“What people have missed is … [credit] card usage has actually gone up,” Corbat said in a wide-ranging interview with “Mad Money”host Jim Cramer on Wednesday.
“Sure, Amazon has benefited, but other online retailers benefit [too],” argued the CEO of one of the nation’s top credit card issuers. “Today, only about 20 to 30 percent of purchases in stores happen on credit cards. About 100 percent [of purchases] happen online with credit cards. So we benefit from that. And if you think of our partners — Home Depot and American and Costco and all of those — we’ve definitely got to benefit from that.”
Even with those tail winds from the increased use of plastic, Citigroup last week lowered its forecast for returns on branded credit cards. Citi CFO John Gerspach attributed the change to rising interest rates and the bank’s Costco-branded card bringing in more revenue and income but with a lower return.
However, on Tuesday, Citi executives expressed a positive outlook for profit growth at Citigroup’s first investor day since the 2008 financial crisis.
Programming note: Watch Citigroup CEO Michael Corbat’s entire interview on “Mad Money” with Jim Cramer tonight at 6 p.m. ET.
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Source: Tech CNBC
In a world according to Amazon, we love the shift from cash to plastic, says Citigroup CEO