This is not the first time that Citigroup has tried a simplified credit card. It launched the Simplicity card several years ago and tried to make a splash with its no-fee approach to overdraft fees, late fees and annual fees. The card was discontinued of course, but since then the world has changed. The credit card industry in some ways is undergoing some seismic shifts, and the time apparently is right for Citigroup to give it another shot.

It has added what it hopes will prove to be a compelling feature: A zero percent introductory interest rate for 21 months, which is long by industry standard. Afterwards, the bank will charge a variable annual interest rate of 17 percent that will not change due to a missed payment. The rate is higher than the average 14.4 percent currently. But other card plans tend to charge rates based on a schedule that can penalize people for low credit scores, giving them even higher rates. Missed payments and the like can also trigger rate increases.

According to various media reports, Citigroup is limiting the Simplicity card to end consumers with credit score of 720 and higher. TheStreet.com calls this a "brilliant marketing gimmick." In the aftermath of the credit card reform battles, it seems like more banks would have embraced this approach. It may be that the appeal will be limited to those who (1) really understand the ins and outs of credit cards (few and far between) and (2) just happen to have a high credit score but also (3) some reason to think they'll have trouble meeting future payments. That's a rather limited market.

For more:
- here's the article

Related articles:
Banks gear up for Basel III surcharge fight  
American Express launches low-fee prepaid card