Citibank have an exclusive TV only offer running currently with an amazingly low 2.9% interest on their credit card. The advertisement starts off with the bloke asking rhetorical questions about how much interest you are paying currently – 19%, 20%, 21% or more and you’re meant to gasp in shock. He then proceeds to tell you that Citibank offer a low interest credit card with only 2.9% interest and you’ll also receive a long list of additional benefits when you sign up.

Offering a cheap credit card is fine, in fact I like it as hopefully an average consumer could save a few dollars. However, the nature of the advertising makes it seem so good that it nearly can’t be true and when you read into the details – it is too good to be true in my opinion and is nothing but greasy advertising.

As I mentioned above, it starts off by comparing your current high interest rate credit card to the excellent 2.9% low interest rate credit card from Citibank. Throughout the commercial, the Citibank guy keeps reinforcing the low interest rate for their cheap credit card but conveniently doesn’t emphasize or reinforce the catches and caveats. I suspect that the average consumer would infer that the Citibank credit card offers 2.9% interest – period. Citibank state that the 2.9% is only for new customers, only on the transferred amount and that it is for 18 months. However, the manner in which the conditions are advertised forms such a small component of the selling that it is misleading in my opinion.

The average person doesn’t read the fine print, which is now taken into account by the fair trading authorities throughout Australia. If you did care to read the fine print on the Citibank TV commercial, it states that cash advances and retail purchases on the credit card are charged at 20.74% per annum. Hang on a cotton picking minute, at the start of the TV commercial he was bagging your existing credit card company because they were charging you a high interest rate over 19% – pot meet kettle.

The deal is so good, you could nearly think they are doing you a favour by allowing you to sign up. You’re intrigued by the pitch so you go to their site and read a little more, only to find out that there are terms on the repayments for it as well – you’re 2.9% transferred debt is cleared first. That might seem fairly inoccuous to start with, however if you continue to use your credit card after moving to Citibank – you’re new purcharses are charged at 20.74% with 55 days interest free. That essentially means that you’re not paying off your new purchases until you’ve cleared the 2.9% interest debt, thus maximisng the opportunity for Citibank to make more money from you.

As the saying goes, there is no such thing as a free lunch and the cheap credit card offer from Citibank just proves it. From what I can see with the deal, a consumer’s best option is to take Citibank up on the deal for their existing credit card debt and not making any or very limited additional transactions. If you took that route, you’d receive the benefits of the 2.9% interest on the transferred amount for the first 18 months and none of the pitfalls.