Citibank has begun marketing a secured credit card aimed at Hispanic and Chinese immigrants, the company announced Tuesday.
The product, part of an effort to court the unbanked and immigrant communities, is meant as a bridge to an unsecured credit card, executives of the Citigroup Inc. unit said.
Customers must deposit $200 to $5,000 in an interest-bearing 18-month certificate of deposit to obtain a card. They are paid interest on the amount, which also becomes their credit limit.
Those who make payments on time for 18 months may be eligible for a traditional revolving credit card, according to Citi’s marketing materials. The variable interest rate on the card is currently 13.99%, and the card bears a $29 annual fee.
To be eligible to carry the card, consumers must be able to show $8,000 or more in annual income and a Social Security or Taxpayer ID number.
A Citi spokeswoman said the bank developed the card partly to offer as a companion product to its Access checking account, which offers ATM access and online bill payment but no checks. That account, too, was designed primarily for recent immigrants.
The card has been available at some bank branches in a pilot for some months, and the spokesman said it has proven very popular.
Though Citi has offered secured cards before —even Spanish-language ones — these were typically marketed to people who needed to repair a credit history. One card even let its holders earn American Airline frequent-flier miles, and was marketed to more affluent customers, the spokeswoman said. That card is no longer offered; the current card mainly targets people with no credit history.
Felipe Korzenny, a specialist in Hispanic marketing, said the card would probably go over well with new Hispanic immigrants.
“The Hispanic consumer tends to be loyal,” said Mr. Korzenny, a professor of advertising and integrated marketing communications at Florida State University in Tallahassee and a co-founder of the Hispanic research group Cheskin. “If you open the door when they are less prosperous, then they stay with you.”
A spokesman for Household International Inc., which got a secured card business in 2000 when it acquired Renaissance Holdings Inc. and its Orchard Bank subsidiary, said his company has been using the same marketing pitch for years.
“Our secured card is especially designed for consumers who either have no credit history, such as recent immigrants to the United States, or consumers who have blemished credit histories,” said Mark Friedlander in an e-mail. HSBC Holdings PLC bought Household last year.
