One of the most common New Year’s resolutions is to pay down debt. Rewards-earning credit cards may not be optimal for those carrying balances and thus more impacted by 18% interest rates than a relatively puny 2% back on purchases.
Our partner Citi offers the Citi Simplicity® Card, which is uniquely suited for those that want to transfer higher rate balances to a long 0% intro period while also offering some “accident forgiveness insurance”. The highlights:
- The ONLY card with No Late Fees, No Penalty Rate, and No Annual Fee… EVER
- 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the variable APR will be 15.24%-25.24% based on your creditworthiness*
- There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater
- The same great rate for all balances, after the introductory period
- Save time when you call with fast, personal help, 24 hours a day – just say “representative”
- Enjoy the convenience of setting up your own bill payment schedule on any available due date throughout the month
No late fees, no penalty rate details. On most other credit cards, if you make a late payment, you’ll first be charged a late payment fee of about $35. On top of that, your super-low interest rate disappears and instead gets jacked up to something called their “default rate” or “penalty rate”. This is often close to 30% APR! The Citi Simplicity card adds a bit of flex in that they do not charge penalty rates or late fees.
Note that if you are 30 days late on this or any credit card, Citi will still report this activity to the credit bureaus. This card may be forgiving but you’re still trying to pay down debt and keep your credit score as high as possible. (Before the Credit CARD Act of 2009, there was something called “universal default” where you could be subject this penalty if you were late on another credit card. This is not longer allowed.)
The strong part of this card is the long 21 month period, so you can spread out payments over 1.75 years and ideally pay it all off by the end. There is a 3% balance transfer fee ($5 min). However, if you’re currently paying 18% APR, then 3% works out to 2 months of interest over a 21 month period. Once the intro period on all 0% cards expire, the rates will go right back up. You’ll either need to pay it off or transfer your balance again if you need more time. This card lets you spread your payments out over 21 months instead of 6 or 12 or 15.
If you know you will pay it off within a shorter time period, look for a card with no balance transfer fee. Compare with other low fee 0% APR balance transfer offers.
In terms of rewards structure… this is not that type of card. The Citi Simplicity does not earn any cash back, points, miles, or free toasters. I’d open a separate card for rewards after your balances are paid off and you join the “Paid in full every month” club. It does include certain purchase benefits such as Citi Price Protection (price drop protection on brick and mortar purchases) and free Extended Warranty (extends manufacturer’s warranty for up to 12 months).
Bottom line. The Citi Simplicity® Card is a card targeted that for those serious about paying down their balances. You get a 0% introductory period of 1.75 years on both purchases and balance transfers, with a one-time 3% balance transfer fee ($5 min). The card includes consumer-friendly features that help ensure your low rates don’t get hiked. If you do the math and can make adequate payments to pay down your balance over a span 1.75 years, this card may help get you debt-free with minimal gotchas. No annual fee.
- Citi Simplicity® Card application page
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