Key takeaways

  • Citi Flex Loans allow you to withdraw some or all of your available Citi card credit as a loan
  • Taking your funds as a Citi Flex Loan gives a fixed monthly payment and fixed interest rate until your loan is paid back in full
  • Citi Flex Loans offer a number of advantages, such as not requiring an additional hard credit inquiry, but you’ll need to run the numbers to make sure they make sense for your situation

Credit cards offer a convenient way to pay for everyday purchases, yet there are always situations where you may prefer cash. Now, Citi cardholders have the option of accessing both more readily through Citi Flex Loans.

The Citi Flex Loan program can be a useful alternative to running up a balance on your card for unexpected expenses or taking out a credit card cash advance. Cash advances typically require an upfront fee (normally 5 percent of the advance amount), and the money you borrow will begin accruing interest at a higher variable rate from day one with no grace period.

If you’re looking for a better alternative, Citi Flex Loans are worth exploring. Here’s how Citi Flex Loans work in practice, plus some tips to help you decide whether the program is a good option for you.

What is a Citi Flex Loan?

Citi Flex Loans and City Flex Pay are two programs that offer cardholders more flexible payment options and fixed terms through Citi’s Citi Flex Plans.

With a Citi Flex Loan, you can take out a loan on your eligible Citi card’s credit line at a fixed interest rate. You may decide how much you need to borrow and settle on a fixed monthly payment and fixed interest rate that lasts for the life of the loan without completing a separate application or credit check.

Citi Flex Pay, on the other hand, is a flexible payment plan for Citi cardmembers that allows eligible credit card purchases to be paid off over time with a fixed APR.

Both Citi Flex Loans and Citi Flex Pay are options available when you create a Citi Flex Plan., Citi’s program offering cardholders more flexible payment options and fixed terms.

How does a Citi Flex Loan work?

A Citi Flex Loan lets eligible Citi cardmembers convert part of their credit card account’s credit limit into a personal loan. You can pay your loan off in fixed monthly installments with both a fixed interest rate and fixed schedule (up to 60 months) so you know exactly when you’ll be free of debt. You can also customize these terms during the loan process.

Citi doesn’t charge any separate fees to get started besides your interest rate, although avoidable fees, like late fees associated with your account, may still apply. The minimum amount you can borrow with a Citi Flex Loan is $500, and the maximum depends on your income, credit limit and additional factors that apply when you request the loan.

Once you’ve completed the process, you can receive your funds via direct deposit in as little as one to two business days or request a paper check (which may take up to 10 business days to receive).

As you pay off your Citi Flex Loan, you won’t have to make an extra payment each month; the amount due on your account will include both your credit card’s minimum payment due as well as the fixed monthly payment for your Citi Flex Loan. You can choose to pay more than the minimum at any time, and there is no prepayment penalty applied if you pay your balances off early. You also will not earn credit card rewards on your loan.

How does a Citi Flex Loan affect your credit?

Taking out a Citi Flex Loan does have the potential to impact your credit score in a negative way. The loan increases your percentage of credit utilization, which makes up 30 percent of your FICO credit score, by increasing the total amount you owe. Experts suggest keeping your overall amounts owed below 30 percent of your available credit.

While increasing your credit utilization can harm your score, the most important factor that makes up your FICO Score is payment history, accounting for 35 percent. This means that you can work on improving your credit score by making timely payments in full each month. As your credit utilization drops, your credit score may also improve.

How to find out if you’re eligible for a Citi Flex Loan

According to Citi, cardholders can check to see if they’re eligible for a Citi Flex Loan by logging in to an online Citi account. Citi Flex Loan offers may be presented on your “Account Overview” page, or you may be able to view available offers by selecting the “Services/Credit Card Services” option at the top of the page.

You can also call Citi customer service to ask if you’re eligible for a Citi Flex Loan.

Advantages of Citi Flex Loan

  • You don’t have to apply for more credit; thus, there will be no hard inquiry on your credit report.
  • These loans don’t come with any fees, including the pricey origination fees some personal loans charge.
  • You may qualify for a reasonable APR that helps you save money over time.
  • You’re already in the Citi system and approved for a line of credit, so you won’t have to go through a lengthy process or fill out a full loan application to get started.
  • There are no hidden fees, including no prepayment penalties.

Disadvantages of Citi Flex Loan

  • You don’t earn credit card rewards, including cash back or rewards points, on Citi Flex Loans.
  • Citi Flex Loans may come with a higher interest rate than you could get with a personal loan.
  • Interest rates on Citi Flex Loans are definitely higher than you can get with credit cards that offer a 0 percent APR on purchases for a limited time.
  • These loans can cause negative impacts to your credit score if your utilization goes up too far.
  • You must be targeted for a Citi Flex Loan to apply, meaning they’re not available to everyone.

Citi Flex Loan alternatives to consider

If you’re on the fence about a Citi Flex Loan, make sure to consider some of the your alternatives.

Personal loans, for example, are currently offered with fixed interest rates as low as 6.7 percent for those who qualify, and you can also secure a fixed monthly payment and payoff date that will never change. It’s easy to apply for personal loans online, and you can get your money deposited into your bank account within a similarly short time.

Home equity loans and home equity lines of credit (HELOCs) can also work well if you have considerable home equity that you can borrow against. Both offer competitive interest rates, since you’re using the value of your home as collateral, and may let you borrow up to 85 percent of your total property value. However, home equity loans come with a fixed interest rate and fixed monthly payment similar to personal loans, whereas HELOCs offer a line of credit with a variable interest rate.

Finally, don’t forget to compare Citi Flex Loan terms to those you can get with a 0 percent APR credit card. If you need to make a large purchase and pay it down over time, for example, many credit cards offer 0 percent APRs on purchases for a limited time, and some even let you earn rewards as you spend. Just note that credit cards with 0 percent APRs don’t usually apply this introductory rate if you use your card to get cash at an ATM. In other words, this option is best for purchases you make with plastic, but not really useful if you need cash.

The bottom line

Is a Citi Flex Loan a good idea? Only you can decide. Before moving forward with a Citi Flex Loan, however, consider whether it aligns with your needs and ability to repay. Also, consider a few alternatives that might be less costly than a Citi Flex Loan over time.

Borrowing money doesn’t have to be stressful. Do your research to make sure you’re getting the best deal and find the best payoff plan for yourself.