Citi Simplicity Card Citibank Now You Can Avoid The Late Fees

Citibank recently launched a new credit card that takes away an important sting felt by many consumers: late fees. In an unusual move, the bank now offers consumers "permanent remission" for late payments and cease to assess the usual $ 39 late fee when a payment arrives after the due date. Let's take a look at what that the credit card issuer is really offering with its new card.

The problem

Consumer advocates have long protested when it came to the late fees credit card and penalties. Not only you will be assessed the fee once late from $ 29 to $ 39 if your payment arrived late, but your interest rate could be permanently increased to the default rate, typically as high as 29% year.

Citibank solution

In a bold marketing move, Citibank - one of the largest issuers of credit cards in the world - has come up with its Citi Simplicity card in response to criticism levied by consumer advocates in the industry and the bank personally. The new card, with no annual fee and no late fees, is designed for card holders who have been bitten by the bug of late fees. With the Citi Simplicity card, a payment arriving late will be credited and no late fee assessed.

Closer Look

In offering Citibank are a few things you should understand before making the change:

1. Late fees will be charged to your account, but your interest rate can increase default rates. The default rate, in this case, can be as high as 29%! That's bad news for you, especially if you had a fixed low rate previously.

2. For example, systematically forwarded late payments can become part of your credit report, which adversely affects their ability to buy a car or a house on the road at a favorable interest rate. Importantly, the higher interest rate can add thousands of dollars to buy a new home.

3. Finally, Citibank will waive the late fee only if you promise to keep using the card. In all, the Citi Simplicity card has much more than what meets the eye. For some people, the new card is a welcome change, especially if you are the one paying your balance in full each month. If you are not, the Citi Simplicity card may cost you more in the long run. If you fall into this second category, it would be better for you to keep your existing card or buy a new card with other features and more favorable requirements.