Citigroup is getting slaughtered in their credit card division. They put up an additional $500 million towards future chargeoffs (reserves), their net income dropped another 1%, and I believe their overall net revenue dropped 4% due to credit card losses except they also sold a subsidiary which netted them a net profit for the year, but it's hocus pocus reporting tricks. Credit card losses were up 36% or more over 2016's results.
A bunch of credit analysts and bloggers are calling the end of 2% cards (general spend) which I think is probably likely in the prime tier categories, whereas the subprime and middle credit lenders like Synchrony are likely seeing a benefit out of their 2% Paypal card mostly because subprime and middle credit borrowers think they're making out on 2% cards but are charging more than ever and carrying balances where one month's interest wipes out the cashback.
Citi is too focused on high FICO borrowers and this is going to smack them into the wall they deserve to run into (my opinion). You can't chase top prime borrowers and expect to profit anymore. It doesn't work that way now that credit scoring has been gamed so well thanks to the internet and millions of data points.
To be honest, the one feature I would absolutely love would be a high cashback secured credit card where the secured balance earns the same as high yield savings after a period of on time payments or something. Let me deposit $100,000 into a high yield CD or something earning 1.5% and give me 2% cashback on that secured card. The bank has almost zero risk, so it can focus on the rare interest paid by some borrowers, and come close to breaking even on swipes versus rewards.
I don't need unsecured credit, I need access to the merchant processing network but I would honestly pay cash if I could get a big discount. Let me back up my own credit card limit with cash, and I'd be happy to gice the bank middleman 0.25% on each transaction at most.
