Do you know what U.S. bank has the highest dollar volume of domestic credit card loans on its books? If you said 4-Star rated CitiBank N.A., SD then you’re right. Based on June 30, 2018 financial data CitiBank has $129 billion in credit card loans, followed by 4-Star Bank of America, N.A., NC, which has $95 billion.
Neither CitiBank nor Bank of America are designated as a “credit card bank” by the FDIC because credit cards represent less than a quarter of their respective total loans. There are currently only 12 U.S. banks with the credit card designation (listed on page 2); each has well over 50% of its loans dedicated to plastic.
Regardless of its designation, a visit to CitiBank’s website yields an extensive selection of credit cards from which to choose. Some have zero percent introductory rates, but most carry purchase rates ranging from 15%—25%. While Citibank’s credit card loans represent just 20% of total loans, they account for 97% of their consumer loans. In fact, there is a good chance you have one in your wallet right now.
There is nothing wrong with that. We just don’t want you to overlook your other options.
For example, your local community bank (or credit union if you’re a member) could be your best bet when shopping for a credit card.
On page 7 we’ve provided a list of the 50 community banks with the highest volume of credit cards. Some were included on last week’s list as having the highest dollar volume of consumer loans, but most were not.
The majority of these community banks are recommended by Bauer (rated 5-Stars or 4-Stars); all offer personal service.
5-Star Nicolet NB, WI, for example, had a 44% increase in its credit card balances between June 30, 2017 and June 30, 2018. It did not acquire any banks in that time-frame, so we went to its website to see how it was growing them. Nicolet NB offers three choices: 1) a rewards card that offers 1% cash back on all purchases with no annual fee and an interest rate of prime +10.9%; 2) a bonus Rewards card that offers more rewards but carries a $50 annual fee. The interest on this card ranges from (prime + 6.9% APR) to (prime + 18.9% APR); and 3) a low-rate card (2% lower than the bonus rewards card) with no rewards and no annual fee.
All three choices include an introductory period of 7 billing cycles with zero interest.
Disclaimer: We are not advocating that you apply for a credit card from Nicolet NB. We just want you to get the best deal, and your local community bank (or CU) could have it.
Credit card balances at ALL U.S. banks increased 7.4% during the 12 month period ended June 30th. However, balances dropped 5.2% at community banks. This could be an indication that community banks are being overlooked or it could be that customers of community banks are doing a better job of paying down credit card debt than customers of non-community banks.
Note: 4-Star American Express NB (below) acquired its affiliate American Express Bank, FSB in April 2018, resulting in the dramatic (166%) growth in its credit card loans.