Citigroup is unveiling their newest credit card, simply called “Simplicity.” As its name suggests, the Simplicity card is designed for people with a lot on their plate who are looking for an uncomplicated line of credit that won’t ambush them with surprise fees or interest rate hikes. According to a statement released by Citi, there are absolutely no fee or rate increases for missing a payment or overspending your credit limit. There are also no annual fees.
“It lets them not have to worry that they’re going to be late on a payment. It provides some flexibility,”CEO of Citi Cards, Jud Linville, told the Associated Press.
Simplicity also applies a flat monthly interest rate to all transactions, including purchases, balance transfers, and cash advances. Because fewer than five percent of credit cards available to consumers come without late fees, and there are only eight percent that charge a single interest rate regardless of the transaction, the Simplicity card is rather unique.
Despite all of its appealing features, this card is not for everybody. It will only be offered to consumers with “excellent” credit scores of 720 or higher – the types of consumers that aren’t very likely to fall behind on their payments or charge over their credit limit – making them a relatively safe risk for Citi. For people that tend to carry a balance from month to month, the 16.99% variable APR of the Simplicity card may seem a little steep, especially considering that the average annual APR is somewhere around 14.40%. There are also no rewards programs associated with Simplicity, so consumers who have become attached to earning airline miles or cash back with every swipe may not be happy with this card’s lack of givebacks.
Rewards program or not, the uncommon perks Simplicity does offer makes it stand out from the slew of credit card offers being foisted upon the public. Banks have been bolstering their credit card operations, as evidenced by a report from the Federal Reserve claiming that consumer credit increased by $5.8 billion in May of this year.
Citi has been market-testing the Simplicity card for the past several weeks in an effort to gauge interest. Some expect it to be a big hit with consumers who are looking to spend less time worrying about any fees hiding in the fine print of their credit card agreements.