Discover to offer $500 million of stock

NEW YORK (Reuters) - Credit card issuer Discover Financial Services (DFS.N) said on Monday it will offer $500 million of common stock and may also issue senior notes in the near future.

The fourth-largest U.S. credit card network also estimated net charges of 8.5 percent to 9 percent in the third quarter.

Discover's stock fell 7.8 percent after the bell. It had closed up 36 cents, or 3.6 percent, at $10.50 on the New York Stock Exchange.

The Riverwoods, Illinois-based company will grant underwriters a 30-day option to purchase up to an additional 15 percent of the shares offered to cover over-allotments, if any, it said in a statement.

J.P. Morgan Securities Inc is acting as sole book-running manager for both the common stock and proposed senior notes offerings.

(Reporting by Sweta Singh; Editing by Richard Chang)