The future of credit cards is almost here.
The Citi Forward Visa is probably what it looks like. At least on a good day.
Everything changes on Feb. 22, when most of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 takes effect.
It bans many of the industry’s most abusive practices, and card companies have been acting out ever since it was passed — jacking up rates, slashing credit limits, raising fees and imposing tough new repayment terms.
That has turned the Forward card, which was a good but not outstanding offer when it was introduced last spring, into one of the better deals of this brave new world.
Citi has risen to the top of the heap by simply leaving most of the Forward card’s terms unchanged over the past year.
It still has, for example, no annual fee. Most new credit cards come with one since the new laws don’t regulate annual fees.
Cardholders start out with seven months of 0% financing on purchases and balance transfers, which is a little better than the typical six-month no-interest offers these days. (Ignore the “0% APR for 6 months” on the Citi Forward homepage. It is seven months as stated on “terms and conditions.” We checked.)
When the introductory period ends, the card charges an adjustable rate that’s 14.24% APR (prime plus 10.99%). That was a little high last spring, but it’s quite competitive now.
If you stay under their credit limit and pay your bills on time for three straight months, Citi will lower your interest rate by 0.25%.
Do it again and Citi will whack another 0.25% off your rate up to eight times for a total reduction of 2 percentage points.
The card also allows you to earn points in Citi’s “Thank You Redemption Network” — 5 points for every $1 spent on dining, books, movies and music; and 1 point for other purchases.
The extra rewards for entertainment spending indicate that Citi wants to attract younger consumers to the Forward card. That’s good, because they’re the ones having the toughest time finding a good deal on credit cards right now.
You can get 6,000 bonus points for making a modest $250 in purchases in the first three months, and another 5,000 points if you sign up for paperless statements.
Points can be redeemed for cash, a credit on your statement or gift cards.
The redemption rate — 10,000 points for a $100 gift card — means you’re getting a run-of-the-mill rebate of 1% on most purchases, and 5% on your entertainment spending.