But the delinquency rate for loans over 30 days past due declined sharply as credit-card users improved at making timely payments.
Discover earned $532 million, or $1 per share, for the three months ended May 31. That compares with $593 million, or $1.09 per share, a year ago. Analysts polled by FactSet expected profit of 99 cents per share.
Revenue rose 6 per cent to $1.85 billion from $1.74 billion. Wall Street predicted $1.86 billion.
Total loans rose 9 per cent to $57.1 billion.
Shares of the Riverwoods, Ill., company are down 2.5 per cent to $32 in premarket trading Tuesday.