While loan growth continues to outpace that of competitors, Discover says that it has been tightening its standards, given the late stage of the credit cycle.
The large credit card issuers are becoming more selective about who they are extending credit to and how much they are willing to lend, their CEOs said Tuesday.
Though banks are generating more revenue from interchange and annual fees, those gains have been offset by declines in income from cash advances and late fees.
At banks of all sizes — from the $7.2 billion-asset WSFS Financial to the $373 billion-asset Capital One — marketing budgets ballooned in the fourth quarter.
Discover leaned heavily on rewards to drive new card acquisitions and sales growth in the fourth quarter, but suffered a double whammy of rising reward costs and higher charge-offs, causing it to miss analyst earnings expectations.