Discover says 80 percent of former ‘skip-a-payment’ customers are ‘getting back on their feet’
Forbearance appears to be working for Discover Financial Services.
“Of the customers no longer enrolled in the skip-a-payment program, more than 80 percent are making payments the following cycle and getting back on their feet,” CEO Roger Hochschild told investors at a virtual conference Tuesday. Borrowers may have been helped by the record government stimulus pumped into the economy in April and May, he said.
“The re-enrollment rate is relatively low,” Hochschild said, adding that the company had enrolled about $3.3 billion of card loans in the forbearance program through May. “A lot of people took one month and are not renewing for a second month.”
Discover was battered as the coronavirus pandemic stifled economic activity, leaving spending on the Riverwoods, Illinois-based company’s cards down about 30 percent at the depth of the crisis. Spending has begun to improve, dropping 12 percent to 13 percent at the end of May from a year earlier, Hochschild said.
Shares of the company fell 4 percent Tuesday to $58.85, bringing this year’s decline to 31 percent.