2024
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	9	$	—	$	150	$	(17)	$	159	$	(17)
Total	$	9	$	—	$	150	$	(17)	$	159	$	(17)


	December 31, 2023
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	23	$	—	$	141	$	(21)	$	164	$	(21)
Total	$	23	$	—	$	141	$	(21)	$	164	$	(21)

As of September 30, 2024, our AFS debt securities included mortgage-backed securities, which do not have a single maturity date, with an amortized cost and estimated fair value of $171 million and $156 million, respectively, and municipal bonds, all of which have a maturity date greater than ten years, with an amortized cost and estimated fair value of $28 million and $26 million, respectively.

There were no realized gains or losses from the sale of any investment securities for the three and nine months ended September 30, 2024 and 2023.

INVESTMENTS - Continuous Loss Position (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Less than 12 months, Fair Value	$ 9	$ 23
Less than 12 months, Unrealized Losses	0	0
12 Months or Greater, Fair Value	150	141
12 Months or Greater, Unrealized Losses	(17)	(21)
Fair Value	159	164
Unrealized Losses	$ (17)	$ (21)

BORROWINGS OF LONG-TERM AND OTHER DEBT - Narrative (Details)		1 Months Ended				2 Months Ended
	Oct. 01, 2024 trading_day d	Sep. 30, 2024 USD ($)	Aug. 31, 2024 USD ($)	Jan. 31, 2024 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	May 31, 2024 USD ($)	Dec. 22, 2023 USD ($)
Debt Instrument [Line Items]
Debt instrument, inducement expense		$ 96,000,000				$ 96,000,000
Additional paid-in capital related to the induced conversion premium						67,000,000
Embedded derivative, loss on embedded derivative		49,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 700,000,000
Remaining borrowing capacity		700,000,000				700,000,000
Convertible Debt
Debt Instrument [Line Items]
Remaining borrowing capacity		$ 54,000,000				$ 54,000,000
Stated interest rate		4.25%				4.25%
Debt amount issued		$ 25,000,000	$ 238,000,000			$ 25,000,000
Repurchase amount		38,000,000	374,000,000			$ 38,000,000
Additional paid-in capital related to the induced conversion premium		7,000,000	60,000,000
Convertible Debt \| Subsequent Event
Debt Instrument [Line Items]
Threshold percentage of stock price trigger	130.00%
Threshold trading days \| trading_day	20
Threshold consecutive trading days \| d	30
Convertible Debt \| Other Non-interest Expense
Debt Instrument [Line Items]
Debt instrument, inducement expense		$ 9,000,000	87,000,000
4.250% Convertible Senior Notes Due 2028 \| Convertible Debt
Debt Instrument [Line Items]
Stated interest rate					4.25%
Debt amount issued					$ 316,000,000
Conversion ratio					0.0260247
Senior notes due 2029
Debt Instrument [Line Items]
Repurchase amount				$ 400,000,000
Repurchase amount, cash				$ 100,000,000
Senior notes due 2029 \| Senior Notes
Debt Instrument [Line Items]
Stated interest rate		9.75%		9.75%		9.75%
Debt amount issued				$ 300,000,000				$ 600,000,000
Redemption price				101.00%
Senior notes due 2026 \| Senior Notes
Debt Instrument [Line Items]
Stated interest rate		7.00%		7.00%		7.00%
Series 2024-A Asset-Backed Term Notes
Debt Instrument [Line Items]
Debt amount issued							$ 570,000,000
Series 2024-A Asset-Backed Term Notes - Class A
Debt Instrument [Line Items]
Stated interest rate							5.47%
Debt amount issued							$ 500,000,000
Series 2024-A Asset-Backed Term Notes - Class M
Debt Instrument [Line Items]
Debt amount issued							44,000,000
Series 2024-A Asset-Backed Term Notes - Class B
Debt Instrument [Line Items]
Debt amount issued							$ 26,000,000
Series 2023-B Asset-Backed Term Notes
Debt Instrument [Line Items]
Debt amount issued			$ 500,000,000
Series 2024-B Asset-Backed Term Notes - Class A
Debt Instrument [Line Items]
Stated interest rate			4.62%
Debt amount issued			$ 500,000,000

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

BASIS OF PRESENTATION

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS


Accounting Standards Recently Adopted
Standard	Guidance	Timing and Financial Statement Impact
Investments - Equity Method and Joint Ventures: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Issued March 2023	Expands the election to apply the proportional amortization method of accounting to tax credit investments beyond low-income-housing tax credit investments, when certain conditions are met.	Adopted under the modified retrospective method on January 1, 2024, which resulted in an insignificant decrease to retained earnings. Adoption did not have a significant impact on our results of operations, financial position, regulatory risk-based capital, or on our operational processes, controls and governance in support of the new guidance.
Accounting Standards Recently Issued but Not Yet Adopted
Standard	Guidance	Timing and Financial Statement Impact
Segment Reporting: Improvements to Reportable Segment Disclosures Issued November 2023	Requires interim and annual disclosure of significant segment expense categories and amounts that are regularly provided to the chief operating decision maker, as well as disclosure of the aggregate amount and description of other segment items beyond significant segment expenses.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2024, and effective for interim reporting periods beginning in 2025. Early adoption is permitted, although we do not plan to early adopt. Adoption will result in expanded disclosures for our single reportable segment but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Income Taxes: Improvements to Income Tax Disclosures Issued December 2023	Requires greater disaggregation of rate reconciliation and income taxes paid information, as well as other changes intended to enhance the transparency and decision-usefulness of income tax disclosures.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2025. Early adoption is permitted, although we do not plan to early adopt. Adoption will require enhancements to our income tax disclosures but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

CREDIT CARD AND OTHER LOANS

Our payment and lending solutions result in the origination of Credit card and other loans, which are recorded at the time a borrower enters into a point-of-sale transaction with a merchant. Credit card loans represent revolving lines of credit and have a range of terms that include credit limits, interest rates and fees, which can be revised over time based on new information about the cardholder, in accordance with applicable regulations and the governing terms and conditions. Cardholders choosing to make a payment of less than the full balance due, instead of paying in full, are subject to finance charges and are required to make monthly payments based on pre-established amounts. Other loans, which consist primarily of BNPL products such as installment loans and our “split-pay” offerings, have a range of fixed terms such as interest rates, fees and repayment periods, and borrowers are required to make pre-established monthly payments over the term of the loan in accordance with the applicable terms and conditions. Credit card and other loans include principal and any related accrued interest and fees and are presented on the Consolidated Balance Sheets net of the Allowance for credit losses. We continue to accrue interest and fee income on all accounts, except in limited circumstances, until the related balance and all related interest and fees are paid or charged-off.

We generally classify our Credit card and other loans as held for investment. We sell a majority of our credit card loans originated by Comenity Bank (CB) and by Comenity Capital Bank (CCB), which together are referred to herein as the “Banks”, to certain of our master trusts (the Trusts), which are consolidated VIEs, and therefore these loans are restricted for securitization investors. All new originations of Credit card and other loans are determined to be held for investment at origination because we have the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, we consider the average life and homogenous nature of our Credit card and other loans. In assessing whether our Credit card and other loans continue to be held for investment, we also consider capital levels and scheduled maturities of funding instruments used. The assertion regarding the intent and ability to hold Credit card and other loans for the foreseeable future can be made with a high degree of certainty given the maturity distribution of our direct-to-consumer (DTC or retail) deposits and other funding instruments; the demonstrated ability to replace maturing time-based deposits and other borrowings with new deposits or borrowings; and historic payment activity on Credit card and other loans. Due to the homogenous nature of our credit card loans, amounts are classified as held for investment on a brand partner portfolio basis. From time to time certain credit card loans are classified as held for sale, as determined on a brand partner portfolio basis. We carry held for sale loans at the lower of aggregate cost or fair value and continue to recognize finance charges on an accrual basis. Cash flows associated with Credit card and other loans originated or purchased for investment are classified as Cash flows from investing activities, regardless of any subsequent change in intent and ability.

ALLOWANCE FOR CREDIT LOSSES

Credit Card Loans

We use a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. We have evaluated multiple risk characteristics across our credit card loans portfolio, and determined delinquency status and overall credit quality to be the most significant characteristics for estimating expected credit losses. To estimate our Allowance for credit losses, we segment our credit card loans on the basis of delinquency status, credit quality risk score and product. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. In determining the estimated life of our credit card loans, payments were applied to the measurement date balance with no payments allocated to future purchase activity. We use a combination of First In First Out and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) methodologies to model balance paydown.

SECURITIZATIONS

INVESTMENT SECURITIES

- Definition

Disclosure of accounting policy for financing receivable.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 310
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481569/310-20-50-4

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+ Details

- Definition

Disclosure of accounting policy for investment in financial asset.

+ References + Details

CREDIT CARD AND OTHER LOANS - Amortized Cost Basis Credit Card and Loan Receivables (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 17,527	$ 18,927
Unbilled to cardholders	383	371
Total
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	1,428	1,554
31 to 60 Days Past Due
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	379	422
61 to 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	303	323
91 or more Days Past Due
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	746	809
Total Current
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 16,099	$ 17,373

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

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+ Details

CREDIT CARD AND OTHER LOANS - Narrative (Details) $ in Millions	1 Months Ended				3 Months Ended		9 Months Ended
	Aug. 31, 2024 USD ($)	Apr. 30, 2024 USD ($)	Oct. 31, 2023 USD ($)	Feb. 28, 2023 USD ($)	Sep. 30, 2024 USD ($) loan	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) loan	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($) loan
Financing Receivable, Allowance for Credit Loss [Line Items]
Re-aged accounts as percentage of total credit card and loan receivables					2.90%	2.80%	4.30%	2.70%
Number of days a loan is contractually past due before resulting in charge-off							30 days
Delinquency rate					6.40%		6.40%		6.50%
Actual charge-offs for unpaid interest and fees					$ 232	$ 204	$ 773	$ 689
Net principal loss rate					7.80%	6.90%	8.30%	7.30%
Total credit card and other loans					$ 17,527		$ 17,527		$ 18,927
Unused credit card lines available to cardholders					$ 105,000		$ 105,000		$ 113,000
Number of credit card portfolios held for sale \| loan					0		0		0
Proceeds from sale of credit card loan portfolios							$ 100	$ 2,499
Gain on portfolio sale					$ 4	$ 0	$ 9	$ 230
BJs Wholesale Club (BJs)
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans				$ 2,300
Proceeds from sale of credit card loan portfolios				2,500
Gain on portfolio sale				$ 230
Credit card loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Maximum period of time temporary programs' concessions remain in place							12 months
Proceeds from sale of credit card loan portfolios		$ 102
Payments to acquire loans receivable	$ 383		$ 388
Credit card loans \| No Score
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of financing receivable outstanding					0.10%		0.10%		0.10%
BNPL and other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans					$ 292		$ 292		$ 317
BNPL and other loans \| FICO Score, From 660 and Above
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding					0.84		0.84		0.82
BNPL and other loans \| FICO Score Below 660
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding					0.16		0.16		0.18

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 270	$ 675
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	980	747
Depreciation and amortization	68	92
Deferred income taxes	(64)	(35)
Non-cash stock compensation	41	32
Amortization of deferred financing costs	17	20
Amortization of deferred origination costs	72	67
Gain on portfolio sale	(9)	(230)
Loss (gain) on debt extinguishment and repurchased Convertible Notes	105	(3)
Change in other operating assets and liabilities
Change in other assets	34	38
Change in other liabilities	(115)	(56)
Other	(19)	23
Net cash provided by operating activities	1,380	1,370
CASH FLOWS FROM INVESTING ACTIVITIES
Change in credit card and other loans	505	217
Proceeds from sale of credit card loan portfolios	100	2,499
Purchase of credit card loan portfolio	(375)	(81)
Purchases of investments	(29)	(39)
Maturities of investments	10	10
Other, including capital expenditures	(29)	(27)
Net cash provided by investing activities	182	2,579
CASH FLOWS FROM FINANCING ACTIVITIES
Unsecured borrowings under debt agreements	300	801
Repayments/maturities of unsecured borrowings under debt agreements	(821)	(1,299)
Debt issued by consolidated variable interest entities	1,265	1,517
Repayments/maturities of debt issued by consolidated variable interest entities	(1,617)	(4,782)
Net decrease in deposits	(775)	(559)
Payment of deferred financing costs	(8)	(50)
Payment for capped call transactions	0	(39)
Dividends paid	(32)	(32)
Repurchase of common stock	(11)	(35)
Other	(8)	(3)
Net cash used in financing activities	(1,707)	(4,481)
Change in cash, cash equivalents and restricted cash	(145)	(532)
Cash, cash equivalents and restricted cash at beginning of period	3,616	3,927
Cash, cash equivalents and restricted cash at end of period	3,471	3,395
Cash and cash equivalents reconciliation
Cash and cash equivalents	3,451	3,380
Restricted cash included within Other assets	20	15
Total cash, cash equivalents and restricted cash	$ 3,471	$ 3,395

STOCKHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		9 Months Ended
	Oct. 24, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Dividends paid		$ 10		$ 32	$ 32
Dividends declared (in dollars per share)		$ 0.21	$ 0.21	$ 0.63	$ 0.63
Subsequent Event
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Dividends declared (in dollars per share)	$ 0.21

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

FAIR VALUES OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers into or out of Level 3	$ 0	$ 0	$ 0	$ 0
Transfers between Levels 1 and 2	0	0	0	0
Equity method investment, other than temporary impairment	$ 0	$ 0	$ 0
Loyalty Ventures Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity method investment, other than temporary impairment				$ 6,000,000

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 3,170	$ 2,736	$ 2,918	$ 2,265
Changes in other comprehensive income (loss)	6	(7)	3	(6)
Ending balance	3,112	2,864	3,112	2,864
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(22)	(20)	(19)	(21)
Ending balance	(16)	(27)	(16)	(27)
Net Unrealized Losses on AFS Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(19)	(17)	(16)	(18)
Changes in other comprehensive income (loss)	6	(7)	3	(6)
Ending balance	(13)	(24)	(13)	(24)
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(3)	(3)	(3)	(3)
Changes in other comprehensive income (loss)	0	0	0	0
Ending balance	$ (3)	$ (3)	$ (3)	$ (3)

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

INCOME TAXES (Details)	3 Months Ended		9 Months Ended
INCOME TAXES (Details)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Effective tax rate	92.20%	23.00%	33.40%	27.10%

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time we are subject to various lawsuits, claims, disputes, or potential claims or disputes, and other proceedings, arising in the ordinary course of business that we believe, based on our current knowledge, will not have a material adverse effect on our business, consolidated financial condition or liquidity, including claims and lawsuits alleging breaches of our contractual obligations, arbitrations, class actions and other litigation, arising in connection with our business activities. However, in light of the uncertainties involved in such matters, including the fact that some pending legal proceedings are at preliminary stages or seek an indeterminate amount of damages, penalties or fines, it is possible that the outcome of legal proceedings could have a material impact on our results of operations. Certain legal proceedings involving us or our subsidiaries are described further below. On February 20, 2024, we and our general counsel were named as defendants in an adversary proceeding filed by the liquidating trustee in LVI’s Chapter 11 bankruptcy case in the United States Bankruptcy Court for the Southern District of Texas, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 24-03027 (Bankr. S.D. Tex.), alleging actual and constructive fraudulent transfers, among other claims, in connection with our spinoff of LVI. Also on February 20, 2024, the liquidating trustee filed an action in the United States District Court for the District of Delaware against us, each of the members of our Board of Directors at the time of the spinoff, and certain members of our management team, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 24-cv-00226-RGA (D. Del.), alleging certain breaches of fiduciary duties (and aiding and abetting breaches of fiduciary duties) in connection with the spinoff. Subsequently, the liquidating trustee voluntarily dismissed without prejudice the complaint in the District of Delaware and commenced on March 20, 2024 a substantially similar action in Delaware Chancery Court, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 2024-0277-MTZ (Del. Ch.), against the same parties and asserting the same claims. Among other things, in each of the Texas and Delaware actions, the liquidating trustee seeks damages in the amount of approximately $750 million plus interest, fees and expenses. We and certain current and former members of our management team have also been named as defendants in other litigation matters relating to the LVI spinoff. LoyaltyOne, Co. (the LVI subsidiary that operated its Canadian AIR MILES business) filed suit against us and our general counsel in the Ontario Superior Court of Justice in Canada on October 18, 2023, in an action captioned LoyaltyOne, Co. v. Bread Financial Holdings, Inc. et al. The lawsuit asserts that our general counsel, in his capacity as a pre-spinoff director of LoyaltyOne, Co., breached various fiduciary duties owed to LoyaltyOne, Co. in connection with the LVI spinoff and certain other transactions, and that Bread Financial assisted in and benefited from those breaches. The lawsuit seeks damages in the amount of $775 million. LoyaltyOne, Co. is also contesting our entitlement to certain potential tax refunds under the tax matters agreement, in proceedings pursuant to the Canadian Companies’ Creditors Arrangement Act in the Commercial List of the Ontario Superior Court of Justice, captioned In re Matter of a Plan of Compromise or Arrangement of LoyaltyOne, Co., Case No. CV-23-00696017-00CL. Finally, on April 27, 2023, we and certain current and former members of our management team were named as defendants in a putative federal securities class action filed in the United States District Court for the Southern District of Ohio, captioned Newtyn Partners, LP v. Alliance Data Systems n/k/a Bread Financial Holdings, Inc., Case No. 23-cv-1451-EAS (S.D. Ohio), concerning disclosures made about LVI’s business prior to the spinoff. The lead plaintiff in this matter filed an amended complaint on March 21, 2024 and is seeking, among other things, a class action designation and an award of damages in an amount to be proven at trial, plus fees and expenses. In all these actions related to the spinoff, we believe the allegations contained in the complaints are without merit and intend to defend the cases. We cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom. Some matters pending against us specify the damages sought, others seek an unspecified amount of damages or are at very early stages of the legal process. In matters where the amount of damages claimed against us are stated, the claimed amount may be exaggerated and/or unsupported. While some matters have not yet progressed sufficiently through discovery or have had development of important factual information and legal issues to enable us to estimate an amount of loss or a range of possible loss, other matters may have progressed sufficiently to enable an estimate of an amount of loss, or a range of possible loss. We accrue for a loss contingency when it is both probable that a loss has occurred, and the amount of loss can be reasonably estimated; however, there may be instances in which an exposure to a loss contingency exceeds our accrual. On a quarterly basis we evaluate developments in the legal proceedings against us that could cause an increase or decrease in the amount of the accrual that has been previously recorded.

SECURITIZATIONS (Tables)

9 Months Ended

Sep. 30, 2024

Securitizations [Abstract]

Schedule of Securitized Credit Card Loans and Related Delinquencies and Net Principal Losses

The following tables reflect the total securitized credit card loans and related delinquencies, and net principal losses of securitized credit card loans for the periods presented:


	September 30, 2024		December 31, 2023
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	11,644	$	12,844
Of which: principal amount of credit card loans 91 days or more past due	$	306	$	323


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Net principal losses of securitized credit card loans	$	200	$	179	$	637	$	592

UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Investments, fair value	$ 230	$ 217
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	200.0	200.0
Common stock, issued shares (in shares)	49.7	49.3
Variable Interest Entity, Primary Beneficiary
Credit card and other loans available to settle obligations of consolidated variable interest entities	$ 11,644	$ 12,844

CREDIT CARD AND OTHER LOANS

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

CREDIT CARD AND OTHER LOANS

The following table provides Credit card and other loans, as of the dates presented:


	September 30, 2024		December 31, 2023
(Millions)
Credit card loans	$	17,630	$	18,999
BNPL and other loans	303		334
Total credit card and other loans (1)(2)	17,933		19,333
Less: Allowance for credit losses	(2,190)		(2,328)
Credit card and other loans, net	$	15,743	$	17,005

__________________________________

(1)Includes $11.6 billion and $12.8 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of September 30, 2024 and December 31, 2023, respectively.

(2)Includes $383 million and $371 million, of accrued interest and fees that have not yet been billed to cardholders as of September 30, 2024 and December 31, 2023, respectively.

Credit Card and Other Loans Aging

The following table provides the delinquency trends of our Credit card and other loans portfolio, based on the amortized cost, as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
September 30, 2024	$	379	$	303	$	746	$	1,428	$	16,099	$	17,527

December 31, 2023	$	422	$	323	$	809	$	1,554	$	17,373	$	18,927

__________________________________

From time to time we may re-age cardholders’ accounts, with the intent of assisting delinquent cardholders who have experienced financial difficulties but who demonstrate both an ability and willingness to repay the amounts due, this practice affects credit card loan delinquencies and principal losses. Accounts meeting specific defined criteria are re-aged when the cardholder makes one or more consecutive payments aggregating to a certain pre-defined amount of their account balance. Upon re-aging, the outstanding balance of a delinquent account is returned to current status. Our re-aged accounts as a percentage of Total credit card and other loans represented 2.9% and 2.8% for the three months ended September 30, 2024 and 2023, respectively, and 4.3% and 2.7% for the nine months ended September 30, 2024 and 2023, respectively. Our re-aging practices comply with regulatory guidelines.

Credit Quality Indicators for Our Credit Card and Other Loans

Given the nature of our business, the credit quality of our assets, in particular our Credit card and other loans, is a key determinant underlying our ongoing financial performance and overall financial condition. When it comes to our Credit card and other loans portfolio, we closely monitor Delinquency rates and Net principal loss rates, which reflect, among other factors, our underwriting, the inherent credit risk in our portfolio and the success of our collection and recovery efforts. These rates also reflect, more broadly, the general macroeconomic conditions, including the compounding effect of persistent inflation relative to wage growth, and higher interest rates. Our Delinquency and Net principal loss rates are also impacted by the size of our Credit card and other loans portfolio, which serves as the denominator in the calculation of these rates. Accordingly, changes in the size of our portfolio (whether due to credit tightening, acquisitions or dispositions of portfolios or otherwise) may cause movements in our Delinquency and Net principal loss rates that are not necessarily indicative of the underlying credit quality of the overall portfolio.

Delinquencies: An account is contractually delinquent if we do not receive the minimum payment due by the specified due date. Our policy is to continue to accrue interest and fee income on all accounts, except in limited circumstances, until the balance and all related interest and fees are paid or charged-off. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent; based upon the level of risk indicated, a collection strategy is deployed. If after exhausting all in-house collection efforts we are unable to collect on the account, we may engage collection agencies or outside attorneys to continue those efforts, or sell the charged-off balances.

The Delinquency rate is calculated by dividing outstanding principal balances that are contractually delinquent (i.e., balances greater than 30 days past due) as of the end of the period, by the outstanding principal amount of Credit card and other loans as of the same period-end. As of September 30, 2024 and December 31, 2023, our Delinquency rates were 6.4% and 6.5%, respectively.

Net Principal Losses: Our net principal losses include the principal amount of losses that are deemed uncollectible, less recoveries, and exclude charged-off interest, fees and third-party fraud losses (including synthetic fraud). Charged-off interest and fees reduce Interest and fees on loans, while third-party fraud losses are recorded in Card and processing expenses. Credit card loans, including unpaid interest and fees, are generally charged-off in the month during which an account becomes 180 days past due. BNPL loans such as our installment loans and our “split-pay” offerings, including unpaid interest, are generally charged-off when a loan becomes 120 days past due. However, in the case of a customer bankruptcy or death, Credit card and other loans, including unpaid interest and fees, as applicable, are charged-off 60 days after receipt of the notification of the bankruptcy or death, but in any case no later than 180 days past due for credit card loans and 120 days past due for BNPL loans. We record the actual losses for unpaid interest and fees as a reduction to Interest and fees on loans, which were $232 million and $204 million for the three months ended September 30, 2024 and 2023, respectively, and $773 million and $689 million for the nine months ended September 30, 2024 and 2023, respectively.

The net principal loss rate is calculated by dividing net principal losses for the period by the Average credit card and other loans for the same period. Beginning in January 2024, we revised the calculation of Average credit card and other loans to more closely align with industry practice by incorporating an average daily balance. Prior to 2024, Average credit card and other loans represent the average balance of the loans at the beginning and end of each month, averaged over the periods indicated. For the three months ended September 30, 2024 and 2023, our Net principal loss rates were 7.8% and 6.9%, respectively, for the nine months ended September 30, 2024 and 2023, our Net Principal loss rates were 8.3% and 7.3%, respectively.

Overall Credit Quality: As part of our credit risk management activities for our credit card loans portfolio, we assess overall credit quality by reviewing information from credit bureaus and other sources relating to our cardholders’ broader credit performance. We utilize VantageScore (Vantage) credit scores to assist in our assessment of credit quality. Vantage credit scores are obtained at origination of the account and are refreshed monthly thereafter to assist in predicting customer behavior. We categorize these Vantage credit scores into the following three credit score categories: (i) 661 or higher, which are considered the strongest credits and therefore have the lowest credit risk; (ii) 601 to 660, considered to have moderate credit risk; and (iii) 600 or less, which are considered weaker credits and therefore have the highest credit risk. In certain limited circumstances there are customer accounts for which a Vantage score is not available and we use alternative sources to assess credit risk and predict behavior. The table below excludes less than 0.1% of the total credit card loans balance as of September 30, 2024 and December 31, 2023, representing those customer accounts for which a Vantage credit score is not available. The following table reflects the distribution of credit card loans by Vantage score as of the dates presented:


	Vantage
	September 30, 2024						December 31, 2023
	661 or Higher		601 to 660		600 or Lower		661 or Higher		601 to 660		600 or Lower
Credit card loans	57	%	27	%	16	%	57	%	27	%	16	%

As part of our credit risk management activities for our BNPL loans portfolio, we also assess overall credit quality by reviewing information from credit bureaus. We have historically utilized Fair Isaac Corporation (FICO) credit scores to assist in our assessment of the credit quality for our BNPL loans portfolio, but in early 2024 we completed a transition to Vantage scoring. The scoring scale produced by both FICO and Vantage is similar in that scores of 600 or less are considered weaker scores and as per our categorization method would have the highest credit risk. The amortized cost basis of BNPL loans totaled $292 million and $317 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, approximately 84% of these loans were originated with customers with scores of 661 or above, and correspondingly approximately 16% of these loans were originated with customers with scores below 661. Similarly, as of December 31, 2023, approximately 82% and 18% of these loans were originated with customers with scores of 661 or above, and below 661, respectively.

Modified Credit Card Loans

Consumer Relief Programs

As part of our collections strategy, we may offer temporary and short term programs in order to improve the likelihood of collections and meet the needs of our customers. Our modifications, for customers who have requested assistance and meet certain qualifying requirements, come in the form of reduced payment requirements, interest rate reductions and late fee waivers. We do not offer programs involving the forgiveness of principal. These temporary loan modifications may assist in cases where we believe the customer will recover from the short-term hardship and resume scheduled payments. Under these consumer relief programs, those accounts receiving relief may not advance to the next delinquency cycle, including charge-off, in the same time frame that would have occurred had the relief not been granted. We evaluate our consumer relief programs to determine if they represent a more than insignificant delay in payment granted to borrowers experiencing financial difficulty, in which case they would then be considered a Loan Modification. Loans in these short term programs that are determined to be Loan Modifications, will be included as such in the disclosure below.

Credit Card Loans - Modifications for Borrowers Experiencing Financial Difficulty (Loan Modifications)

In instances where cardholders are experiencing financial difficulty, we may modify our credit card loans with the intention of minimizing losses and improving collectability, while providing cardholders with financial relief; such credit card loans are classified as Loan Modifications, exclusive of the temporary, short-term consumer relief programs described above. Loan Modifications include concessions consisting primarily of a reduced minimum payment, late fee waiver, and/or an interest rate reduction. The majority of concessions remain in place for a period no longer than 12 months; however, for certain modifications the concessions remain in place through the payoff of the credit card loans if the cardholder complies with the terms of the program.

Loan Modification concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments, and the cardholder’s ability to make future purchases is either limited, or suspended until the cardholder successfully exits from the modification program. In accordance with the terms of our workout programs, the credit agreement reverts back to its original contractual terms (including the contractual interest rate) when the customer exits the program, which is either when all payments have been made in accordance with the program, or when the customer defaults out of the program.

Loan Modifications are collectively evaluated for impairment on a pooled basis in measuring the appropriate Allowance for credit losses. The following table provides information relating to credit card loans to borrowers experiencing financial difficulty that were granted a concession under a Loan Modification program during the periods presented:


	Three Months Ended September 30, 2024						Three Months Ended September 30, 2023
	Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)		Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)
(Millions, except percentages)
Credit card loans	$	94	0.5	%	21.8	%	$	86	0.5	%	20.2	%


	Nine Months Ended September 30, 2024						Nine Months Ended September 30, 2023
	Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)		Account Balances (1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)
(Millions, except percentages)
Credit card loans	$	238	1.4	%	21.7	%	$	189	1.1	%	20.1	%

__________________________________

Interest income on these impaired credit card loans is accounted for in the same manner as non-impaired credit card loans, and cash collections are allocated according to the same payment hierarchy methodology applied for credit card loans not in Loan Modification programs.


	Aging Analysis of Delinquent Amortized Cost Loan Modifications - Credit Card Loans
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
September 30, 2024	$	20	$	18	$	20	$	58	$	235	$	293

December 31, 2023	$	17	$	16	$	22	$	55	$	214	$	269


	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023
	Number of Modifications	Outstanding Balance		Number of Modifications	Outstanding Balance
(Millions, except for Number of modifications)
Loan Modifications that subsequently defaulted	7,653	$	14	4,047	$	7


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
	Number of Modifications	Outstanding Balance		Number of Modifications	Outstanding Balance
(Millions, except for Number of modifications)
Loan Modifications that subsequently defaulted	16,342	$	29	6,567	$	11

Unfunded Lending Commitments

We manage potential credit risk in unfunded lending commitments by reviewing each potential customer’s credit application and evaluating the applicant’s financial history and ability and perceived willingness to repay. Credit card loans are made primarily on an unsecured basis, and our Cardholders reside throughout the U.S. and are not significantly concentrated in any one geographic area.

We manage our potential risk in credit commitments by limiting the total amount of credit, both by individual customer and across our credit card loan portfolio, by monitoring the size and maturity of our loan portfolio and applying consistent risk-based underwriting standards reflective of current and anticipated macroeconomic conditions. We have the unilateral ability to cancel or reduce unused credit card lines at any time. Unused credit card lines available to cardholders totaled approximately $105 billion and $113 billion as of September 30, 2024 and December 31, 2023, respectively. While this amount represented the total available unused credit card lines, we have not experienced and do not anticipate that all cardholders will access their entire available line at any given point in time.

Portfolio Sales

As of September 30, 2024 and December 31, 2023, there were no credit card loans held for sale.

In late April 2024 we sold a credit card loan portfolio for cash consideration of $102 million. We recognized a gain on sale in April 2024 that was adjusted during the three months ended September 30, 2024 to recognize an incremental amount due under the purchase and sale agreement.

We previously announced the non-renewal of our contract with BJ’s Wholesale Club (BJ’s) and the sale of the BJ’s portfolio, which closed in late February 2023, for a total purchase price of $2.5 billion on a loan portfolio of $2.3 billion, resulting in a $230 million Gain on portfolio sale.

Portfolio Acquisition

In August 2024, we acquired a credit card loan portfolio for cash consideration of approximately $383 million, subject to customary purchase price adjustments.

In October 2023, we acquired a credit card portfolio for cash consideration of $388 million.

FAIR VALUES OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is defined under GAAP as the price that would be required to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; with such a transaction based on the principal market, or in the absence of a principal market the most advantageous market for the specific instrument. GAAP provides for a three-level fair value hierarchy that classifies the inputs to valuation techniques used to measure fair value, defined as follows:

Level 1: Inputs that are unadjusted quoted prices for identical assets or liabilities in active markets that the entity can access.

Level 2: Inputs, other than those included within Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Inputs that are unobservable (e.g., internally derived assumptions) and reflect an entity’s assumptions about estimates market participants would use in pricing the asset or liability based on the best information available under the circumstances. In particular, Level 3 inputs and valuation techniques involve judgment and as a result are not necessarily indicative of amounts we would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts.

We monitor the market conditions and evaluate the fair value hierarchy levels at least quarterly. For the three and nine months ended September 30, 2024 and 2023, there were no transfers into or out of Level 3, and no transfers between Levels 1 and 2.

The following table summarizes the carrying values and fair values of our financial assets and financial liabilities as of the dates presented:


	September 30, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	15,743	$	18,050	$	17,005	$	19,802
Investment securities	230		230		217		217
Financial liabilities
Deposits	12,847		12,875		13,620		13,583
Debt issued by consolidated VIEs	3,543		3,571		3,898		3,900
Long-term and other debt	1,041		1,130		1,394		1,457

Valuation Techniques Used in the Fair Value Measurement of Financial Assets and Financial Liabilities

Credit card and other loans, net: Our Credit card and other loans are recorded at amortized cost, less the Allowance for credit losses, on the Consolidated Balance Sheets. In estimating the fair values, we use a discounted cash flow model (i.e., Level 3 inputs), primarily because a comparable whole loan sales market for similar loans does not exist, and therefore there is a lack of observable pricing inputs. We use various internally derived inputs, including projected income, discount rates and forecasted write-offs. Economic value attributable to future loans generated by the cardholder accounts is not included in the fair values.

Investment securities: Investment securities consist of AFS debt securities, including both mortgage-backed securities and municipal bonds, as well as equity securities, which are mutual funds, and are recorded at fair value on the Consolidated Balance Sheets. Quoted prices of identical or similar investment securities in active markets are used to estimate the fair values (i.e., Level 1 or Level 2 inputs).

Deposits: Money market and other non-maturity deposits carrying values approximate their fair values because they are short-term in duration and have no defined maturity. GAAP requires that the fair values of deposit liabilities with no stated maturities equal their carrying values and does not permit recognition of the inherent funding value of the instruments. Certificates of deposit are recorded at their historical issuance cost on the Consolidated Balance Sheets, adjusted for unamortized fees, with the fair value being estimated based on the currently observable market rates available to us for similar deposits with similar remaining maturities (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Debt issued by consolidated VIEs: We record debt issued by our consolidated VIEs at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Interest payable is included within Other liabilities on the Consolidated Balance Sheets. Fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction (i.e., Level 2 inputs).

Long-term and other debt: We record long-term and other debt at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Interest payable is included within Other liabilities on the Consolidated Balance Sheets. The fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities, or quoted market prices for the same transaction (i.e., Level 2 inputs).

Financial Instruments Measured at Fair Value on a Recurring Basis


	September 30, 2024
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	230	$	48	$	182	$	—
Total assets measured at fair value	$	230	$	48	$	182	$	—


	December 31, 2023
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	217	$	46	$	171	$	—
Total assets measured at fair value	$	217	$	46	$	171	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including equity method investments, property and equipment, right-of-use assets, deferred contract costs, goodwill and intangible assets. These assets are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances, such as upon impairment. We did not have any impairments for the three and nine months ended September 30, 2024 or for the three months ended September 30, 2023. During the nine months ended September 30, 2023 we wrote-off the remaining $6 million of our equity method investment in Loyalty Ventures Inc. (LVI).

Financial Instruments Disclosed but Not Carried at Fair Value


	September 30, 2024
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	18,050	$	—	$	—	$	18,050
Total	$	18,050	$	—	$	—	$	18,050

Financial liabilities
Deposits	$	12,875	$	—	$	12,875	$	—
Debt issued by consolidated VIEs	3,571		—		3,571		—
Long-term and other debt	1,130		—		1,130		—
Total	$	17,576	$	—	$	17,576	$	—


	December 31, 2023
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	19,802	$	—	$	—	$	19,802
Total	$	19,802	$	—	$	—	$	19,802

Financial liabilities
Deposits	$	13,583	$	—	$	13,583	$	—
Debt issued by consolidated VIEs	3,900		—		3,900		—
Long-term and other debt	1,457		—		1,457		—
Total	$	18,940	$	—	$	18,940	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

ALLOWANCE FOR CREDIT LOSSES

The Allowance for credit losses represents our estimate of expected credit losses over the estimated life of our Credit card and other loans, incorporating future macroeconomic forecasts in addition to information about past events and current

conditions. Our estimate under the Current Expected Credit Loss (CECL) approach is significantly influenced by the composition, characteristics and quality of our portfolio of credit card and other loans, as well as the prevailing economic conditions and forecasts utilized. The estimate of the Allowance for credit losses includes an estimate for uncollectible principal as well as unpaid interest and fees. Principal losses, net of recoveries are deducted from the Allowance for credit losses. Losses of unpaid interest and fees as well as any adjustments to the Allowance for credit losses associated with unpaid interest and fees are recorded as a reduction to Interest and fees on loans. The Allowance for credit losses is maintained through an adjustment to the Provision for credit losses and is evaluated for appropriateness on a quarterly basis.

In estimating our Allowance for credit losses, for each identified segment of loans sharing similar risk characteristics, management uses modeling and estimation techniques based on historical loss experience, current conditions, reasonable and supportable forecasts and other relevant factors. This modeling uses historical data and applicable macroeconomic variables with statistical analysis and behavioral relationships, to determine expected credit performance. Our quantitative estimate of expected credit losses under CECL is impacted by certain forecasted macroeconomic variables. We consider the macroeconomic forecast used to be reasonable and supportable over the estimated life of the Credit card and other loans portfolio, with no reversion period. In addition to the quantitative estimate of expected credit losses, we also incorporate qualitative adjustments for certain factors such as Company-specific risks, changes in current macroeconomic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the Allowance for credit losses reflects our best estimate of current expected credit losses.

Credit Card Loans

BNPL Loans

We measure our Allowance for credit losses on BNPL loans using a statistical model to estimate projected losses over the remaining terms of the loans, inclusive of an assumption for prepayments. The model is based on the historical statistical relationship between loan loss performance and certain macroeconomic data pooled based on credit quality risk score, term of the underlying loans, vintage and geographic location. As of September 30, 2024 and December 31, 2023, the Allowance for credit losses on BNPL loans was $31 million and $32 million, respectively.

Allowance for Credit Losses Rollforward


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
(Millions)
Beginning balance	$	2,164	$	2,207	$	2,328	$	2,464

Provision for credit losses (1)	369		304		980		747
Change in the estimate for uncollectible unpaid interest and fees	5		—		5		5
Net principal losses (2)	(348)		(304)		(1,123)		(1,009)
Ending balance	$	2,190	$	2,207	$	2,190	$	2,207

__________________________________

(1)Provision for credit losses includes a build/release for the Allowance, as well as replenishment of Net principal losses.

During the three months ended September 30, 2024 the balance of the Allowance for credit losses increased, primarily due to the acquisition of the previously mentioned credit card loan portfolio. The decrease in the Allowance for credit losses during the nine months ended September 30, 2024 is the result of the decline from the seasonal peak in Credit card and other loans as of December 31, 2023, partially offset by the increased reserve rate over the period. The increase in the reserve rate from 12.0% as of December 31, 2023 to 12.2% as of September 30, 2024, is due primarily to lower Credit card and other loans balances, which are down from their seasonal peak at the beginning of 2024. Overall, we continue to maintain an elevated reserve rate, 12.2% as of September 30, 2024, reflecting a conservative weighting of economic scenarios in our credit reserve modeling, which we intend to maintain until we see sustained improvement in delinquencies and an improved macroeconomic outlook.