New Egg minimum payment: 1% + interest if gt 2% of balance

Milarky

Just got this email. Looks like minimum payments will become 1% + interest when you are paying more than 1% interest per month to Egg - to ensure the balance comes down. Slightly different (or just ambiguously worded) for a special rate balance transfer - there the '1%' doesn't come down as it is always '1%' of the amount initially transferred. I'm sure this will soon be clairifed though.

Changes to your Egg Money Agreement

We are making an important change to your Egg Money Agreement. You'll see below details of the change to your Agreement, the date it becomes effective and the amended wording. It's important you understand what the change below means to you, so please read the following information carefully.

A summary of the change effective from 12 December 2008
Clause 2 – is changed as we are changing the minimum payment requirement so that you will always pay off at least the current month's interest.
Amended wording
Each month you must pay by Direct Debit at least the minimum payment by the Payment Date shown in your statement. The minimum payment will be:

- the full Revolving Balance if it is less than £5, but otherwise the greater of:
2% of the Revolving Balance, or
the total of (i) interest billed on the statement on the Revolving Balance (ii) 1% of the Revolving Balance (iii) any Card Repayment Protection premium shown or your statement and (iv) billed fees for late or returned payments shown on your statement, or
£5.
Plus, for each Transferred Balance made during an introductory rate or promotional rate period for Transferred Balances (but only during that period).

- the full amount of the Transferred Balance if it is less than £5, but otherwise the greater of:
2% of the Transferred Balance, or
the total of (i) interest billed on the statement on the Transferred Balance and (ii) 1% of the Transferred Balance, or
£5.
The amount you are required to pay will be shown on your statement.

(See Condition 10 of the Egg Money conditions for further details.)

Except where specified in this email, your Agreement remains unchanged.

If you have any questions about this change, please call us on 08451 233 233. Alternatively, you can send us a secure message by logging in to 'your accounts' via www.egg.com

Yours sincerely
Mark Powys

Bismarck

thanks for that...think it will catch on as the banks seek to slowly milk the cardholders with balances?

Paulgonnabedebtfree

Changes to your Egg Money Agreement

We are making an important change to your Egg Money Agreement. You'll see below details of the change to your Agreement, the date it becomes effective and the amended wording. It's important you understand what the change below means to you, so please read the following information carefully.

A summary of the change effective from 12 December 2008
Clause 2 – is changed as we are changing the minimum payment requirement so that you will always pay off at least the current month's interest.
Amended wording
Each month you must pay by Direct Debit at least the minimum payment by the Payment Date shown in your statement. The minimum payment will be:

- the full Revolving Balance if it is less than £5, but otherwise the greater of:
2% of the Revolving Balance, or
the total of (i) interest billed on the statement on the Revolving Balance (ii) 1% of the Revolving Balance (iii) any Card Repayment Protection premium shown or your statement and (iv) billed fees for late or returned payments shown on your statement, or
£5.
Plus, for each Transferred Balance made during an introductory rate or promotional rate period for Transferred Balances (but only during that period).

- the full amount of the Transferred Balance if it is less than £5, but otherwise the greater of:
2% of the Transferred Balance, or
the total of (i) interest billed on the statement on the Transferred Balance and (ii) 1% of the Transferred Balance, or
£5.
The amount you are required to pay will be shown on your statement.

(See Condition 10 of the Egg Money conditions for further details.)

Except where specified in this email, your Agreement remains unchanged.

If you have any questions about this change, please call us on 08451 233 233. Alternatively, you can send us a secure message by logging in to 'your accounts' via www.egg.com

Yours sincerely
Mark Powys
_______________________________________________________________


Does anybody know what that means in English?
Seems to set a new bar in the quest to become the least understood regulation.

CLAPTON

you pay at least 2%

~Chameleon~

I had to read it several times too to understand exactly what had changed. It shouldn't make any difference to my Egg Money card as I pay that in full every month anyway, but Egg card has a Transfered Balance on it at moment (0%). I guess it just means I'll pay a slightly higher minimum payment on that if I've read it right.

clio

I got this as well last night but boy do they frazzle your brain with wording that hinges on outright gobblydegook. Also i did not know EM did special rate BT's - i've not been offered one.....

~Chameleon~

clio wrote: »

I got this as well last night but boy do they frazzle your brain with wording that hinges on outright gobblydegook. Also i did not know EM did special rate BT's - i've not been offered one.....

I don't think they do, at least I've never known them to and I've had the EM card for a few years now. The email looks almost identical to the one I received about the Egg (green) card last week so I'm assuming it relates to that and they've used the same T&C's

trev83

.REPAYMENTS

Each month you must pay by Direct Debit at least the minimum payment stated in your statement by the Payment Date. The minimum payment will be:

• the full Revolving Balance if it is less than £5, but otherwise the greater of 2% of the Revolving Balance and £5, or (if it is more) the total of (i) interest and (ii) the Card Repayment Protection premium, both as shown in your statement

Plus for each Transferred Balance made during an introductory rate or promotional rate period for Transferred Balances (but only for the duration of that period);

• the full amount of the Transferred Balance if it is less than £5, but otherwise the greater of 2% of the Transferred Balance and £5.

(See Condition 10 of the Egg Card Conditions for further details)

We will collect the amount you tell us you want to repay so that it is paid into the Account by the Payment Date.


This is my old terms and conditions. Can they just change it like that??? Im not happy as have gone from paying £66 a month to £90. I m not sure exactly what to do now! Will it mean the balance is cleared quicker, I presume so.?

Zissou_2

I have had various problems with egg since this new interest rate, also they decided the week after Christmas to just take £400 out of my account. Anyway, I have been working the numbers as I am going to try and get as much mileage out of this as I can. So here is how this "interest" works:

The egg literature online states that you pay the higher of: 2% on the balance £5 or The interest (which is 2%) + 1% of the balance??? plus any charges and odds and sods.

I have ran the numbers based upon what they have been charging me and this is how it looked:

With the old system of 2.008% per month, on a balance of -£1227.78, my interest charge was £24.48 and that is exactly what they took out of my account.

The way it works now is that you are charged your standard 2.008% interest and that is charged to your egg card, this amount is then added to 1% of the new balance.

So after a payment, my balance was, -£1220.76, interest calculated at 2.008% according to egg is £24.38 (however I worked it out at £24.51???)

Adding the £24.38 to -£1220.76 gives me a balance of -£1245.14.

This is the new bit, we then have to add 1% of the -£1245.14, to the calculated interest payment and this gives you your min payment

(1245.14*0.01) + £24.38

which is £12.45+£24.38 = £36.83, which is what they took.

In essence it is a 1% increase in interest from about 2% (2.008%) to 3%, however I am sure that the brainbox who worded the literature simply didn't want to upset us all with an interest hike in such dark financial times!!! Needless to say, egg have managed to completely screw up a bills account that has pretty much run itself for the last 6 years by sending me over various limits and having payments returned. I have however managed to get ALL fees they have charged and they said that they will pay all charges that have incurred through DD's being refused because of their sheer incompetence! (see me holding my breath!).

Just for another piece of info, I have ran the numbers on the 3 different min payment charges and found something which I think I am going to seek advice on from the OFT as I am sure this cannot be right.

On a balance, you either pay, £5, 2% or the 2+1% whichever is the higher. On anything less than £165, you will pay £5, however on anything above £165 balance you pay the 2+1% (as this is more that £5 and more than 2% of the balance - obviously). The 2% bracket never comes into play and I think that this is grossly misleading!

Question - My egg statement says that my interest is 29% pa variable. if interest was calculated at 2.008% per month (which it has for the last 12 months) does this mean that my actual interest is 2.008*12 = 24.1% approx???

If so, with this new interest rate means, is that I am now paying a whopping 36.1% approx on my outsatnding balance!

Anyway, I hope that this helps, it took me a while to figure it out and I work with numbers all the time, so god help some people!!

anotherpaul_2

Zissou wrote: »

In essence it is a 1% increase in interest from about 2% (2.008%) to 3%, however I am sure that the brainbox who worded the literature simply didn't want to upset us all with an interest hike in such dark financial times!!!

It not an interest hike, because you (should) now owe Egg £12 less than you did before the interest and payment. It's an increase in the minimum payment - still annoying, but they aren't increasing the charge for credit here.

Zissou_2

Ahh yes, I see now, whilst you are charged at 2%, the extra 1% actually goes towards paying off your balance! Is that it now?? So with a payment of £36, £24 or so is to pay the interest and the £12 is to actually come off my balance. Well that makes perfect sense, however that is not what is understood from the literature they have produced and to be honest if they just said that then I guess quite a few people would be happy with that gentle persuation to clear their balances!