Discover Financial Services
The Riverwoods, Illinois-based company's income from continuing operations rose to $226 million, or 43 cents per share, for the fiscal second that ended May 31, from $202 million, or 42 cents per share, a year earlier.
The result was boosted by $295 million from an antitrust settlement with Visa Inc
Excluding that gain, Discover would have reported an operating loss.
Discover's charge-off rate -- the percentage of debt it does not expect to be repaid -- climbed to 7.79 percent in the quarter from 6.48 percent in the first quarter.
With default rates at the highest level in history, credit card companies are the latest victims of a economic crisis that began with the collapse of the U.S. housing and subprime mortgage markets and spread around the world.
Discover shares were up 6.8 percent to $9.52 in premarket trading.
(Reporting by Juan Lagorio, Editing by John Wallace)