Discover Financial Services (DFS) said the proportion of its customers who are a month late on their credit card payments hit an all-time low during its second quarter, helping more than double the card company’s profit.
The record low in credit-card delinquency rates, which the company said covers a 25-year period, highlights the sharp turnaround in the ability of Discover’s consumers to pay off credit-card debt. The rate fell to 2.79% of all credit-card loans, from 4.39% a year earlier.
And as the drop also came with a 1% increase in credit-card balances, a 9% increase in card sales volume and a 5% increase in total loans–a measure that includes all types of loans, not just credit cards–Discover sounded hopeful about the health of its consumers and its own business.
Chairman and Chief Executive David Nelms said in an interview with Dow Jones Newswires that Discover is gaining market share. Customer spending is also up partly because of increased gas prices. But, while Nelms said the economy is not on firm footing, discretionary spending is coming back and Internet and health-care spending are both up. – Source
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