Citi Diamond Preferred Rewards Card Review

This card offers generous rewards the first year. After that it's hard to tell.

• People who want to earn rewards points on their credit card spending.

Credit Rating Required

• Fair to Excellent (660+)

Pros

• Generous points bonus the first year.
• Points earned on purchases redeemable for merchandise, cash, gift cards and travel.
• Long introductory zero percent APR period on purchases and balance transfers (12 months).

Cons

• Value of points varies depending on which reward you choose.
• Abundance of rewards options may be overwhelming to some.

Rewards

• 6,000 Thank You points when you spend $300 within first three months, redeemable for a $50 retail gift card.
• Five points per dollar at supermarkets, drugstores and gas stations for first 12 months.
• One point per dollar on all other purchases.

APRs

• 0% for 18 months on purchases and balance transfers, then 11.99 to 21.99%, depending on your credit rating.
• Cash advance rate: 25.24%
• Default rate: 29.99%.

Fees

• No annual fee.
• Balance transfer fee: $5 or 3%, whichever is greater
• Cash advance fee: $10 or 5%, whichever is greater
• Late payment fee: up to $35
• Returned payment fee: up to $35
• Foreign transaction fee: 3%

The Citi Diamond Preferred Rewards Card offers generous rewards - at least at the outset. You earn 6,000 points in Citi's Thank You program - enough for a $50 gift card at participating retailers and restaurants - after you spend just $300 within the first three months. You also earn five Thank You points - five times the normal rate - for every dollar you spend at gas stations, supermarkets and drug stores during the first 12 months. You also earn one point per dollar on all other purchases.

That's an excellent start, but it gets murkier after that. Point values vary greatly, depending on which reward you choose, but mostly the points work out to a reward of less than one percent of spending, based on the one point per dollar equation. There is also a bewildering menu of rewards choices, ranging from music downloads to cash to airline tickets.

You can earn a maximum of 75,000 points each calendar year, and points expire after five years. If Citi terminates the program, you have only 90 days to redeem your points.

There is a long - 18 months - 0% APR period on purchases and balance transfers. The balance transfer fee is $5 or 3% of the amount, whichever is greater. After that, your APR will range from 11.99 to 21.99%, depending on your credit history.

This card is great - for the first year. You really need to study carefully the value of the reward you want and the points needed to get it. Usually the points are worth less than one percent of spending, less than what many cashback rewards cards pay.