Citi has tapped into the frustrating experience for most credit card customers who find themselves slapped with surprise fines and fees that are often tucked away in the fine print.
The latest card keeps it simple for borrowers by doing away with the litany of fees and multiple interest rate charges that is typically associated with cards. There will be no late fees or rate hikes if you miss a payment or go over your credit limit, no penalty rates and no annual fees, according to a Citi statement.
There will also be only one single interest rate that is applied to all transactions from purchases to cash advances. If you are wondering where the catch is, the rate, wait for it, is a variable APR (annual percentage rate) of 16.99%, higher than the average of 14.40% according to Bankrate.comAccording to cardhub.com, the card is being issued to those with an excellent credit score of 720 or more- the kind of borrowers who do not fall behind on their payments anyway and therefore rarely have to pay late fees or bear penalty rates. Still, it is a brilliant marketing gimmick. Few borrowers seem to pay attention to the interest rate. If they did, they would pay their bills on time and carry as little balance on them as possible. Banks have been ramping up credit card operations despite a languishing economy as consumers continue to rack up debt. Consumer credit increased by $5.08 billion in May, according to the Federal Reserve. --Written by Shanthi Bharatwaj in New York
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