The Citi Diamond Preferred is a no-annual-fee card best for people rebuilding credit who want cash back on everyday purchases
The Citi Diamond Preferred is a secured credit card — meaning you put down a cash deposit that becomes your credit limit. It reports to all three credit bureaus, so on-time payments build your credit history. The card offers 1% cash back on all purchases with no annual fee, which is unusual for a secured card. Most people use it for six months to two years, then graduate to an unsecured card once their credit score improves.
Whether it is right for you depends on three things: whether you need to build credit from scratch, whether you can afford the deposit, and whether you are willing to wait for the card to convert to unsecured status rather than close the account once you no longer need it.
Key Takeaways
- You must deposit $500 to $2,500 of your own money upfront, which becomes your spending limit and stays in a savings account earning minimal interest.
- The card reports to all three credit bureaus, so consistent on-time payments will raise your credit score over time.
- There is no annual fee and you earn 1% cash back on all purchases, which is competitive for a secured card.
- After six to eighteen months of on-time payments, Citi may convert the card to unsecured status and return your deposit, though this is not may provide.
- This card is designed for people with no credit history or poor credit; if your score is already fair or better, you will likely may have access to for an unsecured card with better rewards.
How the deposit and credit limit work
When you open the Citi Diamond Preferred, you choose a deposit amount between $500 and $2,500. That deposit becomes your credit limit — if you deposit $1,000, you can spend up to $1,000 per month. The money stays in a Citi savings account and you cannot touch it while the card is open.
The deposit earns interest, though the rate is very low — typically less than 1% annually. You are essentially paying for the privilege of building credit. The tradeoff is that Citi takes on less risk by holding your money, which is why they can offer this card to people with no credit history or recent damage.
If you close the account, Citi returns your deposit within 7 to 10 business days. If the card converts to unsecured (which happens after consistent on-time payments), your deposit is returned and your credit limit may increase.
When Citi converts the card to unsecured status
Citi does not publish exact conversion timelines, but cardholders typically see conversion offers after six to eighteen months of on-time payments. Conversion is not automatic — Citi reviews your account and decides whether to offer it. If you are approved, your deposit is returned and the card becomes a regular unsecured card with the same 1% cash back and no annual fee.
Some people never receive a conversion offer. If that happens, you have two choices: keep the card open (it still builds credit and earns cash back), or close it and move to a different card. Closing it will not hurt your credit as long as you have other open accounts, but it does remove a line of credit from your history.
How this card compares to other secured cards
Most secured cards charge an annual fee ($25 to $95) and offer no rewards or rewards only on certain categories. The Citi Diamond Preferred stands out because it has no annual fee and offers 1% cash back on everything. That 1% is modest compared to unsecured cards (which often offer 2% to 5% on specific categories), but it is better than the zero rewards on most secured competitors.
Other popular secured cards include the Capital One Secured Mastercard (no annual fee, no rewards) and the Discover it Secured (no annual fee, 2% cash back on gas and restaurants for the first year, then 1%). The Discover card offers higher initial rewards, but the Citi card's 1% on all purchases is simpler and does not expire.
If your credit score is already 620 or higher, you may may have access to for an unsecured card instead, which means no deposit required. Check what you may have access to for before committing to a secured card.
What happens if you miss a payment
Missing a payment on the Citi Diamond Preferred works the same way as any credit card: a late fee applies (typically $25 to $35 for the first late payment), your interest rate may increase, and the late payment is reported to the credit bureaus. A single late payment can drop your score by 50 to 100 points depending on your current score and history.
The deposit does not protect you from these consequences. Citi will not use your deposit to cover a missed payment — they will charge you a late fee and report the delinquency. The deposit is only there to limit Citi's risk if you default entirely.
If you fall behind, contact Citi immediately. Many issuers offer hardship programs that can pause interest or lower your rate temporarily if you explain your situation.
Who should and should not use this card
This card makes sense if you have no credit history (you are new to the country, a young adult with no credit cards yet, or you have been out of the credit system for years) and you can afford to lock up $500 to $2,500 for six to eighteen months. It also makes sense if your credit score is below 580 and you have been rejected for unsecured cards.
This card does not make sense if you already have a fair or good credit score (620 or higher), because you will may have access to for unsecured cards with no deposit and often better rewards. It also does not make sense if you cannot afford the deposit or if you are not confident you can make on-time payments every month — the whole point is to build a positive payment history, and a single late payment undermines that.
How to use it to actually build credit
Opening the card is the first step, but the card only helps your credit if you use it responsibly. Here is what works: charge a small recurring expense to the card each month (a subscription, a utility bill, or groceries), then pay the full balance in full before the due date. This shows lenders that you can borrow money and repay it reliably.
Avoid carrying a balance to pay interest — the interest rate on secured cards is typically 18% to 24%, and paying interest does not build credit faster than paying in full. Also avoid maxing out the card; using more than 30% of your limit (called your utilization ratio) can lower your score even if you pay on time.
Check your credit report three to six months after opening the card to confirm Citi is reporting your payments. You can get a free report once per year from AnnualCreditReport.com. If Citi is not reporting, contact them — some issuers require you to request this.
Frequently Asked Questions
Can I increase my credit limit without adding more money?
Citi may increase your limit after six to twelve months of on-time payments, but you will not know until they offer it. When they do, you can choose to accept the increase (which may require a higher deposit) or keep your current limit. You cannot request an increase yourself.
What is the interest rate on this card?
The Citi Diamond Preferred APR varies by applicant and is typically between 18% and 24%. You will see your exact rate in the offer before you apply. The rate does not change based on your credit score improving — it stays the same for the life of the card unless you miss a payment.
If I pay off my balance every month, do I pay interest?
No. Credit cards only charge interest on balances you carry from month to month. If you pay your full statement balance by the due date, no interest is charged, regardless of your APR. This is why paying in full is the best way to build credit without paying extra.
Can I use this card internationally?
Yes, the Citi Diamond Preferred is a Mastercard and works anywhere Mastercard is accepted. However, Citi charges a 3% foreign transaction fee on purchases made outside the United States, so it is not ideal for frequent international travel.
What happens to my deposit if Citi closes my account?
If you close the account, Citi returns your deposit within 7 to 10 business days. If Citi closes the account for inactivity or violation of the cardholder agreement, they will still return your deposit, though it may take longer. You will not lose the money.