Discover Card Issuer Expects 1Q Loss, Boosts Credit Reserves

Although its credit delinquency rate may have leveled off, Discover Financial Services is boosting its reserves to cover loans deemed uncollectible by $305 million, and it expects to report a first-quarter loss of 22 cents to 23 cents per share. Discover said the rate of borrowers becoming 30-days delinquent is estimated to be about 5 percent, a reduction of 25 basis points from the fourth quarter 2009.

Discover Spending Study: Consumer Cutbacks Ease

The U.S. Spending Monitor index from the issuer of Discover credit cards rose 2.3 points to 87.5 as the economic outlook from consumers improved, indicating an easing of spending cutbacks fostered by the prolonged recession. Nonetheless, Discover reported no improvement in the attitudes of consumers surveyed when it comes to personal finances.

American Express, Discover Educate on Credit Card Reform

On the day landmark credit card laws took effect and made headlines worldwide, American Express and Discover released statements seeking to educate customers with online guides on the reform. Most other major credit card issuers did not release statements on the most sweeping credit card legislation in years – the first to generally ban retroactive interest rate increases and restrict certain fees.

Discover: Consumers Feeling Better About Their Finances

Despite lingering pessimism about the U.S. economy, consumers are feeling better about their personal finances, according to Discover’s U.S. Spending Monitor, a monthly glimpse into Americans’ financial outlook. In January, more consumers said their finances were in good shape or improving. Overall, 34 percent rated their personal finances as good or excellent – a 3-point increase from December and a 9-month high, Discover said.

Discover: Small Business Confidence Jumps

More small business owners surveyed this month have increased expectations that conditions for them will improve in the next six months, according to Discover’s Small Business Watch. More business owners are planning to increase spending, with 25 percent saying they will spend more on advertising, inventories and capital expenditures. This figure is up from 18 percent in December. There was also a jump in this category in the December-November time frame.

Credit Card Write-Offs Still Troubling as Reform Looms

Facing a pivotal year ahead with hopes of a turnaround despite looming reform laws, most credit card issuers saw declines in December delinquencies – or the 30-days late rate – but charge-offs are still troubling. Another challenging year ahead for the credit card industry includes the implementation of reform laws next month that are expected to hamper profitability with the toughest restrictions yet on when and how to impose interest rate hikes or penalty fees.

Discover Card Debuts Daily Cash, $1 Million Prize

Discover is giving away cash and gift cards every day this year, leading up to a $1 million grand prize as part of ts new sweepstakes program to encourage card usage. With every purchase using a Discover card, a card member will be automatically entered into the program with a chance to win $500, $100 or a gift card valued between $25 and $500. On Jan. 10, 2011, one winner will be chosen for the $1 million prize.

Discover: A Little Less Gloom from Small-Biz Owners

There was a little less gloom among small business owners in December, with fewer seeing the economy getting worse and more forecasting improvements in their own businesses in the coming year, according to Discover Financial Services’ latest index. “Small business owners are entering 2010 on a cautious note,” said Ryan Scully, director of Discover’s business credit card. “They’re still looking for more encouraging signs in the overall economy, but on a positive note, the number of them who see conditions for their own businesses getting better in the next six months increased for the first time since August.”

Discover’s Credit Card Defaults Up, 4Q Profit Down

Discover Financial Services, issuer of the Discover cards, today reported a 16 percent drop in profit for its fourth quarter, with climbing credit card defaults playing a part in its bottom line. Discover – the sixth-largest credit card issuer – reported net income of $371, or 63 cents a share, for its fourth quarter ended Nov. 30, down 16 percent from $444 million, or 89 cents a share, in the same period last year.

Discover: Majority of Small Businesses Not Online

The Internet, blogs and social media have taken hold of society, but apparently small businesses still haven’t embraced going online, with 55 percent not having a website and about the same percentage claiming it’s a myth that they need to have one, says a new survey by Discover Business Card. In another finding, 46 percent of small business owners said it is a myth that every company should have a website, while 44 percent felt the opposite and 10 percent were not sure.

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