Citi has unveiled a revamped version of its
Simplicity card.
The bank said it would not charge any late
fees or penalty interest rate.
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But the card’s 16.99% interest rate is way
above the market average of 14.4% and although Citi is known
for offering the best rewards programme in the US, the card does
not feature any loyalty incentives.
The bank is emphasising the card’s lack of
penalty and late payment fees, however, and Citi Cards CEO Jud
Linville flagged the card up as one that is simple and that allows
flexibility with “an upfront, transparent fee that’s a little bit
higher.”
Citi did not reveal details of the eligibility
requirements for the card, but existing Simplicity Card customers
will have to check if they qualify for the new card either way.
According to a Citi Simplicity Survey, one in five consumers
have paid a bill after its due date in the past year and 61% said
it was simply due to forgetting the repayment date.
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By GlobalData
Ample marketing opportunity
Late fees were thus the primary reason for
concern for card holders.
These findings, coupled with the growing
awareness of card fees among consumers, should provide ample
marketing potential for Citi.
The bank is marketing the card with the
statement, made by Linville, that “every busy life needs a little
simplicity”.
The revamped version of the Simplicity Card
allows the cardholder to be flexible with the due date and adjust
it according to their financial needs. There will be an option to
demand reminder alerts via e-mail or text message.
Citi has continued to generate strong earnings
from its cards division. Its
net income from Citi-branded cards soared from $470m in the
first half of 2010 to $1.83 billion by the end of June.
The release of the card coincided with the
sale of Citi’s UK online mortgage and savings subsidiary
Egg.
