As credit card issuers post increasing losses on bad card debt, Discover Financial Services has emerged as the holder of one of the stronger portfolios in the industry.

Discover says that its relatively healthy credit quality today is the result of a strategic decision made several years ago to be less aggressive than its rivals in pursuing new cardholders. The company has focused more aggressively on merchant acquisition, a longtime weak spot. Analysts said other issuers, in pursuing new customers, sometimes weakened their lending standards, a move that has come back to haunt them.

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