Making the Most of Citi Simplicity

You'll know when you're making the most of the Citi Simplicity® Card — when it seems simple.

That's because the card's virtue lies in what it lacks: no rewards program to learn, no late fees or penalty interest rates, no interest for a year or more, an annual fee of $0. If you're exerting effort to optimize this card, you're doing it wrong.

Even so, some of the card's distinguishing features seem to subliminally whisper, "Don't worry. It's OK to be sloppy with your finances." It makes us nervous that the card could encourage bad money habits, so any strategy to maximize the Citi Simplicity® Card should involve not falling prey to them.

Use the interest-free period

If you’re a newish cardholder, one of the most valuable features of the card is its no-interest period. The card has an introductory annual percentage rate of 0% Intro APR for 21 months on Balance Transfers and 12 months on Purchases, and then the ongoing APR of 19.24%-29.99% Variable APR.

That 0% rate on transfers is available only to new cardholders, and transfers must be completed within four months of opening the account. You can't transfer balances from other Citi credit cards.

Note that there are interest-free periods not only for balance transfers, but also new purchases. That means the card could be ideal for charging an unexpected purchase you can’t pay for right away, such as a leaky roof or medical test. Interest charges kick in on any outstanding balance when your introductory period ends.

Note that any savings from the 0% period on transfers will be partially offset by the card's balance transfer fee of 3% or $5, whichever is greater. Note that this transfer fee is only applicable to balances transferred in the first 4 months. After that it's 5% with a minimum of $5. That fee gets more significant the larger the balance you transfer.

Pay on time, for your own good

If you pay your Citi Simplicity® Card bill late, Citi pledges not to charge late fees or hike your interest rate. That's a nice feature for the chronically forgetful, as the typical credit card late fee runs about $35.

That said, as a personal finance concept, it's important not to be seduced into keeping the card solely for that reason. Paying late can create bad habits in the rest of your money life. Other lenders aren't so forgiving.

And if you're late enough, it could damage your credit, even if there's no consequence from Citi. You could be reported to the credit bureaus if you fail to pay within 30 days, which will hurt your credit scores.

Consider moving on

Once the 0% APR period expires, the Citi Simplicity® Card becomes a bare-bones credit card. For some, making the most of this card might mean stashing it away.

If you don't carry a balance and seldom pay late, the Citi Simplicity® Card probably doesn't hold much allure. You'd be better off with a rewards credit card that gives you cash or points when you use it. If you switch to another card, though, keep your Citi Simplicity® Card account open and use it occasionally to keep it active. Closing accounts can ding your credit scores by reducing your available credit. There's no cost to keeping the card around because of its annual fee of $0.

Other features

If you want to dig deep into the card's trough of features, you'll find the usual collection of minor benefits. If you already have the card, you might as well use them.

For example, you can set account alerts and choose your preferred monthly payment date.