Discover 3Q profit more than doubles, card use up

By PZF-ajc | September 22, 2011 | 9:00 AM EDT

NEW YORK (AP) — Discover Financial Services says its third-quarter profit more than doubled as its customers used their cards more and late payments reached a new low.

The Riverwoods, Ill.-based credit card issuer says net income soared to $642 million, or $1.18 per share. Wall Street was expecting profit of 96 cents per share.

Higher gas prices helped push sales volume on Discover cards up 9 percent.

The balances customers carried on cards rose 2 percent, the first such increase since the spring of 2009. Yet the company says it also sees more customers paying their balances off each month.

Late payments fell to an all-time low, and defaults declined.

The company says it also got a boost from increased interest payments related to its growing student loan business.