Home>Newsroom>12 October 2004 Media Release - 12-10-2004 Newsroom Citibank launches card that matches interest rate to spend Sydney, 12 October 2004: Citibank has challenged the credit card market by introducing an innovative card featuring an interest rate determined by a customer's spending patterns. Julian Potter, Director of Credit Cards for Citibank, said the Citibank Clear Card enabled customers to determine the interest rate from one of five tiers, depending on how much they spend on retail purchases. "The Citibank Clear Card offers all the benefits that other low rate and low fee product offerings do but differentiates itself by rewarding customers for their loyalty to the product, by putting them in control of their interest rate," said Mr Potter. "We are not encouraging customers to spend more, but challenging them to spend differently". "Credit card customers are used to being rewarded for spend through reward points. By consolidating all their credit card purchases onto the Citibank Clear card, those consumers who value low interest rates above reward points can now be rewarded for their spend as well". "From November, customers will also be able to have up to four family members as additional cardholders on the same account. This will mean that the ability to benefit from a lower interest rate is made easier with the combined spend going towards determining what the interest rate will be for that account and will apply for all cardholders on that account". "We have also structured our low 4.9 per cent p.a. balance transfer rate to apply on balances transferred for the life of the balance, not for a set period," he said. All customers start on an 11.99 per cent p.a. interest rate for purchases and cash advances in the first six months irrespective of whether they transfer a balance or not. At the end of each six month period, a review is conducted on a customer's spend and an average calculated to determine the interest rate that will be set for the following six month period. Tiers start from a low 9.99 per cent p.a. The tiered interest rates based on spend over six months are as follows: INTEREST RATE FOR SIX MONTHS AVERAGE SPEND PER MONTH 9.99% p.a. $3,001 plus 11.99% p.a. $1,501 - $3,000 12.99% p.a. $751 - $1,500 13.99% p.a $251 - $750 14.99% p.a. Up to $250 Mr Potter said: "We have undertaken extensive research to ensure that the product we brought to market differentiated us in a competitive space and enabled us to respond to a customer need". "What we have seen is that customers are reassessing what they value when it comes to a credit card. They are not changing their existing motivators, rather they are taking the time to consider their options. "The low rate, low fee card, non reward points market is a segment that we have not previously targeted and our customers can now make a choice around perceived value when they make a credit card decision". "This is an exciting opportunity for us and provides us with a growth platform for the credit card business based on product diversification". "The Citibank Clear Card has been called clear because it is transparent - both in the physical look of the card and through the structure of the interest rates". "With this product launch we are taking transparency to another level through the introduction of a new feature on all marketing materials. In an industry first, we will be including a table of the key fees and charges associated with the card on our marketing material so that customers can make an informed decision before they apply," said Mr Potter. Key features of Citibank Clear Card include - Varied interest rates dependent on retail purchases over a six month period (start on 11.99% p.a.) $39 annual fee Additional cards are free - additional cardholder spend is added to the primary card spend Up to four additional cards can be associated with the one account Low balance transfer rate of 4.9 per cent p.a. for the life of the balance Interest free up to 55 days No rewards points or frequent flyer program Credit insurance available AN EXAMPLE OF HOW THE CITIBANK CLEAR CARD WORKS: Using the example in the table below, if a customer applied and was approved for a Citibank Clear Credit Card in January, their interest rate from January - June would be 11.99 per cent. As the average spend for this period was $1,808, the interest rate on the card would remain at 11.99 per cent for July - December. The average spend for July – December increased to $3,016 therefore the interest rate would be reviewed and 9.99 per cent would apply from January - June the following year. Retail spend does not include cash advances or balance transfer amounts. MONTH SPEND MONTH SPEND January $1,500 July $2,500 February $1,250 August $3,500 March $1,500 September $2,500 April $2,500 October $2,000 May $4,000 November $4,500 June $1,500 December $3,100 Average $ $1,808 Average $ $3,016 Interest rate 11.99% Interest rate 9.99% Further information on the Clear card and details of the terms and conditions, fees and charges that apply are available at the Citibank website located at www.citibank.com.au. For media enquiries: Please E-mail: newsroom.australia@citigroup.com Citigroup (NYSE: C), the preeminent global financial services company has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life and Annuity. Additional information may be found at: www.citigroup.com

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