NEW YORK—Despite signs the U.S. economy is slowing, Citigroup is betting big on credit cards.
Citigroup, the third-largest U.S. card issuer, has been among the most aggressive promoters of zero-interest balance transfers. For a small fee, customers can move debt from a rival card onto Citi's plastic and pay no interest for 21 months, stated Reuters.
“That is currently the longest 0% deal in the industry,” Reuters said, citing Bankrate data. “Rivals offer 15 interest-free months with no fee.”
The card business now accounts for nearly one-third of Citigroup's overall revenue and is one of the biggest potential drivers of future earnings growth.
“But some analysts and investors worry this portfolio could become a liability if the economy goes south,” Reuters said.