FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person * Corley Kathryn McNamara   2. Issuer Name and Ticker or Trading Symbol Discover Financial Services [DFS] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) SVP,General Counsel&Secretary (Last) (First) (Middle) 2500 LAKE COOK ROAD 3. Date of Earliest Transaction (Month/Day/Year) 07/02/2007 (Street) RIVERWOODS, IL 60015 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 07/02/2007   A   78,889 (1) A (2) 90,768.39 (3) D   Common Stock 07/02/2007   A   107,690 (1) A $ 0 198,458.39 (3) D   Common Stock               2,119.01 (4) I By ESOP

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Underlying Securities (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Employee Stock Option	$ 12.13	07/02/2007		A		4,001		(5)	01/02/2009	Common Stock	4,001	(7)	4,001	D
Employee Stock Option	$ 20.47	07/02/2007		A		11,293		(5)	01/02/2010	Common Stock	11,293	(8)	11,293	D
Employee Stock Option	$ 22.24	07/02/2007		A		13,015		(5)	01/02/2011	Common Stock	13,015	(9)	13,015	D
Employee Stock Option	$ 19.41	07/02/2007		A		11,011		(5)	01/02/2012	Common Stock	11,011	(10)	11,011	D
Employee Stock Option	$ 14.49	07/02/2007		A		25,886		(5)	01/02/2013	Common Stock	25,886	(11)	25,886	D
Employee Stock Option	$ 18.87	07/02/2007		A		21,459		(5)	01/02/2014	Common Stock	21,459	(12)	21,459	D
Employee Stock Option	$ 18.94	07/02/2007		A		30,043		(5)	01/02/2008	Common Stock	30,043	(13)	30,043	D
Employee Stock Option	$ 26.68	07/02/2007		A		6,537		(6)	12/12/2016	Common Stock	6,537	(14)	6,537	D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Corley Kathryn McNamara 2500 LAKE COOK ROAD RIVERWOODS, IL 60015			SVP,General Counsel&Secretary

Signatures

/s/ Simon B. Halfin as Attorney-in-Fact for Kathryn McNamara Corley		07/05/2007
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Restricted stock units that are convertible into shares of common stock at a ratio of 1 to 1.
(2)	These restricted stock units were granted by the issuer in replacement of 26,852 restricted stock units of Morgan Stanley in connection with the spin-off of the issuer by Morgan Stanley (the "Spin-Off").
(3)	Includes shares of common stock acquired in the Spin-Off.
(4)	These shares of common stock were acquired in the Spin-Off.
(5)	This option is fully exercisable.
(6)	This option vests in two equal annual installments beginning on December 12, 2008.
(7)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 1,362 shares of common stock of Morgan Stanley at an exercise price of $35.65.
(8)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 3,844 shares of common stock of Morgan Stanley at an exercise price of $60.14.
(9)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 4,430 shares of common stock of Morgan Stanley at an exercise price of $65.34.
(10)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 3,748 shares of common stock of Morgan Stanley at an exercise price of $57.03.
(11)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 8,811 shares of common stock of Morgan Stanley at an exercise price of $42.56.
(12)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 7,304 shares of common stock of Morgan Stanley at an exercise price of $55.45.
(13)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 10,226 shares of common stock of Morgan Stanley at an exercise price of $55.64.
(14)	In connection with the Spin-Off, this option was granted by the issuer in replacement of an option to purchase 2,225 shares of common stock of Morgan Stanley at an exercise price of $78.40.

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