A merger in your wallet as Discover cards and Capital One cards seek to become one.

I'm David Brancaccio in New York.

Good morning to you.

One of the country's biggest credit card firms wants to buy another.

Capital One says it's reached an all stock deal to take over, discover financial services.

The deal would create a stronger rival to Visa and MasterCard. It would also mean one less

credit card company competing for consumers and a big bank getting bigger.

Marketplace's Nobosafo has more. Capital One is highlighting the merger's potential to create more competition among payment

networks where there are few players.

There's Visa, Mastercard, American Express, and Discover, a distant fourth.

Capital One says a combined company could better compete with the dominant networks,

which theoretically could mean lower fees and maybe lower costs for consumers.

Both companies are also giant financial institutions,

capital one with $470 billion in assets, discover with $150 billion.

Regulators in Washington have shown little appetite for approving big

mergers in the financial sector, especially following the regional bank

failures last year which showed that even mid-sized institutions could pose

systemic risks.

Meanwhile, Capital One and Discover are both preparing for an increase in defaults

as pandemic savings run out and consumers amass more debt.

Capital One said the deal would help it become a bigger bank

in general while also reducing expenses. I'm Novasafo for Marketplace.

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