Discover Business Credit Cards - DOC

							                             DISCOVER® S MALL B US INESS WATCHSM:
              SMALL BUSINESS CONFIDENCE FALLS AGAIN IN JULY
       58% of Small Business Owners Say Economy is Poor, 57% Expect it to Get Worse

RECESSION RETURN: 75% of Small Business Owners Think Another Recession is Likely
                          Before Full Recovery

                OUT OF POCKET: Record-High 73% Taking Home Less Pay

Riverwoods, IL, July 26, 2010 – Small business owners’ economic confidence fell for the
second month in July as a higher percentage of small business owners rated the current economy
as poor and see it only getting worse, according to the Discover® Small Business WatchSM. The
index dropped to 83 in July from 86.1 in June. It has been below 83 only once since the
beginning of the year.

In July, 58 percent of small business owners rated the economy as poor, up from 51 percent in
June, while 7 percent rated the economy as excellent or good, down from 12 percent in June.

“Even though cash flow issues eased off in July, small business owners still aren’t feeling any
positive effects from anything going on in the bigger economy,” said Ryan Scully, director of
Discover’s business card, who commissions the monthly research. “They’ll be holding back their
economic enthusiasm until they have tangible evidence that their bottom lines are improving.”

Although it wasn’t part of the confidence index calculation, an additional question in July
revealed that 75 percent of small business owners believe it is likely or highly likely that the
economy will slip into another recession before it fully recovers, with 15 percent believing
another recession is not very likely to happen and 10 percent feeling unsure.

Other July Confidence Indicators:

      57 percent of small business owners said the economy is getting worse, up from 51
       percent in June; 27 percent think the economy is getting better; 14 percent think it is the
       same; and 3 percent are not sure.

      45 percent of small business owners report economic conditions for their businesses were
       worse in July, up from 43 percent in June; while 30 percent of respondents said
       conditions were better; 22 percent reported conditions were the same and 3 percent
       weren’t sure.

      In July, temporary cash flow issues declined as 49 percent of small business owners
       reported that their businesses did not encounter any temporary cash flow issues that
       caused them to hold off on paying some bills in the past 90 days, up from 45 percent in
       June; 47 percent did encounter cash flow issues, down from 51 percent the prior month.
      28 percent of small business owners reported they will increase spending on business
       development over the next six months, up from 25 percent in June and the most since
       September 2008.

Small Business Owners Have Higher Disapproval Ratings for Obama, Congress

Sixty percent of small business owners either somewhat disapprove or strongly disapprove of
how President Obama has handled the economy, up from 52 percent in 2009; while 39 percent
strongly or somewhat approve, down from 47 percent last July.

Consistent with previous polls, the Watch found small business owners remain unconvinced that
Washington can be of any help: 68 percent reported that they are not very confident or not at all
confident that the federal government and Congress can address their needs, up from 65 percent
in 2009.

Record Numbe r of Small Business Owners Taking Home Less Pay

Seventy-three percent of small business owners surveyed also report current economic
conditions have caused them to take home less money in July, up from 69 percent in July 2009
and 55 percent in February 2008, when the Watch first posed this question.

Pricing has been adjusted by 37 percent of small business owners in the past six months to reflect
higher costs, up from 35 percent in July 2009. Fifty- five percent of owners did not adjust pricing,
down from 60 percent in 2009.

Fewer small business owners reported borrowing money to pay bills or applying for new credit
cards, lines of credit or loans in July. This year, 27 percent reported borrowing money in the past
six months to pay bills, down from 33 percent in July 2009, and 71 percent did not need to
borrow money to pay bills, up from 65 percent last July. Only 10 percent of small business
owners surveyed applied for new credit cards, lines of credit or loans over the past three months,
down from 17 percent in 2009; 89 percent did not apply and 2 percent weren’t sure.

SBA Stimulus Loans Untapped by 97% of Small Business Owners

Ninety-seven percent of small business owners did not apply for stimulus funded SBA loans in
the past year even though 50 percent were in favor of the expansion of an SBA loan program last
year and 31 percent said they would consider applying for funds.

Despite so few small business owners taking advantage of the SBA program in the past year, 27
percent of small business owners said they would apply should more funding be made available
in the next six months, while 65 percent would not apply and 8 percent weren’t sure.

About the Small Business Watch

The Discover Small Business Watch is a monthly index measuring the relative economic
confidence of U.S. small business owners who have less than five employees, a segment that
consists of 22 million businesses producing more than a trillion dollars in annual receipts. The
Watch is based on a national random survey of 750 small business owners. It is commissioned
by Discover Business card, which strives to offer the best business credit card for American
small businesses, and is conducted by Rasmussen Reports, LLC (www.rasmussenreports.com),
an independent survey research firm. The numeric index is calculated by assigning values to
responses to a set of six consistent questions. The base value of the Watch was established at
100.0 based on surveys conducted in August 2006. In addition to generating the index, the Small
Business Watch surveys small business owners every month on key issues, and polls 3,000
consumers four times per year to gauge purchasing behavior and attitudes towards small
businesses. For past results and survey data, visit www.discovercard.com/business/watch. For
information on Discover Business card, visit www.discovercard.com/business.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company
with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the
company has become one of the largest card issuers in the United States. The company operates
the Discover card, America's cash rewards pioneer, and offers personal and student loans, online
savings accounts, certificates of deposit and money market accounts through its Discover Bank
subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and
cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club
International, a global payments network with acceptance in more than 185 countries and
territories. Visit www.discoverfinancial.com.

Contacts

Jon Drummond
Discover Financial Services
224-405-1888
jondrummond@discover.com

Lauren M. Onis
Burson-Marsteller
212-614-4069
lauren.onis@bm.com