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Citibank recently launched a new credit card that takes away an of import sting felt by many consumers: late fees. In an unusual move, the bank is now offering consumers “permanent forgiveness” for late payments and will no longer measure the customary $39 late fee when a payment gets after the owed date. While the offer sounds great on surface, if you delve a small deeper you will soon learn that there are some things about the new Citi Simplicity card that tin cost you more than money in the long run. Let’s take a near expression at what this credit card issuer is really offering with its new card.

The Problem

Consumer advocators have got long cried disgusting when it have come up to credit card late fees and penalties. Not only would you be assessed a 1 clip late fee ranging 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% annually. This “double whammy” additional made it hard for you, the credit card holder, to ever pay down debt.

Citibank’s Solution

In a bold marketing move, Citibank – one of the largest issuers of credit cards in the human race – came up with its Citi Simplicity card in response to unfavorable judgment levied by consumer advocators at the industry and at the bank personally. The new card, with no annual fee and no late fees, is designed for card holders who have got been bitten by the late fee bug. No longer will you, as a card holder, have got to worry if the check you sent off just before the payment owed day of the month arrived on time. With the Citi Simplicity card, a late arriving payment will be credited and no late fee assessed.

Taking a Closer Look

Within Citibank’s offer are a few things that you should understand before you do the switch:

1. A late fee will not be charged to your account, but your interest rate may surge to the default rate. The default rate, in this case, can be as high as 29%! That’s bad intelligence for you especially if you had a fixed low rate previously.

2. You could also get a false sense of security by incorrectly believing that paying late regularly doesn’t harm you in some other ways. For instance, consistently forwarded late payments can go portion of your credit report, thereby negatively affecting your ability to purchase a car or a home down the route at a advantageous interest rate. Important to note, a higher interest rate can add thousands of dollars to the purchase of a new home.

3. Finally, Citibank will relinquish the late fee only if you assure to go on to utilize the card. This is bad intelligence for you especially if you are trying to reduce your balance each calendar month without having to purchase something new, which simply adds to your balance.

In all, the Citi Simplicity card have much more than to it than what rans into the eye. For some people, the new card is a welcome change especially if you are one who pays off his balance in full each month. If you aren’t, the Citi Simplicity card may cost you much more than in the long run. Should you fall into this second category, it would be better for you to maintain your existent card or store for a new card with other characteristics and more than advantageous requirements.

Copyright 2006 Erectile Dysfunction Vegliante. Free online reissues of this article are allowed provided the resource box stays integral with a unrecorded nexus back to http://www.credit-card-surplus.com.