Egg Money Credit Balance - 4% - Protection ?

Lacking_Interest

I have a question about Egg Money "deposits"

Egg money has paid 4% on credit balances for as long as I can remember having it.

This rate may become attactive in the near future especially with instant access in the true meaning - no waiting for BACS ( except for large amounts ) because you can have FREE (whilst in credit) cash withdrawals of at least £400 per day ( don't know the limit but have withdrawn £400 in one go ) AND 1% cashback on all card spending.

My question is that as Egg Money is a unique "animal" does anyone know how credit balances held on it would be treated should the troubled parent bank fold.

In short - are credit balances held on Egg Money treated as Deposits and therefore covered by FSCS or are they treated in some other way with perhaps less or even no protection ?

Icesaver

Lacking_Interest wrote: »

I have a question about Egg Money "deposits"

Egg money has paid 4% on credit balances for as long as I can remember having it.

This rate may become attactive in the near future especially with instant access in the true meaning - no waiting for BACS ( except for large amounts ) because you can have FREE (whilst in credit) cash withdrawals of at least £400 per day ( don't know the limit but have withdrawn £400 in one go ) AND 1% cashback on all card spending.

My question is that as Egg Money is a unique "animal" does anyone know how credit balances held on it would be treated should the troubled parent bank fold.

In short - are credit balances held on Egg Money treated as Deposits and therefore covered by FSCS or are they treated in some other way with perhaps less or even no protection ?

I hadn't thought of that. I usually keep a positive balance around a grand for the 4% rate and use the card when my regular card is getting near my (self-imposed, disciplined ) spending limit for the month.

Not a great amount to lose compared with my Icesave ISa but I'd rather not lose a grand!

Stormy

I am surprised the rate has not dropped on the Egg Money card, I was looking at using this myself although at the moment savings accounts are still beating the 4% rate. I would assume as soon as the are not Egg will drop the rate...

Lacking_Interest

Icesaver wrote: »

I hadn't thought of that. I usually keep a positive balance around a grand for the 4% rate and use the card when my regular card is getting near my (self-imposed, disciplined ) spending limit for the month.

Not a great amount to lose compared with my Icesave ISa but I'd rather not lose a grand!

I used to keep between £1000 and £2000 on it but recently took the balance right down due to this concern.

I see in the FAQ that you are allowed to put £99,999 on the card as a credit balance but of course it would not be wise to put more than £50,000 ASSUMING IT HAS PROTECTION !

If it has no protection then it's potentially another Icesave wating to happen

Lacking_Interest

Stormy wrote: »

I am surprised the rate has not dropped on the Egg Money card, I was looking at using this myself although at the moment savings accounts are still beating the 4% rate. I would assume as soon as the are not Egg will drop the rate...

I guess whether they bother changing it for existing card holders depends on how many people take real advantage of this rate ( it's not on offer anymore )

If it has protection and suddenly egg card balances start jumping to 50K then I guess they would act but if people only keep a few hundred pounds in there and Citibank need the money then it may not be worth the paperwork / admin ?

opinions4u

Customers with credit balances on credit cards are covered by the FSCS.

As Egg Money is clearly a fleixbile savings/credit product, that is also covered.

Stormy

Worth keeping an eye on then if rates elsewhere continue to go south.

Paul_Herring

Bear in mind that any purchases made on Egg Money (or indeed any credit card) aren't covered by Section 75 if the card has a positive balance.