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                    CONFIDENCE TUMBLES TO 18-MONTH LOW

 3 Out of 4 Small Business Owners Say Economic Conditions in Country Getting Worse; Economy
                       Rates as Most Important Issue in Presidential Race

            Health Care Poll: 77% of Small Business Owners Do Not Offer Health Insurance to

Riverwoods, IL, Jan. 28, 2008 – Few small business owners started out the year with confidence in
the direction of the U.S. economy, according to the Discover Small Business Watch. The monthly
index fell nearly 6½ points in January to 86.3, the second- largest point tumble in the 18- month
existence of the poll. The index has been steadily decreasing since July, when it was 107.3.

“We have a significant increase this month in the number of small business owners who think the
overall economy is getting worse,” said Sastry Rachakonda, director of Discover's business credit
card. “Cash flow has dipped and spending on business development is down, which causes concern in
this sector. However, the numbers that measure owners’ confidence in their own businesses have been
fairly constant. It is too early to tell whether any of the proposed stimulus plans are affecting the mood
of the small business segment of the economy.”

January Key Findings:

      74 percent of small business owners feel that economic conditions in the U.S. are getting
       worse, a jump from 65 percent who felt that way in December.

      44 percent said they have experienced cash flow issues over the last 90 days, also a slight
       increase from 42 percent in December but significantly more than the 32 percent in January

      35 percent of small business owners picked the economy by far as the most important issue in
       the presidential campaign. The war in Iraq was a distant second at 14 percent; followed by
       government ethics and corruption, 13 percent; immigration, 11 percent; health care, 9 percent;
       national security, 8 percent; Social Security, 4 percent; and some other issue, 2 percent. Six
       percent were not sure.

      26 percent of small business owners rate the U.S. economy as excellent or good, which is
       lower than the 29 percent in December who felt the same, and the lowest since surveying
       began in August 2006

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Poll: Few Small Business Owners Offer Healthcare; High Costs Hamper Growth

Healthcare costs continue to be a financial burden for small businesses, according to this month’s poll,
which found that 77 percent of small business owners do not offer health insurance to their e mployees,
up from 74 percent last year.

Thirty-nine percent of small business owners said that the cost of health care has a major impact on
their ability to grow, while seven out of 10 said that obtaining affordable health insurance for
themselves and their employees was very difficult (51 percent) or somewhat difficult (18 percent).

“Healthcare costs were having a big impact on businesses when we did this survey one year ago,” said
Rachakonda. “This year’s survey shows that the situation has only worsened. Nearly four out of 10
entrepreneurs feel that healthcare costs have a major impact on their ability to grow.”

Key Healthcare Poll Findings:

      25 percent of small business owners said they are currently uninsured, up from18 percent who
       said the same last year.

      Only 15 percent of small business employers offer health insurance to their employees. Of
       those, 40 percent have considered discontinuing it because the cost is too high – a number that
       increased from 33 percent last year.

      Among those small business owners who do have healthcare coverage, 27 percent are insured
       by another family member’s plan, while 35 percent have purchased coverage separately.

      34 percent of small business owners said their employees go without health insurance.

“Small business owners have to be flexible and resourceful to find health insurance for themselves and
their families,” Rachakonda said. “But for those whose spouses don’t have health benefits, or for
those who can’t afford to purchase a plan, they are simply going without.”

Small businesses that cannot find a way to provide health insurance for their employees should expect
to have a more difficult time recruiting talent. In a survey of 4,000 consumers, 49 percent said that
health benefits were very important to them when seeking employment, while another 23 percent said
coverage somewhat important in their decision to select a new job.

The views and opinions expressed by small business owners and consumers who participate in the
Small Business Watch survey are their own and do not necessarily reflect those of Discover Financial
Services or its affiliates.

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 employ less than five employees, a segment that consists of 22

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million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a
national random survey of 1,000 small business owners. It is commissioned by the Discover Business
Card, which strives to offer the best business credit card for American small businesses, and is
conducted by Rasmussen Reports, LLC (, 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 of 2006. In addition to generating the index, the Small Business Watch surveys small business
viewpoints on key business drivers, and also surveys 4,000 consumers to gauge purchasing behavior
and attitudes towards small businesses. For past results and small business survey data, visit For information on Discover Business Card, visit

About Discover Financial Services

Discover Financial Services (NYSE: DFS) is a leading credit card issuer and electronic payment
services company with one of the most recognized brands in U.S. financial services. The company
operates the Discover Card, America’s cash rewards pioneer. Since its inception in 1986, the company
has become one of the largest card issuers in the United States. Its payments businesses consist of the
Discover Network, with millions of merchant and cash access locations, and PULSE, one of the
nation’s leading ATM/debit networks. Discover also operates the Goldfish credit card business in the
United Kingdom. For more information, visit



Jon Drummond
Discover Financial Services

Daniel Delson
Robinson Lerer & Montgomery

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