Citigroup has become the first major bank to institute restrictions on purchases on guns and accessories by its retail partners.  The move was announced in late March and reported here on TRS.

“Under this new policy, we will require new retail sector clients or partners to adhere to these best practices: (1) they don’t sell firearms to someone who hasn’t passed a background check, (2) they restrict the sale of firearms for individuals under 21 years of age, and (3) they don’t sell bump stocks or high-capacity magazines. This policy will apply across the firm, including to small business, commercial and institutional clients, as well as credit card partners, whether co-brand or private label.”  (Citi)

Bold move by the leading issuer of credit cards in America?

Or marketing ploy to differentiate themselves in the competitive market for tomorrow’s borrowers?

I think the latter.

A recent report from Sallie Mae indicates 56% of undergraduate college students have a credit card.  That’s almost double the rate from a few years back when credit was tighter.  43% of college students have a credit card and by 24, the percentage hits 71%.

Combine that with the fact that people in their 20s have the fewest number of cards than any other age group (the majority of cardholders in their early 20s have only one), and the race is on.  Whomever issues them credit first will likely have them to themselves for years, at the highest interest rates for the highest percentage of all age groups to only pay the minimum payment each month.

So what real impact will Citigroup’s policy changes have?  Not much.  Reuters admits that “the new rules could be seen as somewhat symbolic since they are unlikely to directly affect a large share of business at the bank” and several news articles about the policy pointed out how few Citi clients have anything to do with guns.  Citigroup’s own release admits that this move isn’t the solution, but they “want to do our part” – it used that phrase twice.

That’s why I think this all a big show for Citi designed to get the attention of young people who are looking for their first and for the next 5-10 years only credit card.  I think Citi saw marching young people and school walkout protesters and created a way to compete with other banks to be their credit issuer.

Companies of all kinds are competing for young markets through authenticity and social awareness.  It goes beyond the product and the brand – young people want to do business with companies that are “good” in their eyes.

Can it be long before these young marchers get a credit card solicitation from Citi promoting the fact that they joined their protest about gun legislation? I’m sure it will boldly proclaim that they “did their part” to help stop gun violence.  They’re the bank that cares about what young people care about.  Come charge up to the credit limit and make only the minimum payment and get socked with super-high interest while you have little assets or salary to pay this off anytime soon.  But we’re on your side…

Citi uses buzzwords from the news media not to improve public policy but simply to brand their business to the next generation of credit customers to use its bank and its cards.

Virtue signalling for profit.

And I bet it works, too.