Citi announced the launch of a revamped Simplicity card, targeted at consumers seeking more forgiving pricing. On one hand, the card delivers the simplicity its name promises:
Citigroup on Monday plans to launch a credit card that marries a trio of perks – no late fees, no penalty rate and a single interest rate for purchases, balance transfers and cash advances.
The revamped Simplicity card will be marketed to those who are juggling busy schedules and want a credit card with simple terms, said Jud Linville, CEO of Citi Cards. “It lets them not have to worry that they’re going to be late on a payment. It provides some flexibility,” he said.
On the other hand, the card may not be for everyone, as the pricing model does have two important compensating elements:
One of the biggest drawbacks is the card’s 16.99 percent interest rate. That’s higher than the average rate on the market of 14.40 percent last week, according to Bankrate.com, which tracks financial data. So if you’re prompt with payments but tend to carry a balance, a low interest rate is likely a bigger priority than the perks offered by Citi’s new card.
The Simplicity card also doesn’t offer any rewards, which can be a deal breaker for some. Or it may turn out you won’t qualify for the card. Citi declined to specify what type of credit background is required. But CardHub.com, which lets consumers search and compare card offers, lists the Simplicity card for those with “excellent” scores of 720 or higher.
Both consumers and regulators are focused on the transparency of credit terms in the wake of the 2009 CARD Act Apparently, Citi’s test marketing results for the card indicate consumer receptivity to this streamlined offering.