Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Citi simplicity card, you're pre-approved

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December 07, 2005

Citi simplicity card, you're pre-approved

Citi Simplicity card comes with rewards, "the treatment you deserved" line, promise to help and a great low variable rate of 10.99%. At least that is the offer I got today by mail.

Since we got few people asking about this card, we are spelling few details here:

Default APR is limited at 30.74%, meaning that once you fail to make payment, you exceed the credit limit, or your check bounces, your APR starts automatically increasing up to this 30.74%. How fast is not specified.

Late fee - that was the big deal that Citi Simplicity waives it. In reality it is a bit more confusing and here I am simply citing the offer: "Late fee waived as long as you make a purchase or cash advance (balance transfers do not qualify) in the same billing period that the payment is due. Otherwise, $15 on balances up to $100; $29 on balances of $100 up to $1,000; and $39 on balances of $1,000 and over."
So it seems that the Citi Simplicity card is simply designed to get a consumer to spend more dollars in a likely vain effort to evade late fees. At some point you have to stop. And as you struggle to buy more, what will be your default APR, the one that is limited at 30.74%? After all, being late is defaulting.

Then I tried analyzing these "unwaived" late fees. If your balance is $200 and you are late, $29 is 14.5%. Too high, doesn't make sense being late with such a small balance.
$39 on $1,000 balance is only 3.9%... am I correct ... yes, .. I .. am. So what the hell, you need to carry $5,000, then your $39 comes to meager .78%, I almost feel sorry for the CitiBank ... hell, I will be always late then, such a good deal!

The fee for going over the credit is $35. Plus as I suspect again a higher APR.

That is my take on the Citi Simplicity....

 
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