I had a sneaky feeling this would happen sooner or later. Months ago, Citibank started to

1. remove caps on balance transfer fees on some of their credit cards.

2. Raise the maximum balance transfer on some cards to as high as $250.

However, there was still one card where they offered a 0% APR teaser for 12 months on balance transfers and new card holders did not have to pay any balance transfer fee. That card was the Citi Professional Cash Card

Well, that card no longer offers any 0% deals for balance transfer. They switched it to 0% for purchases for 12 months.

Hence, right now, all of Citibanks’ consumer cards that offer up to 0% balance transfer deals have no caps on their balance transfer fees. Furthermore, their minimum balance transfer fee is only $5.00. So if you are looking to do a balance transfer, do not apply for any of Citi’s consumer cards.

Having said that, they have left their student credit cards unscathed! I supposed students do not have the dough to pay the balance transfer fees! So you could still apply for a Citi student credit card and get a balance transfer deal. But it is only for 6 months and not the usual 12 months.

With this new development, it looks like I have to update my balance transfer credit card list. But the great choices for balance transfer deals among consumers are dwindling. Perhaps another sign of the credit crunch.

A while back, lots of credit card issuers offered consumers 0% APR teaser deals for balance transfers. The hoped that once consumers switched cards, it would be hard to leave. But they found out that consumers were savvy and changed cards to did the balance transfer hoping around! What made matters worse was that they waived any balance transfer fee and offered 0% deals for 12 months.

Slowly, credit card issuers stopped waiving the balance transfer fee. They would cap it at $50 or $75. Then some like Citicards raised the cap on some cards to $250! Next, issuers like Citicards and Bank of America actually removed the caps on balance transfer fees. Presently, there is only one consumer credit card from the major issuer that still offers a 12 month 0% balance transfer deal with no balance transfer fee for the introductory offer.

That card is the Citi® Home Rebate Platinum Select® MasterCard®

However, this cozy deal will soon end. Citi will impose a balance transfer fee on this card from 15th February 2008 onwards - yes just a few more days. So if you are thinking of getting a 0% APR deal for 12 months without having to pay for any balance transfer fees, this may be your last chance in a while!

I will soon be putting up a list of the “best” balance transfer credit cards. Watch this space.

One of the ways to save on your credit card interest payment is to transfer your balance to a credit card offering a 0% APR teaser deal. This is a viable strategy debt reduction strategy if used carefully. But recently, issuers like Bank of America have removed the cap on the balance transfer fee. And guess what?

Citibank has just in the banwagen big time. Once again, they are changing their balance transfer fee policy quietly and secretly. As recent as 29th June, these four cards remained the only citi cards with no balance transfer fee for the introductory balance transfer offer. Well, I’m going to let the cat out of the bag here. Here are the latest changes (all for the worst).

Cit® Diamond Preferred® Card - In the past, they had the 0% APR deal for 12 months and no balance transfer fee. Last month, they gave themselves room to wriggle by having the choice of giving consumers either a 6 or 12 month deal depending on your credit. They then removed the cap for balance transfer fee, but kept their no balance transfer fee policy for the introductory period. Now, they have just dropped the latest bombshell. There is no a balance transfer fee and there is no cap on the BT fee!

This gets the ultimate thumbs down from me. I no longer recommend this card for balance transfers. In fact, I no longer recommend this card.

Citi® Upromise® Card - Once again, this card used to have no balance transfer fee for their 12 month 0% APR deal. They have now imposed a balance transfer fee. But unlike the previous card, they capped the balance transfer fee to $75.

Citi® Drivers Edge® Options Platinum Select® Card - Technically, this card has no balance transfer fee for their 0% 12 month balance transfer (according to their terms and conditions). However, the fine prints of their application page states that there actually is a balance transfer fee. Given Citi Card constant tweaking of their balance transfer fees, I’m simply not sure about this card any more.

Citi® Home Rebate Platinum Select® MasterCard® - This remains the only citicard today with no balance transfer fee for the 12 month 0% APR deal. But how long can this last? Update : 25th February 2008 - This card now charges a BT fee for the introductory offer.

Citi®Professional^SM Cash Card - This is now the only citicard that offers a 0% BT deal for 12 months and waives the balance transfer fee for the introductory offer. In fact, right now, this is the only card in the market with such a deal. Grab it while it last! Latest Update 5/2008 - Not only is there a balance transfer fee now, there is also no cap on it!

Bottom Line - I do not recommend anyt citi card if you want to get a 0% balance transfer deal. Instead I would recommend the following 3 cards (the few left that actually have the decency to put a cap on the balance transfer fee versus every other card on the market).

Advanta Platinum BusinessCard with Rewards - Probably the best credit card today for balance transfers - 15 months at 0%. It is technically a business credit card but you can still apply for it if you have no business. Simply replace EIN with your SSN and the Business Name for your name in the application and you will be treated as a sole proprietor.

Discover® More(SM) Card - Another alternative is the Discover® More(SM) Card which offers a 0% APR for 12 months.

Chase Platinum Visa® Card - Chase offers a 0% deal for up to 12 months. If your credit isn’t up to scratch, you will probably get less than 12 months.

In an extremely rare move, citi bank has actually reduced their APR on two of their student credit cards.

The standard purchase APR is being reduced from 17.99%(P+9.74) to 16.24(P+7.99) for the Citi® mtvU^TM Platinum Select® Visa® Card for College Students. The Citi MTVU Card is one of our favorite student credit card because you can earn reward points not just for spending on your card, but also for paying on time (to encourage responsible habits) and also for getting good GPA scores (encourages students to study hard). The reward points in their Thank You Rewards Program can also be used to reduce your student loan principal!

The standard purchase APR is being reduced from 17.99%(P+9.74) to 14.24(P+5.99) for the Citi® Platinum Select® Visa® Card for College Students. This is a basic credit card with no rewards, but the APR has been lowered even more.

The reduction in APR makes both of these cards one of the lowest APR student credit cards around. While I do not encourage students to get into credit card debt, this move to lower the APR comes as a surprise. I’m not sure if the effect will be to encourage students to carry their balance or will it simply make their cards more attractive without the negative side effects?

I recommend the Citi MTVU card highly and the Citi Platinum Select Card for College Student is a pretty good student credit card as well. Citibank does not require any income or co-signer to get their cards. If are looking for a student credit card, then this APR can only be good news (though I don’t encourage you to get carried away).

Related Posts

Citi MTVU Platinum Select Card Review

Citi Platinum Select Card for College Student Review

A few days ago, a reader sent me an email telling me about his experience with Citi ThankYou Network when he redeemed points for an airline ticket. He mentioned that rather than requiring just 25,000 points for a roundtrip flight from Salt Lake City to Miami, he had to cough up 38,000 points.

Well, I also got on to investigate whether Citi has made any changes to the program. It took a while, but I finally found some new information on the ThankYou website and after a few calls, I managed to clarify how the airline ticket rewards work. The new program allows you to redeem points in two ways : the Fixed Option (where you have to phone the Citi ThankYou Network agent) or the Flexible Option method, where you can book your flights online. The old program resembled more the fixed option method. This is how it now works.

Fixed Flight Options

The Fixed Flight Options is available to elite citi cardholders (which includes most of their reward cards). This option is the way most typical reward program (or at least the way they used to run it) are run. With this option, you require a fixed number of points to redeem for a free airline ticket. The number of points depends on your destinations. However with this option, you have to book your travel 14 days in advance, have a Saturday night stay and the tickets you get are restricted tickets.

Variable Flight Options

If you do not want to be bounded by the usual restrictions of having to book your tickets in advance and staying a Saturday night, then there is another option, called the Flexible Option. All of the ThankYou Online Booking and Variable Flight Options are run by Expedia (yes, the Expedia). With this option, you book your flights online and the points you need for your free airline ticket depends on the cost of your flight. So if you get a cheap flight, you may only need for example 18,000 points or 22,000 points rather than the usual 25,000 points for a standard US roundtrip flight. (But as in the case of our reader, he needed 38,000 points - I suspect that is because his flight must have cost more than $300). With this option, as long as the flight is available, you will get a seat. Hence, there are no blackout dates and no requirements to book in advance.

What if you do not get the flights you want?

As with most credit card reward program, you may not get the exact flights you want. That is because airline reserve their seats for different agents. They reserve some seats for ThankYou Network, some for Worldpoints, some for expedia and other travel agents. When ThankYou Network’s seat alottment is taken up, then you cannot use your thankyou points even though you can get that flight from another agent.

Citi claims that you can request the flight through the “Fullfill your wish” program where you can request a reward which is not presently available in the program. I have not tried this yet, so I cannot report on it’s effectiveness.

I just want to highlight this so that you are more aware of the finer details of the program. If you have Citi Reward Cards and have used ThankYou Network for free airline tickets, please share your experience.

Citi® Dividend Platinum Select® Card is now offering a promotion. New cardholders can earn 5% rebates for six months on purchases made at gas stations, supermarkets and drug stores, convenience stores, and utilities including cable for 6 months. After the promotion period, you will earn the normal 2% cash rebates for these categories. For other regular purchases, you earn 1% rebates.

Just to recap : This card has no annual fee and comes with a teaser 0% apr for 12 months offer.

For those who were always thinking about getting this card, this promotion may just get you going!.

Citibank is now offering a new cash back business credit card called the Citi Professional Cash Card. This is Citi’s foray into the cash back business credit card segment.

Like most cash back business credit cards, this one offers 3% cash back on business purchases like gasoline restaurants and office supplies (1% on regular purchases). You can earn up to $600 in cash rebates. Once you have earned $50 in rebates, you simply ask Citi to write you a check.

Cardholders will also be able to call a 24/7 business assistant (like a concierge service) to book your travel or dining arrangements.

There are other cash back cards like the Advanta Platinum BusinessCard with Rewards, or the American Express SimplyCash^SM Business Card, which pays 5% rebates on quite similar business expenses. But both these cards do not report to business credit bureaus like Dun and Bradstreet.

However, the all Citi business credit cards report to the business credit bureaus and help you build a credit history. If building a business credit history is important, then the Citi® Professional^SM Cash Card is defintely a card to consider.

I have also written a full review of the Citi Professional Cash Card here.

This is the second post I am making in the “Turn Back the Clock” series. As I reflect on my younger days, getting a second hand car was probably the best financial decision I have made.

We have all heard that cars are the worst investment you can ever make. Countless Financial Gurus like Suze Orman and even Peter Lynch in one of his books mentioned how getting a second hand car makes much more financial sense compared to getting a first car.

When I first graduated and got my first job, it seems that most of my classmates quickly got their first “brand new car”. They quickly saved for the downpayment and because they had pretty decent jobs, the swanky new car was one of the first big ticket item purchase that they made.

I actually resisted that temptation because my granddad always told him that properties are one of the best investments you can make and that I should be making that my priority. So while I did not have the latest wheels and gadgets, I just got a crusty old Toyota Corolla (BTW - I still have a Toyota Corolla today), which is perhaps one of the best second hand cars you can ever get. It never gave me any problems and it just went on and on without breaking down!.

One of the tricks that I did to get the best deal was to actually get a friend of mine who was familiar with cars (because his father used to sell second hand cars and because he was kind of a mechanic). He did the negotiations for me! (was very bad at that). He managed to get the seller to let us inspect the car and then managed to negotiate a well good price for me. He got a nice big meal as a thank you!

Over the next year after I got the car, all I had to change was the brakes. Everything else worked out fine for a long time because my friend had the car inspected. I think I probably paid about $1,500 to $2,000 (in cash) for the good old Toyota. In contrast, most of my friends paid that amount for a downpayment and continued to pay about $200 a month for their lease or loan payments. I sure saved a lot of money back in those days. One thing that I did not mention earlier is that I waited until one year into my first job before getting the new car (needed to save some money). If I were to do it all over again, I would still get a second hand car as my first car. This is what I did and would do to make sure I got the best deal.

1. Get someone (preferably someone who used to sell second hand cars) to negotiate for you. Buying a second hand car is very tricky because price variation could very imply quality variations.

2. Ask the seller to allow you to get an inspection. Get to know the mechanic well before you bring the car to him. The inspection required to pass the test for a second hand car sale is not very stringent. I had friends who had to spend $800 on suspension alone not long after they had bought their second hand car.

4. If I had my way now, I would apply for the Citi® Driver’s Edge® Platinum Select® Card or the Citi® Driver’s Edge® Card for College Students, earn rebates and use them to reduce the amount I pay on my car!

While reviewing the Citi ThankYou Redemption Network, I came across interesting feature in their reward program that allowed you to reduce your principal of your student loan. You can use the reward points you have earned to reduce your student loan. Below is a brief summary of this benefit (:

2500 points - $25
5000 points - $50
7500 points - $75
10000 points - $100
15000 points - $150
20000 points - $250
50000 points - $500
100000 points - $1000

As an example, you can redeem 10,000 points and get $100 that is used to reduce your student loan principal. This is the only credit card reward program I know off that actually has this reward feature.

For college students who want to prepay your loan principal while still in college, then you might want to consider the Citi® mtvU^TM Platinum Select® Visa® Card for College Students. It is a reward credit card based on the ThankYou Reward Program.

If you are not a college student but want to make use of this reward program to reduce your student loan principal, then these are other citicards to consider.

Citi® Professional^SM Card - This card allows you to earn 3 points for every dollar you spend on certain types of expenses. Great way to earn extra points.

Citi PremierPass^SM Card - Great card if you travel a lot as you can earn points on what you spend and on the miles you fly as well.

One of the juggling acts we have with our personal financial life is juggling our mortgage payments, our need to save for our kids college education and our need to save for our retirement. Yet we have only finite resources and income to fund these requirements. Where do our priorities lie?

My friend (let’s call him Mr X) recently confided in me about his mortgage payments. He has a mortgage that he is very comfortable with, but he wants to pay them off as quickly as possible. His accountant obviously has told him that you get tax deductions on your mortgage interests and that he should not be in a hurry in prepay it.

However, Mr X does not like the idea of being in debt. He had seen his parents get in debt troubles and close to financial ruin when he was a kid. It had left a sour taste with him and his attitude regarding debt. He had to take a mortgage when he bought his house because he did not have enough to pay for a house outright! As far as Mr X is concerned, he wants to be debt free (as in free of his mortgage burden) as soon as possible. Yet at the same time, he does realize that any extra cash that he pays to reduce his mortgage principal every month can be used to save for his retirement or his kids college education. His financial advisors have told him that saving for his retirement is very important and he knows he needs to set aside a certain amount every month for that and also his kids college savings. But Mr X told me he would sleep better if he knew his mortgage would be paid off in 10 years rather 20 years.

What should he do, he asked me? Well, my opinion is that if he sleeps better if he has a lesser mortgage burden, then he should make the extra effort to reduce his mortgage. I outlined the following alternatives to him.

1. Take some of your retirement savings and reduce your mortgage immediately. Pros - Mr X sleeps better and his mortgage burden is reduced. Cons - He is taking away his retirement savings from his no IRA or 401k account.

2. Allocate more money each month to repaying mortgage principal - Pros - he will pay off his mortgage faster. Cons - that money can be used for his retirement savings.

3. Cut his expenses even more! and use the extra savings for his mortage principal prepayment every month. Pros - he will pay off his mortage faster and his retirement and college savings plan is “on track” and unchanged. Cons - he has to live an even more frugal lifestyle.

I actually managed to persuade him to go for choice number 3 because that seems to make the most sense to me. I even adviced him to get the Citi® Home Rebate Platinum Select® MasterCard®. This card would allow him to earn 1% rebates which will be automatically used to pay off his mortgage principle every month. (talk about paying off your mortgage faster on autopilot!).

But this conversation I had with him led me to think that sometimes, the most financially sound advice may not be the right choice for a particular individual. In the case of my friend Mr X, he simply hates being in debt. Had he taken choice number 1 and used a portion of his savings to pay off his debt, you cannot really say that was the wrong decision. After all, that is why we call personal finance “personal”. It simply has to suit you, your particular circumstances and your personal values.

What would you have done if you were Mr X. Take part in this poll and share your comments with us.

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