Capital One Expects Discover Card Loans to Shrink for Several More Quarters

Capital One expects loans in its acquired Discover Card portfolio to keep shrinking for several more quarters, even as new originations rise and the bank prepares to increase marketing in 2027.

Legacy Discover Card loan balances fell 2.9% from a year earlier in the third quarter ended Sept. 30, 2026. New originations rose year over year for the first time since Capital One completed its acquisition of Discover Financial Services in May 2025, but outstanding loans continued to decline.

“We expect continued contraction over the next several quarters,” Capital One Chairman and CEO Richard D. Fairbank said. The bank did not set a quarter for the portfolio’s return to growth.

Third-quarter marketing expense reached $1.594 billion, 14% higher than a year earlier and 4% lower than in the second quarter. “We expect to lean harder into marketing in 2027,” Fairbank said. The plan includes Discover, though the bank gave no dollar target for next year.

The outlook adds detail to Capital One’s third-quarter results. Separately, its Global Payment Network handled $190.934 billion in volume during the quarter, a 25% increase from a year earlier. That network figure measures payment activity, while the Discover Card figure reflects outstanding loans.

Capital One had moved all new Discover Card originations to its technology platform by Sept. 30. It expects to finish converting existing accounts in the first quarter of 2027.