Large card issuers that cater to borrowers ranging from the affluent to the subprime say that overall card balances — and thus the firms’ interest income — are falling, the Wall Street Journal reported. To make up for it, issuers are spending more on marketing and loosening their underwriting standards. Discover Financial Services said on its earnings call last month that the share of card balances that were paid off at the end of the first quarter were at the highest level since 2000. Capital One Financial Corp. said that nearly half of the credit-card balances it had at the beginning of March were paid off by the end of the month, which the company described as historically high. The companies’ calculations are based on the credit-card balances that they packaged into securities and sold to investors. Synchrony Financial, the largest issuer of store credit cards in the U.S., said payment rates have been higher than they averaged before the pandemic. Card balances at the three companies were down 9%, 17% and 7% in the first quarter from a year prior, respectively.
