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    &lt;!-- Begin Block Tagged Accounting Policy: axp-20100630_note9_accounting_policy_table1 - us-gaap:DerivativesPolicyTextBlock--&gt;
    &lt;div style="font-family: 'Times New Roman',Times,serif"&gt;
    &lt;div style="margin-top: 10pt"&gt;
    &lt;table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"&gt;
    &lt;tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"&gt;
    &lt;td width="3%" nowrap="nowrap" align="left"&gt;&amp;#160;&lt;/td&gt;
    &lt;td width="1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;
    &lt;div style="text-align: justify"&gt;&lt;u&gt;&lt;b&gt;Derivatives that Qualify for Hedge Accounting&lt;/b&gt;&lt;/u&gt;
    &lt;/div&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;/table&gt;
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;Derivatives executed for hedge accounting purposes are documented and designated as such when the
    Company enters into the contracts. In accordance with its risk management policies, the Company
    structures its hedges with very similar terms to the hedged items. The Company formally assesses,
    at inception of the hedge accounting relationship and on a quarterly basis, whether derivatives
    designated as hedges are highly effective in offsetting the fair value or cash flows of the hedged
    items. These assessments usually are made through the application of the regression analysis
    method. If it is determined that a derivative is not highly effective as a hedge, the Company will
    discontinue the application of hedge accounting.
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;u&gt;&lt;b&gt;Fair Value Hedges &lt;/b&gt;&lt;/u&gt;
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;A fair value hedge involves a derivative designated to hedge the Company&amp;#8217;s exposure to future
    changes in the fair value of an asset or a liability, or an identified portion thereof that is
    attributable to a particular risk. The Company is exposed to interest rate risk associated with its
    fixed-rate long-term debt. The Company uses interest rate swaps to convert certain fixed-rate
    long-term debt to floating-rate at the time of issuance. As of June&amp;#160;30, 2010 and December&amp;#160;31, 2009,
    the Company hedged $15.1&amp;#160;billion of its fixed-rate debt to floating-rate debt using interest rate
    swaps.
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;To the extent the fair value hedge is effective, the gain or loss on the hedging instrument offsets
    the loss or gain on the hedged item attributable to the hedged risk. Any difference between the
    changes in the fair value of the derivative and the hedged item is referred to as hedge
    ineffectiveness and is recorded in earnings as a component of other, net expenses. Hedge
    ineffectiveness may be caused by differences between the debt&amp;#8217;s interest coupon and the benchmark
    rate, which is in turn primarily due to credit spreads at inception of the hedging relationship
    that are not reflected in the valuation of the interest rate swap. Furthermore, hedge
    ineffectiveness may be caused by changes in the relationship between 3-month LIBOR and 1-month
    LIBOR rates, as these so-called basis
    spreads may impact the valuation of the interest rate swap without causing an offsetting impact in
    the value of the hedged debt. If a fair value hedge is de-designated or no longer considered to be
    effective, changes in fair value of the derivative continue to be recorded through earnings but the
    hedged asset or liability is no longer adjusted for changes in fair value. The existing basis
    adjustment of the hedged asset or liability is then amortized or accreted as an adjustment to yield
    over the remaining life of that asset or liability.
    &lt;/div&gt;
    &lt;!-- Folio --&gt;
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    &lt;!-- PAGEBREAK --&gt;
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    &lt;div align="center" style="font-size: 10pt; margin-top: 0pt"&gt;
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;u&gt;&lt;b&gt;Cash Flow Hedges &lt;/b&gt;&lt;/u&gt;
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;A cash flow hedge involves a derivative designated to hedge the Company&amp;#8217;s exposure to variable
    future cash flows attributable to a particular risk of an existing recognized asset or liability,
    or a forecasted transaction. The Company hedges existing long-term variable-rate debt, the rollover
    of short-term borrowings and the anticipated forecasted issuance of additional funding through the
    use of derivatives, primarily interest rate swaps. These instruments effectively convert
    floating-rate debt to fixed-rate debt for the duration of the swap. As of June&amp;#160;30, 2010 and
    December&amp;#160;31, 2009, the Company hedged $0.9&amp;#160;billion and $1.6&amp;#160;billion, respectively, of its floating
    debt using interest rate swaps.
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;For derivatives that qualify as cash flow hedges, the effective portion of the gain or loss on the
    derivatives is recorded in AOCI and reclassified into earnings when the hedged cash flows are
    recognized in earnings. The amount that is reclassified into earnings is presented in the
    Consolidated Statements of Income with the hedged instrument or transaction impact, primarily in
    interest expense. Any ineffective portion of the gain or loss on the derivatives is reported as a
    component of other, net expenses. If a cash flow hedge is de-designated or terminated prior to
    maturity, the amount previously recorded in AOCI is recognized into earnings over the period that
    the hedged item impacts earnings. If a hedge relationship is discontinued because it is probable
    that the forecasted transaction will not occur according to the original strategy, any related
    amounts previously recorded in AOCI are recognized into earnings immediately.
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;In the normal course of business, as the hedged cash flows are recognized into earnings, the
    Company expects to reclassify $25&amp;#160;million of net pretax losses on derivatives from AOCI into
    earnings during the next 12&amp;#160;months.
    &lt;/div&gt;
    &lt;!-- Folio --&gt;
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    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;u&gt;&lt;b&gt;Net Investment Hedges&lt;/b&gt;&lt;/u&gt;
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;A net investment hedge is used to hedge future changes in currency exposure of a net investment in
    a foreign operation. The Company primarily designates foreign currency derivatives, typically
    foreign exchange forwards, and on occasion foreign currency denominated debt, as hedges of net
    investments in certain foreign operations. These instruments reduce exposure to changes in currency
    exchange rates on the Company&amp;#8217;s investments in non-U.S. subsidiaries. The effective portion of the
    gain or loss on net investment hedges are recorded in AOCI as part of the cumulative translation
    adjustment. Any ineffective portion of the gain or loss on net investment hedges is recognized in
    other, net expenses during the period of change.
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;&lt;u&gt;&lt;b&gt;Derivatives Not Designated as Hedges &lt;/b&gt;&lt;/u&gt;
    &lt;/div&gt;
    &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"&gt;The Company has derivatives that act as economic hedges and are not designated for hedge accounting
    purposes. Foreign currency transactions and non-U.S. dollar cash flow exposures from time to time
    may be partially or fully economically hedged through foreign currency contracts, primarily foreign
    exchange forwards, options and cross-currency swaps. These hedges generally mature within one year.
    Foreign currency contracts involve the purchase and sale of a designated currency at an agreed upon
    rate for settlement on a specified date. The changes in the fair value of the derivatives
    effectively offset the related foreign exchange gains or losses on the underlying balance sheet
    exposures. From time to time, the Company may enter into interest rate swaps to specifically manage
    funding costs related to its proprietary card business.
    &lt;/div&gt;
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      <ElementDefenition>Describes an entity's accounting policies for its derivative instruments and hedging activities. Disclosure may include: (1) Each method used to account for derivative financial instruments and derivative commodity instruments ("derivatives"); (2) the types of derivatives accounted for under each method; (3) the criteria required to be met for each accounting method used, including a discussion of the criteria required to be met for hedge or deferral accounting and accrual or settlement accounting (for example: whether and how risk reduction, correlation, designation, and effectiveness tests are applied); (4) the accounting method used if the criteria specified for hedge accounting are not met; (5) the method used to account for termination of derivatives designated as hedges or derivatives used to affect directly or indirectly the terms, fair values, or cash flows of a designated item; (6) the method used to account for derivatives when the designated item matures, is sold, is extinguished, or is terminated. In addition, the method used to account for derivatives designated to an anticipated transaction, when the anticipated transaction is no longer likely to occur; and (7) where and when derivatives, and their related gains (losses) are reported in the statement of financial position, cash flows, and results of operations and (8) an accounting policy decision to offset fair value amounts with counterparties. An entity should also consider describing its embedded derivatives, and the method(s) used to determine the fair values of derivatives and any significant assumptions used in such valuations.</ElementDefenition>
      <ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 133
 -Paragraph 44

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Regulation S-X (SX)
 -Number 210
 -Section 08
 -Paragraph n
 -Article 4

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name FASB Interpretation (FIN)
 -Number 39
 -Paragraph 10

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