A balance transfer is an excellent way to begin digging out of high-interest credit card debt, as long as you can use it responsibly. These deals should only be utilized if you’re going to be aggressively paying off existing debt and not charging new purchases to the card.
The Citi® Diamond Preferred® card intro balance transfer offer is 0% interest for 21 months. It comes with a balance transfer fee of 3 percent (or $ 5 minimum), whichever is greater.
- No Annual Fee
- 0% intro APR for 21 months: The long zero percent introductory APR period paired with no annual fee is by far the biggest selling point of the Citi® Diamond Preferred® card. Without the power of compounding interest working against you, getting your principal debt balance down becomes much more manageable.
- The card also comes with Citi® Identity Theft Solutions, which offers protection from fraud with zero liability on any unauthorized purchases.
- Balance Transfer Fee: But before you discount this offer due to the fee, do the math. Often times you’ll still end up saving hundreds or thousands even with a balance transfer fee.
- Limited Rewards Program: The additional perks associated with the Citi® Diamond Preferred® card are limited. The primary purpose of the card however is to utilize the promotional intro rate to save on interest, not to cash in on extras.
- Foreign Transaction Fee: Use your Citi® Diamond Preferred® card outside the US and you’ll get hit with a hefty three percent fee on every purchase.
What Do I Need to Qualify?
First, you need to be rolling your existing credit card debt from a non-Citi card. This option is not eligible for people who already have debt with a Citibank credit card.
In general, people with credit scores of 700 or higher stand the best chance of being approved for a credit card. There are other factors that go into the decision-making process, so a 700 score or higher doesn’t guarantee you a spot. However, you can check to see if you’re pre-qualified for Citi cards to minimize your chance of rejection. You can do this without affecting your credit score by going to this site.
Who is it best for?
If you’re currently carrying debt on cards with high APRs or if your introductory zero percent rate is about to expire, the Citi® Diamond Preferred® card can provide a solution for extended interest free debt repayment.
Looking Out for the Fine Print
- 3 percent fee (or $5 minimum) on balance transfers, whichever is greater
- Balance transfers must be completed within 4 months of account opening to benefit from intro APR promo
- 29.99 percent variable penalty APR
- Late/ Returned Payment Fee: Up to $35
- Cash Advance Rate: Up to 26.24% (variable)
- Cash Advance Fee: 5% ($10 minimum) whichever is greater
Cardholders should note that late, missed, or returned payments, even in the introductory promotional period, can result in a variable penalty APR of up to 29.99 percent effective immediately. In other words, one payment error can cost you to lose the promotional rate and stick you with a high APR indefinitely.
This penalty policy is not unique to the Citi® Diamond Preferred® card. Late and missed payments should be avoided regardless of which credit tool you utilize as the consequences are expensive and cost you the entire benefit of the introductory promotional APR you signed up for in the first place. On top of all of that, late and returned payments are subject to fees of up to $35. Pay on time and in full to avoid those high costs.
The grace period on the Citi® Diamond Preferred® card is 23 days – even after the intro APR expires; that means you have 23 days to pay down your balance to avoid accruing any interest. The only exceptions to the grace period are balances transfers performed after the first four months of account opening and cash advances, which begin accruing interest from the date of the transaction. The variable APR for cash advances is currently 26.24 percent.
In addition to higher APR, cash advances are subject to a fee of either $10 or 5 percent of the cash advance, whichever is greater. Balance transfer fees are $5 or 3 percent of each transfer, depending on which is greater; and foreign transaction fees come in at 3 percent of each purchase transaction (in US dollars).
How it Compares to the Competition
While a 21-month intro period is appealing, a three percent balance transfer fee on a large amount of debt can present a significant cost. If you were to roll over $10,000, you’d pay a $300 fee. Keep in mind, if you left $10,000 on a card at a 15 percent and paid $300 a month, it would cost you $3,016 in interest alone and it would take 44 months to pay off.
Put $10,000 at a balance transfer card at 0 percent for 21 months with a 3 percent fee, and you’d only pay $614 in interest and fees. The debt would be paid off in 36 months.
If you’re on the other end of the spectrum and would prefer a longer promo period, consider the Santander Sphere® card. While the balance transfer fee is a higher 4 percent, the zero percent APR lasts for a full two years.
Citi Diamond is Competitive, But Not the Best Offer
The Citi® Diamond Preferred® card presents a low cost solution for those looking to pay down debt in a 21-month time frame. The rewards are limited and fees on foreign transactions and cash advances are less than ideal, but for the primary purpose of the card, paying down debt without crushing interest, the Citi® Diamond Preferred® card offers a good deal with a long, leisurely time frame.