Discover credit cardholders spent less but carried more debt—bad news for Capital One merger

By the numbers: Discover’s Q3 earnings painted a dim portrait of the average consumer’s financial health.

• Discover’s card sales volume dropped 3% YoY in Q3 2024, per its earnings presentation.
• Even so, its ending loan balance for credit cards was up 3% YoY.
• At 3.84%, the 30-day delinquency rate for credit cards has been basically flat since Q4 2023.
• The net principal charge-off rate for credit cards was 5.28%, up from 4.03% last year but down from 5.55% in Q2.
• Discover’s Q3 network volume fell 4% YoY. We forecast Discover’s full-year network volume will grow just 1.4% in 2024.

Discover’s delinquency and net charge-off trends are in line with what we are seeing from other major card issuers.