September 16, 2010
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News: Citi Reports Confusing
As expected, Citibank reported high credit card defaults in August. In the company's monthly regulatory report, write-off's increased to 11.18 percent from 9.75 percent the previous month. To the general public, it's difficult to know for sure what that really means. Last month the bank announced that they had made an error in the calculation of their July credit card defaults. At that time, they believed they had counted July's defaults twice. An adjustment was made for the error in August. However, Citibank now says that no adjustment was necessary and they would revising those numbers. The company did not indicate when those numbers would be announced. In the meantime, the bank continues to work o changing its image by targeting more prime credit cardholders.
Citi's reported credit card delinquencies of 30 days or more fell as well during August dropped significantly to 4.95 in August, down from 5.3 percent in July. The drop below 5 percent has been the first time in months since Citi's card early stage delinquencies have dropped below 5 percent. Delinquencies are important to note because early stage delinquencies are an indicator of future card defaults. Although several banks have not yet reported August's numbers, those that have report early stage credit card delinquencies have decreased.
Most recently Citibank announced that it will begin testing a new debit and credit card option called inControl that helps cardholders stay on track with their budget. The company will be the first credit card company in the U.S. to offer the service. Cardholders will also enjoy the added feature of an extended theft protection system. With inControl, cardholder will have the ability to set limits on a variety of spending. When doing so, it will cause any transaction that exceeds the specified amount to be declined. Initially, cardholders will only be allowed to set up the desired alerts; however, in time they will have the ability to set perimeters to decline transactions.