Egg Money Rate Increase to 16.9%

CopperPlate_2

Got the email too - up from 12.9 to 16.9% - not that it will affect me as I pay it off every month in full. I had to smile when I read the entry on the website saying that there had been reductions AND increases - I'd like to hear about anyone who had their interest rate REDUCED on their Egg Money/Visa card? Anyone out there?

It irked me slightly to think that I've become more of a credit risk to Egg when my circumstances haven't changed for the worse since I took the card out, but it's all part of Egg's great plan (whatever that might be).

Are they simply trying to improve profitability for the parent, Citi? Or is this Citi trying to rationalise the range of cards, etc it has. It stopped taking applications for Egg Money, the Shell Card and has cut back on the cards available under the Citicard brand (EasyJet, BMI Baby, etc) as far as a I know.

CopperPlate_2

What annoys me more than anything else is the relatively short space of time since the last time they shunted the interest rate up from 7.odd to the 12.9% I am on currently. I wonder what delights they're going to spring on Egg Money cardholders in the 'new' cashback year? Reduced interest rate from 4% to...? 2%? Reduced cashback? Down to 0.5% perhaps? Either of these, or both?

I think anything is possible - although if cardholders, in a fit of pique, go ahead and close their accounts it'll achieve perhaps a cull sufficient to cause a stay of execution for the rest of us regarding the card benefits?

97trophy

pstrett wrote: »

Why did we as tax payers put several billions £ into the banking to be given higher interest rates. I will drop egg when it suits me

To be fair, the UK taxpayer has not put a penny into Citibank / EGG. So why should you expect EGG to care about you.

Citi seem to have raised the rates on many of their credit operations around the world.

chris-j

CopperPlate wrote: »

I think anything is possible - although if cardholders, in a fit of pique, go ahead and close their accounts it'll achieve perhaps a cull sufficient to cause a stay of execution for the rest of us regarding the card benefits?

Probably not - Mastercard and Visa expect a certain user base from organisations and Citi may be trying to cull Egg Money in order to get rid of Mastercard from the Egg Portfolio, so could be a cynical ploy to reduce user base then completely remove card from portfolio and sell off existing users to another bank.

D2bdebtfree

I was paying 16.9% variable, I received no email warning me of a jump in interest rates to 21.9%.
First I noticed was last month when my DD went up from average £40 to £60 per month which I think is absolutely ridiculous!!! Isn't there some sort of notice they have to give you before they can do this? It's like all of a sudden they expect me to be able to find another £240 approx per year out of thin air!! Advice welcomed.

dankosheemo

:hello: Glad it's not just me with the smEgg goingsons!

I had an email last week to my horror informing me that my interest rate's going up from 21.9% to 26.9%! Loyal customer for 4 years, never missed a payment, always paid above the minimum amount.

I could understand if I'd defaulted on payments, gone over my limit etc but I was only paying 16.9% last July! Crazy. So I have spoken to smEgg following thier correspondence and they have agreed to close my account and they'll keep my current rate of 21.9%. Not brilliant but heeps better than 26.9%.

My payment a day's going to clear it! :T

Good luck to those giving smEgg the middle finger and getting rid!
xx

Imani

Risked based pricing is a fact and is here to stay. Egg used to offer 9.9% interest to all customers, an error but they honoured it and there are many still with that low interest rate. At one time Egg offered one rate to all customers regardless of their credit file as long as they were comfortabole lending money to you.

Prudential sold egg because it made huge financial losses. Its bad debt write offs were very poor by industry standards. egg has no current account. So they can only make money by credit. Even if Pru didnt sell Egg risk based pricing would have come in. The current economic market says so,

if you were a bank or a credit facility would you just lend to anyone with no pre-conditions. Its in the T&C's.

Banks should stop lending to customers who have oodles of credit un paid. they are credit risk and increase bad debt provisions. banks have to 1stly put money aside for bad debt write offs before they can claim a profit.

not sure if any other banks have given customers opt outs. Egg didnt have to give you the choice of accepting the new rate and thats it. They have given people a choice to stick with their current rate and take no more credit and just pay it off.

more credit = increased risk
less credit or no more credit = lower risk
no credit = no risk

CopperPlate_2

chris-j wrote: »

Probably not - Mastercard and Visa expect a certain user base from organisations and Citi may be trying to cull Egg Money in order to get rid of Mastercard from the Egg Portfolio, so could be a cynical ploy to reduce user base then completely remove card from portfolio and sell off existing users to another bank.

I'd agree, although it's not an option I had given a lot of consideration to. They do appear to be promoting, like Hell, their Visa card though. Citi of course bought egg on the cheap compared to the price Prudential was looking for (to recoup the ridiculous price they paid to buy up the remaining stake all those years ago) but obviously they have run into some financial difficulties of their own recently. Don't know why they don't just re-brand it Visa although if they've stopped taking applications, and already have a Visa branded card, what's the point? Oh dear.

CopperPlate_2

MABLE wrote: »

I can only hope by increasing the rates on the their cards this will be some benefit to savers and will result in a rise in those rates.

Yes, you and me both, but we can dream on.

It all smacks of maximising profits - which shouldn't be unexpected for a bank I suppose.

Paul_Herring

Imani wrote: »

Risked based pricing is a fact and is here to stay.

Indeed, however looking at all the replies in this thread, Egg (after getting rid of thousands of 'risky' customers last year,) have decided that all their remaining customers are more riskier?

I somehow don't think so.

not sure if any other banks have given customers opt outs. Egg didnt have to give you the choice of accepting the new rate and thats it. They have given people a choice to stick with their current rate and take no more credit and just pay it off.

Well considering it's part of the T&C's of the card they basically had no option but to offer the opt-out.