Late payments less costly with Citi credit card
Citi recently commissioned a poll to find out more about Americans’ bill-paying habits. It did so to promote one of its Citi credit cards, which, it says, was “designed to provide a simplified credit experience and alleviate the frustration of late fees.” Besides promising not to levy those fees, Citi also says it won’t charge penalty rates to those who pay late — but both those offers apply only to those with this one particular card: the Citi Simplicity® Card.
Late payments common
The survey, conducted in April, found some interesting statistics. Fifty-nine percent of respondents said they’d paid one or more bills late at some point in their lives. No surprise there — except, perhaps, that it’s so few. What’s more startling is that 88 percent of those who have ever done so had made a late payment within the previous 12 months.
Credit cards and late payments
About 40 percent of respondents to Citi’s poll said they’d been late making a credit card payment at least once. Half had been tardy with a utility bill, and 44 percent with a cellphone or other telephone account. When asked what had caused late payments, only 42 percent said it was down to a lack of money. The most popular reason was forgetfulness (61 percent), while 39 percent said they’d been too busy with other things.
According to FICO, the company whose scoring system is behind nine in 10 lending decisions, your payment history (mostly the promptness with which you settle your accounts) is the biggest single determinant of your credit score, and is responsible for 35 percent of the entire calculation. To explore the potential seriousness of that, see Don’t let credit report errors ruin your life, which includes a section on the costliness of a poor score in terms of future borrowing rates and employment prospects.
Maybe the forgetful should set up reminders, and the busy make time. Both could try using automated payment services. And while you get into your new routine of paying bills on time, the Citi Simplicity card could be a great tool to help you get a hold of your credit card bill without the penalty of late fees.
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