Discover Branches Beyond Credit Cards
Discover Financial is best known for its work in the credit card industry, leaving most to assume the company is a one-trick pony. While the company does generate 80% of its revenue from credit cards, new business ventures have allowed Discover to take on profitable programs in other sectors of the economy.
In 2011, Discover acquired a large student loan portfolio from Citigroup. In June 2012, they took on the Home Loan Center from Tree.com. After generating more than $2 billion in home equity loans between June and November, the company began looking for other ways to expand their options. Now they have decided to branch out to home equity loans.
The new plan consists of offering loans between $25,000 and $100,000, most of which will go to the company’s current customers. The loans will come on fixed-rate, closed-end terms. Nearly 80% of Discover cardholders are homeowners, so the company will have a strong audience to start with. If you are a Discover cardholder, expect to see an offer in the mail shortly.
Beyond these efforts, Discover also maintains business in personal loans, deposit products, mortgage loans, and more.
Nevertheless, it still makes most of its money through the credit card industry. While the average issuer saw a 16% decline in outstanding credit card loans between 2010 and 2011, Discover’s outstanding loans only decreased 7%. The group has been on a steady incline since then, and the recent launch of Discover It will surely bring even more to the table. Rewards card users are already raving about the improvements “It” has over other cards from Discover’s history, and there is no telling what other enhancements may come in the future.
Before you write off Discover as a lesser financial institution, consider the efforts it is making to gain financial ground. Wonder what they will “discover” next…