Is Capital One Buying Discover? What You Need to Know About the Merger

Capital One is acquiring Discover Financial Services in an all-stock deal announced in February 2024

Yes. Capital One announced in February 2024 that it would purchase Discover Financial Services for approximately $35.3 billion in stock. The deal is still pending regulatory review and is expected to close sometime in 2025, assuming federal banking regulators approve it. Until the deal closes, Discover and Capital One operate as separate companies with separate card products, customer accounts, and policies.

This is one of the largest bank mergers in recent years. When it closes, Capital One will become one of the largest credit card issuers in the United States, combining its existing card portfolio with Discover's card business, personal loans, and home loans.

Key Takeaways

• Capital One announced the acquisition of Discover in February 2024, with the deal expected to close in 2025 pending regulatory approval.
• Until the merger closes, your Discover card account remains separate from Capital One and operates under Discover's current terms and policies.
• The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Trade Commission must all review and approve the deal before it can proceed.
• Discover cardholders should expect communication from both companies about what will happen to their accounts after the merger closes.

What happens to your Discover card account during the merger process

Your Discover card account does not change while the deal is pending. You continue to use your card the same way, earn rewards the same way, and pay your bill to Discover the same way. Your account terms, interest rates, and rewards program remain exactly as they are now. Discover is still operating as an independent company until the regulatory process is complete and the deal officially closes.

Capital One and Discover are required by law to keep their businesses separate during the review period. This separation protects customers from disruption and ensures that regulators can evaluate the merger on its merits without the companies already being intertwined.

What regulators are reviewing and why it matters

Three federal agencies must review and approve this deal: the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Trade Commission (FTC). Each agency has different concerns and different authority.

The Federal Reserve and OCC focus on whether the combined bank will be stable and well-managed. They look at the financial health of both companies, their risk management practices, and whether the merger creates a bank that is too large or too concentrated. The FTC focuses on competition — whether combining these two major credit card issuers would reduce consumer choice or allow the merged company to raise prices or reduce rewards.

Regulators can approve the deal, approve it with conditions, or reject it. The review process typically takes many months. If any regulator objects, the deal can be delayed or blocked entirely.

When the merger closes: what changes for Discover customers

Once the deal closes, Discover will no longer be an independent company. Capital One will own Discover's credit card business, personal loan business, and home loan business. However, this does not necessarily mean your Discover card will disappear or become a Capital One card overnight.

In large bank mergers, the acquiring company often keeps the acquired brand operating separately for a period of time to avoid confusing customers and disrupting accounts. Capital One has not yet announced detailed plans for what will happen to the Discover brand after the merger closes. The company will likely communicate those plans to Discover customers well in advance.

What typically happens in these situations: Discover cards may continue to work as Discover cards for existing cardholders, but new card applications might be directed to Capital One products. Rewards programs may eventually be consolidated or merged. Customer service may eventually be handled by Capital One's teams. Account terms could change, though regulators often require that existing customers be given notice and the option to close their accounts if they disagree with major changes.

How this merger compares to other recent bank deals

Large credit card and banking mergers happen periodically, though they are relatively rare because regulators scrutinize them carefully. In 2008, Bank of America acquired Merrill Lynch. In 2016, TD Bank acquired Scottrade. In 2019, Charles Schwab acquired TD Ameritrade. Each of these deals took many months to close and involved significant regulatory review.

The Capital One-Discover deal is notable because both companies are primarily credit card issuers and consumer lenders, which means the FTC's competition concerns are particularly relevant. The FTC has become more skeptical of large mergers in recent years, so this deal faces more regulatory scrutiny than some past deals did.

What you should do now as a Discover customer

You do not need to take any action right now. Your account is not changing, and the deal is not final. Continue using your Discover card normally and paying your bills on time.

Watch for official communications from Discover and Capital One about the merger. Both companies will send notices to customers as the deal progresses and especially if the deal closes. Read these notices carefully, as they will explain what happens to your account and what options you have.

If you have concerns about the merger or want to understand how it might affect you, you can contact Discover's customer service directly. They can answer questions about your specific account and what to expect.

Frequently Asked Questions

Will my Discover card stop working if the merger closes?

No. Your card will continue to work. Capital One has not announced plans to when ready cancel Discover cards or convert them to Capital One cards. The company will likely allow existing Discover cardholders to keep their cards, though the long-term plan for the Discover brand has not been fully detailed.

Could the merger be blocked by regulators?

Yes. The FTC or other regulators could reject the deal if they determine it would harm competition or consumers. This is not certain, but it is possible. If the deal is blocked, Discover and Capital One will remain separate companies and nothing will change for customers.

Will my interest rate or rewards change after the merger closes?

Capital One has not announced changes to Discover's rewards program or interest rates. However, once the merger closes, Capital One could change these terms. Regulators typically require that customers be given notice and the option to close their accounts if major terms change.

When will the merger actually close?

Capital One has said the deal is expected to close in 2025, but the exact timing depends on how quickly regulators complete their review. The deal could close earlier or later depending on regulatory decisions and any conditions they impose.

Should I switch to a different credit card before the merger closes?

You do not need to switch. Your Discover account will not change while the deal is pending, and switching cards unnecessarily can hurt your credit score by closing an account and opening a new one. Wait to see what happens after the merger closes before making any decisions about your cards.