NEW YORK—Citigroup is closing down unused credit card accounts as a growing number of customers fall behind on their payments, according to a new report.
The bank, which is one of the biggest issuers in the country, has also increased its capacity for collecting bad debts as part of its efforts to manage losses, Chief Financial Officer Mark Mason told Bloomberg.
That effort has also included decreasing customers’ credit-card limits if they aren’t using them and tightening underwriting to ensure new accounts go to customers with higher credit scores, Bloomberg added.
“We’re watching the intent to pay very closely,” Mason told the news outlet. “We’re constantly monitoring and managing this.”
A ‘Common Playbook’
Bloomberg reported that banking giants like Citigroup tend to follow a “common playbook” when they start to see signs that consumers are struggling to keep up with their bills.
“With moves like proactive credit line decreases or shuttering unused accounts, banks are trying to avoid becoming a customers’ lender of last resort right as they’re facing trouble,” Bloomberg said.