Citigroup, the third-largest U.S. card issuer, according to payments industry publication The Nilson Report, 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. That is currently the longest 0per cent deal in the industry, according to consumer finance company Bankrate LLC. Rivals offer 15 interest-free months with no fee.
"Just recognizing where we are in the credit cycle, it's interesting to see Citigroup doubling down and pushing forward," said Moody's analyst Warren Kornfeld.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.
Anand Selva, the bank's head of consumer strategy, said he expects the business to continue picking up steam. Bank of America Corp and JPMorgan Chase & Co , two of the biggest card lenders, have grown their businesses by prioritizing affluent consumers over people already carrying credit card debt, according to analysts.Citigroup has leaned more on its card business since the 2007-2009 financial crisis. The bank required three government bailouts when its U.S. subprime mortgage business turned toxic and caused it to shrink its portfolio to stem losses.
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