Discover sees fewer credit card defaults in Sept.

Discover Financial Services, the credit-card company that took $1.3 billion from the Treasury's bank rescue fund, said defaults fell to 8.69 percent in September.

Write-offs of loans deemed uncollectible dropped from 9.16 percent in August, the Riverwoods-based lender said today in a federal filing. Payments at least 30 days overdue, an indicator of future losses, rose to 5.57 percent from 5.35 percent.

The recession and rising unemployment pushed the card industry's U.S. losses to a record of 11.49 percent in August, as measured by Moody's Investors Service. JPMorgan Chase & Co., the biggest U.S. card lender, reported yesterday its credit-card unit had a $700 million third-quarter loss, its fourth straight, and the deficit may widen to $1 billion in the first period of 2010.

Discover dropped 15 cents to $16 a share at 9:13 a.m. in early New York trading.