The Citi Diamond Preferred Card is what personal finance professionals call a no-frills card. There are no associated rewards or exciting perks you’re eager to brag to your friends, and the cards are fairly simple in design.
Of particular note, however, is the lack of a rewards program. After all, everyone loves a rewards card—59% of U.S. adults have at least one in their wallet. So why would anyone settle for a “no rewards” card like Citi Diamond’s first choice?
Rewards credit cards aren’t for everyone
At first glance, getting cash back or buying the points you need may seem like a no-brainer. What could go wrong?
“Credit card bonuses are great, but only if you can pay your credit card bill in full to avoid interest,” said Ted Rossman, a credit card analyst at Bankrate. “Otherwise the math won’t work.”
It’s easy to see why. Credit cards charge more than 18% interest on average — but the typical cash-back yield on most purchases is only 1% or 2%. So if you have a balance, the cashback you get won’t make a big difference.
“If you have credit card debt,” Rothman said, “the best thing to do is to prioritize your interest rate. If you signed up for a 0% balance transfer card, that rate clock could be off for months.”
“I am very happy with the admission”
Chaim Geller, founder of HelpMeBuildCredit.com, still talks fondly about the Citi Diamond Preferred. “I was happy to get an 18-month 0% APR credit card, which was the offer at the time,” Geller said. Citi Diamond Preferred now includes 21-month balance transfers and 0% introductory APR discount on 12-month purchases (15.99% to 25.99% variable APR thereafter).
Before getting the Citi Diamond Preferred, Geller used another credit card with a 20% interest rate, which was brutal.
“When I was buying a house,” recalls Geller, “I had a lot of credit card debt to buy the building. I noticed that when I made the minimum payment, most of my money went into interest. , but the real debt hasn’t been reduced much.”
Making monthly minimum payments is a surefire way to let your debt snowball and spiral out of control. If you have a monthly balance, remember to always pay as much as possible, Geller advises. No matter what minimum you pay, it can save you thousands of dollars in the long run.
Way out of debt
At one point, Geller felt he could no longer ignore his mounting credit card debt. He started looking for a way to end the situation once and for all, and he found the Citi Diamond Preferred. Back then, the introductory APR offer for account transfers was 18 months — but that was all he needed.
He sat down and made a plan. He would apply for the card, transfer the balance, pay off the debt during the introductory period, and never have a balance again.
“I finally had the opportunity to reduce my credit card balance without interest,” Geller said. “And I don’t want to mess it up. I love the Citi Diamond Preferred because my payments are entirely on actual debt. I’m finally able to control my credit card debt, which is a lifesaver!
Be disciplined when withdrawing your balance
Geller stressed the importance of being disciplined when handing over the balance. You should be careful not to incur any new debt when paying off your balance, as interest on your unpaid balance will be due as soon as your 0% APR period ends.
Currently, the Citi Diamond Preferred offers an introductory APR for 21 months of deposit transfers and 12 months of purchases (after that, a variable APR of 15.99% to 25.99%). While it may be tempting to take advantage of introductory APRs to make new purchases, there are downsides to doing so. If you buy something new — especially a high-priced item — you may further increase your debt as you try to pay it off.
Geller believes in keeping things simple. During APR’s introductory period, he used the Citi Diamond Preferred to pay off debt and use cash or other credit cards to pay for daily expenses. He also made sure to pay it off every month.
If you don’t need 21 months, there are other cards with lower fees
The Citi Diamond Preferred balance transfer fee is 5% (or $5, whichever is higher). This fee is on the high side; 3% seems to be more common. If you don’t need 21 months to pay off your debt, there are many balance transfer cards with lower balance transfer fees than this card.
“When I applied for the Citi Diamond Preferred, the offer was 18 months,” Geller said. “I know it might take me this long to get out of debt. But if 12 or 15 months is enough for you, you can [save money by choosing a card] and pay lower transfer fees.”
Is the Citi Diamond Preferred a goalie?
Geller hasn’t paid off his debt in years, but he has no intention of giving up the card, even though he’s not interested in the basic benefits the Citi Diamond Preferred offers.
“If a card has no annual fee, I’m usually happy to keep it open so I can build credit,” explains Geller. “But I’ll just use it less from time to time to keep it active because it doesn’t pay anything and has no valuable benefit.”
Final result
The Citi Diamond Preferred Card is not available for cash back or rewards hunters. It won’t help consumers get into luxury airport lounges or give them cell phone service. In the right circumstances, however, it can save a lot of money by offering 21 months interest-free on debt that other cards might incur at high interest rates.
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