Citi is offering some cardholders ‘Citi Flex Plan’. This gives cardholders the ability to make fixed monthly payments to pay off purchases or a loan against your card’s credit line. There are basically two ways to use this:
- Pay for eligible transactions under a Citi Flex Plan
- Use your credit line to access funds and pay for those funds under a Citi Flex Plan. These funds are made available to you by check or direct deposit
To put it simply it gives you the ability to use your credit card’s credit limit as a personal loan. The downside is that the interest rates are still absurdly high, the rate you receive looks to be individualized based on your credit risk. The letter a reader received shows an APR of 16.99%. This seems to be a bit similar to American Express’ Plan it feature or Chase’s Blueprint feature. It’s also an indication of traditional card issuers trying to get in short term loans (e.g U.S. Bank & Simple Loan).
My advice is that if you really need a personal loan, then you should just apply for a personal loan and make sure you do some rate shopping with local credit unions. You will almost certainly get a better offer than what Citi or any other major credit card issuer are offering you. It’s also important to try and avoid going into high interest debt unless it’s absolutely necessary. Falling into a cycle of debt is really hard to get out of due to these high interest rates.
