tuphat said:IMHO -- Sounds like a strategy by Citi to suck in unsophisticated/inattentive/desparate customers, who -- at best -- will wind up with a large balance in 2011 without the means to pay it off. Maybe good for some FWers, not so good for everyone else.LOL, but that goes without saying for just about EVERY CC deal you see posted here!

MarkM said: I think it is a serious oversight not to consider Citi's min payment is 3%/monthI agree than miminum payment levels are key here, esp for a deal of this duration. But my citi minimums are just 1% + finance charges per month (this is on a Dividends card). Can anyone confirm that this particular flavor of personal Citibank CCs has different terms requiring a 3% payment?In conclusion, this is how I see using this deal: as a pure 0% BT deal until 8/1/07, then as a likely gas/grocery/drug charge card for about 3 years afer that, til mid-2010. The worth during the final 18 months of the 0% purchase promotion will depend on if the current 5% rewards deals are still extant 4 years from now.Nicely put.

Edit I do think there's a strong case for ignoring the BT portion of the deal and going straight for the 0% on gas/groceries/drug component, especially for:

(a) those who make significant purchases in these categories;
(b) people who are already carrying substantial other CC debt;
(c) those who doubt that 5% cash bonuses will still exist 2-3 years from now.

I agree that this is an relatively intricate, yet very hot deal. I plan to sign up.

I didn't realize there is a BT promotion too. Wow. I agree with MarkM:

Take BT;
At end of BT pay off, and use for 0% apr purchases for ~ 2.5 yrs.
For the last 18 months or so, let the card idle and pay off in 2011.

This might get modified as cards come and go, but it is hard to plan for the future; and the card is being used to the fullest in the meantime.

purchase balance pmt deposit balance interest pmt profit
Aug-06__$675.00 $675.00 $20.25 $675.00 675.00 2.81 $20.25 $0.00
Sep-06 $675.00 $1,329.75 $39.89 $675.00 1,332.56 5.55 $39.89 $2.81
Oct-06 $675.00 $1,964.86 $58.95 $675.00 1,973.22 8.22 $58.95 $8.36
Nov-06 $675.00 $2,580.91 $77.43 $675.00 2,597.50 10.82 $77.43 $16.59
Dec-06 $675.00 $3,178.48 $95.35 $675.00 3,205.89 13.36 $95.35 $27.41
Jan-07 $675.00 $3,758.13 $112.74 $675.00 3,798.90 15.83 $112.74 $40.77
Feb-07 $675.00 $4,320.39 $129.61 $675.00 4,376.98 18.24 $129.61 $56.60
Mar-07 $675.00 $4,865.77 $145.97 $675.00 4,940.61 20.59 $145.97 $74.83
Apr-07 $675.00 $5,394.80 $161.84 $675.00 5,490.22 22.88 $161.84 $95.42
May-07 $675.00 $5,907.96 $177.24 $675.00 6,026.25 25.11 $177.24 $118.30
Jun-07 $675.00 $6,405.72 $192.17 $675.00 6,549.12 27.29 $192.17 $143.40
Jul-07 $675.00 $6,888.55 $206.66 $675.00 7,059.24 29.41 $206.66 $170.69
Aug-07 $695.25 $7,377.14 $221.31 $695.25 7,577.25 31.57 $221.31 $200.11
Sep-07 $695.25 $7,851.08 $235.53 $695.25 8,082.75 33.68 $235.53 $231.68
Oct-07 $695.25 $8,310.79 $249.32 $695.25 8,576.15 35.73 $249.32 $265.36
Nov-07 $695.25 $8,756.72 $262.70 $695.25 9,057.81 37.74 $262.70 $301.09
Dec-07 $695.25 $9,189.27 $275.68 $695.25 9,528.10 39.70 $275.68 $338.83
Jan-08 $695.25 $9,608.84 $288.27 $695.25 9,987.37 41.61 $288.27 $378.53
Feb-08 $695.25 $10,015.83 $300.47 $695.25 10,435.97 43.48 $300.47 $420.15
Mar-08 $695.25 $10,410.60 $312.32 $695.25 10,874.23 45.31 $312.32 $463.63
Apr-08 $695.25 $10,793.53 $323.81 $695.25 11,302.47 47.09 $323.81 $508.94
May-08 $695.25 $11,164.98 $334.95 $695.25 11,721.01 48.84 $334.95 $556.03
Jun-08 $695.25 $11,525.28 $345.76 $695.25 12,130.15 50.54 $345.76 $604.87
Jul-08 $695.25 $11,874.77 $356.24 $695.25 12,530.18 52.21 $356.24 $655.41
Aug-08 $716.11 $12,234.63 $367.04 $716.11 12,942.25 53.93 $367.04 $707.62
Sep-08 $716.11 $12,583.70 $377.51 $716.11 13,345.25 55.61 $377.51 $761.55
Oct-08 $716.11 $12,922.30 $387.67 $716.11 13,739.45 57.25 $387.67 $817.15
Nov-08 $716.11 $13,250.74 $397.52 $716.11 14,125.14 58.85 $397.52 $874.40
Dec-08 $716.11 $13,569.32 $407.08 $716.11 14,502.58 60.43 $407.08 $933.25
Jan-09 $716.11 $13,878.35 $416.35 $716.11 14,872.03 61.97 $416.35 $993.68
Feb-09 $716.11 $14,178.11 $425.34 $716.11 15,233.76 63.47 $425.34 $1,055.65
Mar-09 $716.11 $14,468.87 $434.07 $716.11 15,587.99 64.95 $434.07 $1,119.12
Apr-09 $716.11 $14,750.91 $442.53 $716.11 15,934.99 66.40 $442.53 $1,184.07
May-09 $716.11 $15,024.49 $450.73 $716.11 16,274.96 67.81 $450.73 $1,250.47
Jun-09 $716.11 $15,289.87 $458.70 $716.11 16,608.15 69.20 $458.70 $1,318.28
Jul-09 $716.11 $15,547.28 $466.42 $716.11 16,934.76 70.56 $466.42 $1,387.48
Aug-09 $737.59 $15,818.45 $474.55 $737.59 17,276.49 71.99 $474.55 $1,458.04
Sep-09 $737.59 $16,081.49 $482.44 $737.59 17,611.51 73.38 $482.44 $1,530.03
Oct-09 $737.59 $16,336.63 $490.10 $737.59 17,940.04 74.75 $490.10 $1,603.41
Nov-09 $737.59 $16,584.12 $497.52 $737.59 18,262.28 76.09 $497.52 $1,678.16
Dec-09 $737.59 $16,824.19 $504.73 $737.59 18,578.44 77.41 $504.73 $1,754.25
Jan-10 $737.59 $17,057.06 $511.71 $737.59 18,888.72 78.70 $511.71 $1,831.66
Feb-10 $737.59 $17,282.94 $518.49 $737.59 19,193.30 79.97 $518.49 $1,910.37
Mar-10 $737.59 $17,502.04 $525.06 $737.59 19,492.38 81.22 $525.06 $1,990.34
Apr-10 $737.59 $17,714.57 $531.44 $737.59 19,786.12 82.44 $531.44 $2,071.56
May-10 $737.59 $17,920.72 $537.62 $737.59 20,074.72 83.64 $537.62 $2,154.00
Jun-10 $737.59 $18,120.69 $543.62 $737.59 20,358.33 84.83 $543.62 $2,237.64
Jul-10 $737.59 $18,314.66 $549.44 $737.59 20,637.13 85.99 $549.44 $2,322.47
Aug-10 $759.72 $18,524.94 $555.75 $759.72 20,933.40 87.22 $555.75 $2,408.46
Sep-10 $759.72 $18,728.91 $561.87 $759.72 21,224.59 88.44 $561.87 $2,495.68
Oct-10 $759.72 $18,926.76 $567.80 $759.72 21,510.88 89.63 $567.80 $2,584.12
Nov-10 $759.72 $19,118.68 $573.56 $759.72 21,792.42 90.80 $573.56 $2,673.74
Dec-10 $759.72 $19,304.83 $579.15 $759.72 22,069.38 91.96 $579.15 $2,764.55
Jan-11 $759.72 $19,485.41 $584.56 $759.72 22,341.91 93.09 $584.56 $2,856.50
Feb-11 $759.72 $19,660.56 $589.82 $759.72 22,610.16 94.21 $589.82 $2,949.59
Mar-11 $759.72 $19,830.47 $594.91 $759.72 22,874.27 95.31 $594.91 $3,043.80
Apr-11 $759.72 $19,995.27 $599.86 $759.72 23,134.38 96.39 $599.86 $3,139.11
May-11 $759.72 $20,155.13 $604.65 $759.72 23,390.63 97.46 $604.65 $3,235.50
Jun-11 $759.72 $20,310.19 $609.31 $759.72 23,643.16 98.51 $609.31 $3,332.97
Jul-11 $759.72 $20,460.61 $613.82 $759.72 23,892.09 99.55 $613.82 $3,431.48
Aug-11 $782.51 $20,629.30 $618.88 $782.51 24,160.33 100.67 $618.88 $3,531.03

ShaftSlinger -- I don't see where taxes are taken into account.

Adding an additional calculation (which hopefully is accurate, though it is early in the morning, so this is provided without warranty of any sort):

I assumed that you'd get this CC in August and use it until the end of 2010 (since if you use it in 2011 this is less than 5% on rewards). Of course the rewards percentages and interest rates may all change to result in changing this number (i.e. if interest is > rewards then you want to stop using it later). This also assumes that the amount you spend doesn't go up (though it probably will). Thus, you will have 65 months till 2011 of which the card will be used for 53.

There's another complication that I realized after running this initially. No one here has incorporated compounding of interest on rewards. So I added that in also. It's not too much, but it does add in a few hundred (which can make a big deal).

For the first 53 months with this card:
Each month, the CC balance increases by monthly purchases
The savings balance is increased by (savings annual interest/12)%
The savings balance increases by monthly purchases
The savings balance and CC balance decreases by 3% of the old CC balance

For the last 12 months with this card:
The savings balance is increased by (savings annual interest/12)%
The savings balance and CC balance decreases by 3% of the old CC balance
Add rewards percentage of monthly spending to rewards balance
If rewards balance > $50, rewards balance = 0 and savings balance is increased by existing rewards balance

For all months without this card (this assumes unlimited rewards, but with the numbers I'm using you don't need more than 1 or 2 cards with $300 limit):
Add rewards percentage of monthly spending to rewards balance
Savings balance is increased by (savings annual interest/12)%
If rewards balance > $50, rewards balance = 0 and savings balance is increased by existing rewards balance

There is some inaccuracy in this since usually interest is compounded daily, which is why a 5% APY is obtained from a 4.88% interest for example, but its close enough.

Interest rate: 5%
Monthly purchases: $300
Max CC Balance: 8009.78
Cash Back with card: 1612.78
Cash Back without card: 1110.28
Difference: 502.50

Interest rate: 5%
Monthly purchases: $600
Max CC Balance: 16019.55
Cash Back with card: 3225.56
Cash Back without card: 2229.71
Difference: 995.85

Interest rate: 7%
Montly purchases: $300
Max CC Balance: 8009.78
Cash Back with card: 2351.69
Cash Back without card: 1171.31
Difference: 1180.38

Interest rate: 7%
Monthly purchases: $600
Max CC Balance: 16019.55
Cash Back with card: 4703.38
Cash Back without card: 2356.14
Difference: 2347.24


My opinion based on this is that how good this deal is depends greatly on how interest rates go in the next 5 years. If interest rates go above 5%, this is great. You can see how much the interest rate going from 5 to 7 affects how much money you'll get. If interest rates go below 5, there's no point to use this. But I still haven't made up my mind on whether I should get this or not (since the rewards are not huge unless interest rates go up, and there are many risks).

Levitan, your $3225.56 is similar to Shaft's amount. Did you take into account taxes?

To give some additional thoughts on this, I don't think a 5% interest rate is enough to make this worth it with all the possible things that could go wrong. Furthermore, the most you'd get with these kinds of purchase amounts is $2000 over 5 years while tying up a lot of credit if you make a lot of purchases, the interest rate goes to 7%, and you have very low taxable income (which is hard). If anything I would consider getting this as a 0% card for a year and as an insurance policy in case rewards cards are eliminated.

Here's another question/comment: This card has no rewards if I understand correctly. If you apply for it, am I correct in assuming that a switch into Diamond Preferred rewards would kill the 0% apr? If you could do that, you would get both rewards and 0% apr simultaneously and would be (in my opinion), an amazing deal.

I love these discussions, but I think y'all are thinking far too much.

1) It's a 0% BT for a year with no fee. You don't need any other reason to apply for and get the card.

2) It's a Citibank card. Some other card comes along with better offers some future year, just transfer your credit limit to that card. Makes that NEW card so much better! Citi lets you do that.

3) It's not a question about whether this card is better or worse than another card. If you can get more or other 0% BT cards, go for it. Why wait? Why try to predict what will be available years from now? 0% BT cards are gifts; they're profitable now. You don't have to choose. Get as many of those suckers as you can.

4) You don't micromanage these things. You don't add up grocery/drugs purchases each month and put the total into a savings account. What you do is view your money as a big pot. You manage it all as best you can. If you have this card after the BT period is over, try to use it only for those special category purchases. Since the interest is 0% on those purchases, pay just above the minimum each month. The result is that you will have more cash. I presume you're putting every spare bit of cash into some sort of investment anyway instead of a sack under your bed, so this will make the amount you have available to invest a bit larger. No harm spending some of it either. You're computing taxes on interest? If that's a concern, look for a tax free investments. No reason not to put some of the extra money into stocks or bonds or futures or options or FOREX, depending on what you've decided your investment tactics over the years should be and what your risk levels are.

5) If for whatever reason your expectations about your own finances or the economy or alternative places for your money prove to be wrong years from now and the card is unattractive, then just don't use it. No big deal. No harm done. And you've still made a nice profit on that balance transfer offer.