Citigroup doubles down on credit cards even as U.S. economy softens

Despite signs that the U.S. economy is slowing, New York-based Citigroup Inc is ...

Balance transfer envelopes are pictured in a Reuters office in New York, U.S., September 5, 2019. Picture taken September 5, 2019. REUTERS/Lucas Jackson

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. Credit card customers who use balance transfers are considered higher risk because they often use the easy financing to accumulate more debt, according to bank analysts and credit underwriters.

The strategy so far is paying off. Interest-bearing balances rose 10% in the second quarter versus the year-ago period. That growth helped boost overall profits on consumer lending by 9%.

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