Archives for January 30, 2018

Citi Simplicity Card Review: 0% for 18 Months (1.5 Years), No Late Fees, No Penalty Rates

CitiSimplicityCard (1)One of the most common New Year’s resolutions is to pay down debt. Rewards-earning credit cards paying 2% on purchases barely make a dent when you are paying a whopping 18% interest in your balances.

Our partner Citi offers the Citi Simplicity® Card, which is uniquely suited for those that want to transfer higher rate balances to a long 0% intro period while also offering some “accident forgiveness insurance”. The highlights:

  • The ONLY card with No Late Fees, No Penalty Rate, and No Annual Fee…EVER
  • 0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 15.74% – 25.74% based on your creditworthiness
  • There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
  • The same great rate for all balances, after the introductory period
  • Save time when you call with fast, personal help, 24 hours a day – just say “representative”
  • Enjoy the convenience of setting up your own bill payment schedule on any available due date throughout the month

No late fees, no penalty rate details. On most other credit cards, if you make a late payment, you’ll first be charged a late payment fee of about $35. On top of that, your super-low interest rate disappears and instead gets jacked up to something called their “default rate” or “penalty rate”. This is often close to 30% APR! The Citi Simplicity card adds a bit of flex in that they do not charge penalty rates or late fees.

Note that if you are 30 days late on this or any credit card, Citi will still report this activity to the credit bureaus. This card may be forgiving but you’re still trying to pay down debt and keep your credit score as high as possible. (Before the Credit CARD Act of 2009, there was something called “universal default” where you could be subject this penalty if you were late on another credit card. This is not longer allowed.)

The strong part of this card is the long 18 month period, so you can spread out payments over 1.50 years and ideally pay it all off by the end. There is a 5% balance transfer fee ($5 min). However, if you’re currently paying 18% APR, then 5% works out to 3 months of interest over a 18 month period. Once the intro period on all 0% cards expire, the rates will go right back up. You’ll either need to pay it off or transfer your balance again if you need more time. This card lets you spread your payments out over 18 months instead of 6 or 12.

If you know you will pay it off within a shorter time period, look for a card with no balance transfer fee. Compare with other low fee 0% APR balance transfer offers.

In terms of rewards structure… this is not that type of card. The Citi Simplicity does not earn any cash back, points, miles, or free toasters. I’d open a separate card for rewards after your balances are paid off and you join the “Paid in full every month” club.

Bottom line. The Citi Simplicity® Card is a card targeted that for those serious about paying down their balances. You get a 0% introductory period of 1.5 years on both purchases and balance transfers, with a one-time 5% balance transfer fee ($5 min). The card includes consumer-friendly features that help ensure your low rates don’t get hiked. If you do the math and can make adequate payments to pay down your balance over a span 1.5 years, this card may help get you debt-free with minimal gotchas. No annual fee.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

Historical IRA Contribution Limits 2009-2018

ira_heartIndividual Retirement Arrangements (IRAs) are way to save money towards retirement that also saves on taxes. Each year, an individual’s total contributions to both traditional and Roth IRAs cannot be more than a certain dollar limit. If you are age 50+ at some time during the year, you can also contribute an additional amount. (You can’t contribute more than your taxable compensation for the year.)

Note that there are also income restrictions on Roth IRA contributions, although you may be able to get around these income restrictions with a Backdoor Roth IRA (non-deductible Traditional IRA + Roth conversion).

If your income is low enough (less than $63,000 AGI for married filing joint), the Saver’s Credit can get you back 10% to 50% of your contribution (of up to $2,000 per person) when you file your taxes.

Since I enjoy visual aides, here’s an updated historical chart and table of contribution limits for the last 10 years. I’m happy to say that we’ve both done the max since 2004. Have you been taking advantage of your potential IRA tax break?

ira_limits_2018

Year IRA Contribution Limit Additional Catch-Up Allowed (Age 50+)
2009 $5,000 $1,000
2010 $5,000 $1,000
2011 $5,000 $1,000
2012 $5,000 $1,000
2013 $5,500 $1,000
2014 $5,500 $1,000
2015 $5,500 $1,000
2016 $5,500 $1,000
2017 $5,500 $1,000
2018 $5,500 $1,000

 

Also see: 401k, 403b, 457, TSP Historical Contribution Limits 2009-2018

Sources: IRS.gov, IRS.gov COLA Table [PDF]

Khan Academy: Free Educational App of The Day

khanapp0Khan Academy is a non-profit with a goal of offering a free, world-class education to anyone, anywhere. I noticed that Khan Academy was the iTunes App of the Day yesterday (Android link), and I found that they have definitely made a lot of improvements since the last time I used it. There seem to be more interactive questions and the app interface is much cleaner. I remember when it was just a bunch of videos. The iPad app now includes handwriting recognition.

I would say the content focus is still on the K-12 level and college prep. Khan Academy covers everything from counting to alegbra to computer science to world history. In fact, they are now the official practice partner for Advanced Placement (AP) tests. They also offer free SAT test prep (MCAT, GMAT too + LSAT coming soon) along with college admissions assistance. Yes, they even have a section on personal finance! All free with no ads. Check it out if you haven’t recently.

more information

ry-diplomer.com/diplomy-v-kaluge