Capital One to buy Discover

[Chuckanut]

Capital One is going to buy Discover according to the WSJ. It seems Cap One wants Discover’s payment network among other things.

Card networks are critical to enabling transactions and setting fees that merchants pay when consumers shop with credit cards. Though much smaller than Visa and Mastercard , Discover is one of the few competitors to those companies in the U.S. and it is one of a small number of card issuers that also has a payments network.

 

[Texas Proud]

Wonder if it will get rejected by the SEC...


Seems anti-competitive...

 

[easysurfer]

Say it ain't so! Will they keep the Discover name? I hope so.

 

[statsman]

I sure hope I don't end up saying "Discover sure had a nice run ..."

 

[Chuckanut]

From the article in The WSJ:

Capital One also plans to maintain the Discover brand on the cards and network—assuming regulators sign off and the deal is consummated.*

 

[Car-Guy]

^^^^^
I hope they'll keep offering Discover cards too. I'm setup to use Cap One and Discover.

 

[rk911]

Capitol One Acquires Discover

I wonder if the US based, excellent customer service at Discover will change with this merger. When Livelock was purchased by Symantec in 2017 their customer service, which was excellent, went into the toilet. We dropped them and went elsewhere. I'd hate to see that happen at Discover.

https://www.foxbusiness.com/markets/capital-one-acquire-discover-financial-report

 

[Chuckanut]

^^^^^
I hope they'll keep offering Discover cards too. I'm setup to use Cap One and Discover.

I like Cap One's ENO virtual cards. I use them for most of my automatic payments. The cash back is 1.5%, not quite as good as some, but if things go bad with a credit card number at one business, I only have to change that one card at that one business. And it's a great way to avoid getting automatically renewed. I usually will lock the card I use to pay for a trial service. If they try to sneak in an early renewal or I forget to cancel, it's automatically rejected.

Discover is nice for its 5% cashback offers. This quarter it's restaurants which I don't use much. At other times it's gasoline, groceries, online services and usually Amazon in the forth quarter.

 

[teej1985]

More than likely.

 

[oldtimer]

I'd expect it will at best match the current Capital customer service.

 

[braumeister]

Threads merged.

 

[target2019]

An interesting change I had not anticipated or ever thought of...

We use a CapOne CC, as BJs switched over to that. Then I realized I could charge high-cost Rx and earn some points/cash back at 2%. CapOne became our primary card for everyday purchases.

Prior to that we had been using Discover CC (1% back).

We don't require customer service normally, so we'll have to sit here and wait for the next shoe to drop before making decision(s).

We're also using the Discover HYSA as one of the backstops for bank checking.

I am suspicious about losing something in the process. We'll see.

 

[Kork13]

It's probably a 50/50 shot that the deal gets killed by regulators. Honestly, having used both companies over time, they each have some very good qualities. But we'll just see how it turns out.

 

[Spock]

I had bought a small Discover bond (not a CD), rated BBB-, pays 6.7%, not callable until 2032, late last year. After reading several articles on the rising defaults and charge offs on credit card balances I was planning on selling it at the 1 year holding anniversary this fall as a way of a) reducing my exposure to corporates, b) reducing my exposure to lower rated bonds, and c) trying out my first sell-for-profit-long-term-capital-gain in a taxable account.

At first glance the buyout may be a good thing as Capital One's bond ratings seem to be same or higher (more BBBs than BBB-'s).

The news articles describe the merger as two damaged trains running into each other creating a larger train wreck.

Time will tell I guess.

 

[Sue J]

We don't have a Discover credit card but we do have DiscoverBank savings and checking accounts. Reading about the merger it's not clear if DiscoverBank is included.

 

[Spock]

We don't have a Discover credit card but we do have DiscoverBank savings and checking accounts. Reading about the merger it's not clear if DiscoverBank is included.

Capital One is buying Discover Financial Services which owns Discover Bank.

 

[Texas Proud]

I stopped using Cap One due to bad customer service and getting 2% elsewhere... and Fidelity dropping foreign transaction fees was even better...


If Discover keeps their 5% cash back option I will probably keep using it...

 

[rk911]

I stopped using Cap One due to bad customer service and getting 2% elsewhere... and Fidelity dropping foreign transaction fees was even better...


If Discover keeps their 5% cash back option I will probably keep using it...

I'm praying that the excellent Discover cust. service stays in place. That's one reason we've been using Discover for years.

 

[easysurfer]

I'm praying that the excellent Discover cust. service stays in place. That's one reason we've been using Discover for years.

+1

Same here. Another reason why I've been a fan of Discover is they have statements that actually make sense instead on constantly making changes to the look for the sake of change.

 

[SecondAttempt]

I don't use Discover and have never had a CapOne card. Nothing against them, just the way it has worked out. When I heard the news I was surprised because it just seems like a marriage of two red-headed step children, not to insult any read-headed step children that might be reading. Discover has just never found its place in the Visa/MC/AMEX universe. It must be something technical that CapOne sees. My thought is that Discover's low tier position probably makes their network fees lower. And the recent changes allowing big retailers to route as they please to lower fees will benefit CapOne and its cardholders.

 

[Texas Proud]

Saw a bit on TV today... if combined it would be the largest CC company by outstanding balances...


I doubt it will be allowed to go thru with the current head of FTC...

 

[Spock]

I had bought a small Discover bond (not a CD), rated BBB-, pays 6.7%, not callable until 2032, late last year. After reading several articles on the rising defaults and charge offs on credit card balances I was planning on selling it at the 1 year holding anniversary this fall as a way of a) reducing my exposure to corporates, b) reducing my exposure to lower rated bonds, and c) trying out my first sell-for-profit-long-term-capital-gain in a taxable account.

At first glance the buyout may be a good thing as Capital One's bond ratings seem to be same or higher (more BBBs than BBB-'s).

The news articles describe the merger as two damaged trains running into each other creating a larger train wreck.

Time will tell I guess.

I got this fixed income alert from Fidelity this morning regarding the Discover bond:
Event Description : OTHER POSITIVE FTC CREDIT WATCH ON 02/21/24 with no other info other than to "contact your advisor".
first I've ever heard of an FTC credit watch.

 

[rk911]

Saw this in our local paper discussing if Discover's Riverwoods, IL ops will remain if the merger is approved.

https://www.dailyherald.com/20240226/news/fate-of-discover-financial-services-campus-in-riverwoods-uncertain/?utm_source=&utm_medium=email&utm_content=article%20column&utm_campaign=02%2F27%2F2024

 

[Koolau]

Discover is my back-up (to my back-up) credit card. So I don't much care. I do kinda hope they keep the Discover name and my old CC number. YMMV