Discover plans to expand beyond credit cards in near future
Credit card regulations have left companies scrambling for new means of profit, and Discover Financial Services is the latest to announce plans to look into providing other services. Discover, one of the most successful credit card issuers in the country, said this week it plans to look into mortgage and checking businesses.
Citigroup Inc. has been in discussion with Discover to hand over their private student loan business to the issuer, Reuters reports. The deal is estimated to cost nearly $600 million. Discover announced it will look into buying existing companies, as well but starting mortgage and checking businesses from scratch.
The chief executive of Discover, David Nelms, specified to Reuters that the company does not intend to provide these services for at least a year, however.
Discover reported a charge-off rate of 7.1 percent in the third quarter, a decrease from 8 percent a year earlier, according to the Wall Street Journal. As consumers gain a better grasp on their credit card debt, they may become more inclined to look into things such as loans and mortgages from credit card providers in the future.