Citi's No-Penalty, No-Fee Credit Card: What's the Catch?

Citi card
Citi card

We'd love to tell you if you qualify for the no-fee, no-penalty Simplicity credit card that Citigroup (C) announced Monday to much hullabaloo -- but we can't. We would if we could, mind you. Citi just wouldn't cough up the info. Ah, sweet mystery.

What we do know is that Citi is targeting household heads who "manage finances responsibly, but ... may miss a payment due date because of ... multiple demands," Anthony Merola, the executive vice president of Citi Cards, told DailyFinance on Monday.

As for the credit rating you'll need, Merola deferred to the company's policy of not commenting on what determines creditworthiness. An Associated Press story, however, cited a page that lists the Simplicity's qualification level at 720 or higher. That's a pretty shiny credit score.

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So what do you get for being a paragon of plastic-toting trustworthiness? The Citi Simplicity card charges no late fees, no penalty rate and has one single interest rate for purchases, balance transfers and cash advances. That eliminates the so-called "gotchas" that can inflate monthly statements.

What you don't get: Rewards or a break on the card's interest rate of 16.99%, which is nearly 2.6 points higher than the 14.40% card average. Merola said the higher percentage was a good price point for consumers who want peace of mind and no penalty worries. More than half of credit card holders have paid a bill late -- and the main cause was merely forgetting to submit the payment, according to a Citi release. Citi developed the card after a survey of customers put eliminating tardy charges at the top of their list. "It's just another example of Citi designing solutions to the simplify banking experience," Merola said to DailyFinance.

Sounds like an option for the fiscally prudent. But for those who frequently carry a hefty balance from one month into the next, the extra interest could complicate their Simplicity in a hurry.

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