Egg Money Rate Increase to 16.9%

gmj_3

What strikes me now is the vapidity and irrelevance of much of this discussion, in picking over the bones of what is clearly a dead credit card company. Financiers in high places who thought they were clever have brought the global financial system close to the brink by messing around with ever more complicated and esoteric instruments - all being built on sand...and it's the same with the credit card market; we've all been sucked into this system where we "expect" money for free, time to pay, cashback for nothing, 0% for ever and even, sometimes, ability to walk away virtually scot-free having defaulted. We have this weird sub-culture and vocabulary of "stoozing" and "tarting" - why? Why not just call it idiocy? Or we try some clever legal ruse to not pay (like the signature scam). This web-site encourages and applauds our inventiveness at "getting our own back". At what? Our stupidity in getting in over our heads in the first place? The bursting of the bubble that you can't really expect to borrow money for free, or at least not for very long? It's true that the card companies have been as complicit as ourselves in bringing about this perverse situation but it wouldn't have happened unless they had had equally greedy customers who couldn't wait to save up for things (and before anyone starts, I include myself among the latter). Even the upright citizens who "pay off every month" - why not just pay cash and get it over and done with? If you can't pay today what will change in 56 days time?

It's clear that there is going to be some mess now. This is not a normal market any more. These card companies will not behave as they did before and will take some quite arbitrary decisions. If they lose some "good" customers along the way then that will either be in the service of their greater business model, or they will fail. Just as loads of mortgage products were withdrawn I think we are seeing a fundamental realignment in the cc market. The message must be to clear as much cc debt as possible before getting stuck with it at a horrendous rate. Better still , don't use credit cards any more. I truly believe social hisorians of the future will regard the last forty odd years of their existence as a very peculiar blip in the history of personal finance.

terry1962_2

Just wanna warn people about MBNA had balance transfer 12 months ago at 0% stupidly used it for purchases interest now up to 34% £88 per month interest from £35 last month have requested rate drop if not will transfer to my asda and cap one lower rate card and put MBNA in bin

Imani

Paul_Herring wrote: »

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.

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

the opt out was given as Egg no longer do consolidations of credit cards to loans. it used to be an option that you providing that if you were struggling with payments and a loan on a lower rate was cheaper and quicker to pay off after doing a financial assesment and the affordability was there yo could change your card to a loan. like the opt out meant you was not using any more credit.

they do not do this now. so even if you have not been affected by risk based pricing and want to change your card to a loan you have to apply for a brand new loan. not everyone gets an automatic cheaper interest rate this way.

financial_warrior

As someone with plenty of info from inside Egg, I would advise against retaining this product, once you have been affected by a single APR increase.

The product in its current form is unprofitable for Egg, and its owner Citi. They're no longer accepting new customers (http://egg.com/visitor/0,,3_108938--View_2319,00.html) - they're in the process of killing the Egg Money product.

Existing Egg Money customers are having their standard APRs increased significantly, in an attempt to get them to close their accounts and take their card business elsewhere. Not only that, but those affected by the August 08 round of increases are also being hit again. If your APR has just increased from say 7.9% to 12.9%, you are highly likely to receive another email in August informing you that the rate will be increasing from 12.9% to 16.9%. Those who have already been pushed up to 16.9% should expect a push to 21.9% in the summer.

Because they're no longer selling the product, the typical APR (originally quoted as 7.9%) has gone out of the window... This pretty much gives them a green light to price everyone out of their accounts.

I am confident that the 4% interest on a positive balance will soon be reduced, or completely withdrawn, once a surge in deposits occur. There have been musings for a while that the cashback promotion would not survive, and I am pretty sure existing product holders will see this slashed to 0.5%, if not completely phased out.

It's crucial to understand that Egg (and Citi) have made a decision that they do not want to service this product any more. Even if you accept the changes, that won't be enough, as you'll be a part of an ever dwindling customer base, which will make the operating costs on your account even higher for them. The safest bet is to move to a new account provider before things get costly, or Egg start forcing account closures.

YorkshireBoy

financial_warrior wrote: »

As someone with plenty of info from inside Egg, I would advise against retaining this product, once you have been affected by a single APR increase.

The product in its current form is unprofitable for Egg, and its owner Citi. They're no longer accepting new customers (http://egg.com/visitor/0,,3_108938--View_2319,00.html) - they're in the process of killing the Egg Money product.

Existing Egg Money customers are having their standard APRs increased significantly, in an attempt to get them to close their accounts and take their card business elsewhere. Not only that, but those affected by the August 08 round of increases are also being hit again. If your APR has just increased from say 7.9% to 12.9%, you are highly likely to receive another email in August informing you that the rate will be increasing from 12.9% to 16.9%. Those who have already been pushed up to 16.9% should expect a push to 21.9% in the summer.

Because they're no longer selling the product, the typical APR (originally quoted as 7.9%) has gone out of the window... This pretty much gives them a green light to price everyone out of their accounts.

I am confident that the 4% interest on a positive balance will soon be reduced, or completely withdrawn, once a surge in deposits occur. There have been musings for a while that the cashback promotion would not survive, and I am pretty sure existing product holders will see this slashed to 0.5%, if not completely phased out.

It's crucial to understand that Egg (and Citi) have made a decision that they do not want to service this product any more. Even if you accept the changes, that won't be enough, as you'll be a part of an ever dwindling customer base, which will make the operating costs on your account even higher for them. The safest bet is to move to a new account provider before things get costly, or Egg start forcing account closures.

Of course this "advice" won't suit everyone.

dankosheemo

gmj wrote: »

What strikes me now is the vapidity and irrelevance of much of this discussion, in picking over the bones of what is clearly a dead credit card company. Financiers in high places who thought they were clever have brought the global financial system close to the brink by messing around with ever more complicated and esoteric instruments - all being built on sand...and it's the same with the credit card market; we've all been sucked into this system where we "expect" money for free, time to pay, cashback for nothing, 0% for ever and even, sometimes, ability to walk away virtually scot-free having defaulted. We have this weird sub-culture and vocabulary of "stoozing" and "tarting" - why? Why not just call it idiocy? Or we try some clever legal ruse to not pay (like the signature scam). This web-site encourages and applauds our inventiveness at "getting our own back". At what? Our stupidity in getting in over our heads in the first place? The bursting of the bubble that you can't really expect to borrow money for free, or at least not for very long? It's true that the card companies have been as complicit as ourselves in bringing about this perverse situation but it wouldn't have happened unless they had had equally greedy customers who couldn't wait to save up for things (and before anyone starts, I include myself among the latter). Even the upright citizens who "pay off every month" - why not just pay cash and get it over and done with? If you can't pay today what will change in 56 days time?

It's clear that there is going to be some mess now. This is not a normal market any more. These card companies will not behave as they did before and will take some quite arbitrary decisions. If they lose some "good" customers along the way then that will either be in the service of their greater business model, or they will fail. Just as loads of mortgage products were withdrawn I think we are seeing a fundamental realignment in the cc market. The message must be to clear as much cc debt as possible before getting stuck with it at a horrendous rate. Better still , don't use credit cards any more. I truly believe social hisorians of the future will regard the last forty odd years of their existence as a very peculiar blip in the history of personal finance.

Just a quick note gmj,nobody on this forum or anyone who uses this website expects money for free and no way is it idiocy.

Everyone who uses these forums have their own debts for numerous reasons and are merely here to voice their opinions, frustrations and get some additional support with tackling their debts.

I as many others, are just frustrated with the ridiculous hikes that the CC companies seem to be getting away with with the likes of smEgg and Virgin on the ridiculous - 34.9% - is that really justified? I think not. This leads to people defaulting on payments and causing further problems.

We're all just here to get our debts shifted. If you feel that the forum's going to cause you to get annoyed at everyone and what we're all trying to achieve here then I would advise that you don't read the threads.

If it wasn't for the brilliant people and supportive threads on here then I wouldn't have paid an addition £150 to my debts :T And I thank those people everyday :T

dankosheemo

:T Financial_warrior: thanks for the heads up there! I've had mine increased but spoke to a lovely chap and we agreed to suspend my account so I'm now fixed at the 21.9% rate until I clear the account - not much to go now. Much better than the pending 26.9% hike!

financial_warrior

gmj wrote: »

What strikes me now is the vapidity and irrelevance of much of this discussion, in picking over the bones of what is clearly a dead credit card company. Financiers in high places who thought they were clever have brought the global financial system close to the brink by messing around with ever more complicated and esoteric instruments - all being built on sand...and it's the same with the credit card market; we've all been sucked into this system where we "expect" money for free, time to pay, cashback for nothing, 0% for ever and even, sometimes, ability to walk away virtually scot-free having defaulted. We have this weird sub-culture and vocabulary of "stoozing" and "tarting" - why? Why not just call it idiocy? Or we try some clever legal ruse to not pay (like the signature scam). This web-site encourages and applauds our inventiveness at "getting our own back". At what? Our stupidity in getting in over our heads in the first place? The bursting of the bubble that you can't really expect to borrow money for free, or at least not for very long? It's true that the card companies have been as complicit as ourselves in bringing about this perverse situation but it wouldn't have happened unless they had had equally greedy customers who couldn't wait to save up for things (and before anyone starts, I include myself among the latter). Even the upright citizens who "pay off every month" - why not just pay cash and get it over and done with? If you can't pay today what will change in 56 days time?

I agree with your comments about the changes in the CC market, and that financial services companies need to sort out their business models or fail.

I completely disagree with your comments about 'paying cash and getting it done' and 'what changes in 56 days time'

- As a business traveller, why should I spent my entire month's salary on a 3-day trip to Singapore, and have nothing to feed my family with for the remainder of the month? The simple answer is you stick it on your credit card, expense it, and then pay it off when the expenses come through... usually within the 56 day window.
- Overseas travel becomes very difficult (almost laborious) without a credit card. Constantly changing money when you enter different territories is not only expensive, it's a hassle and leaves you open to scams.
- Once upon a time, an EasyJet delay left me stranded at an airport trying to get home. I had no local currency left, but thanks to my credit card I was fine.
- The Consumer Credit Act covered thousands of Excel Airways customers last year. Those who 'paid cash and got it done' were screwed.
- Everyone has unexpected expenditure that crops up from time-to-time. What would you do if your boiler blew-up today in sub-zero temperatures? Tell your family they'd have to freeze until April, by which time you'd saved enough money to replace it?

OK, you've made a personal decision that credit cards are bad; but please don't come on here being self-righteous in telling other people that they should also see credit cards in the same way.

:rolleyes:

financial_warrior

dankosheemo wrote: »

:T Financial_warrior: thanks for the heads up there! I've had mine increased but spoke to a lovely chap and we agreed to suspend my account so I'm now fixed at the 21.9% rate until I clear the account - not much to go now. Much better than the pending 26.9% hike!

26.9%!?! Yikes :eek: - Egg are stepping to new lows (or highs)

Please bear in mind that if you've told them you're cancelling, and staying on your current rate until the balance is paid-off, they won't pay the cashback you're owed.

If your balance is fairly high, then the cashback is going to be fairly insignificant compared to the potential cost of any rate rise, so I'd take the APR freeze, and just work on getting that balance paid off.

Bulla

Does anyone know yet whether choosing to close your account and paying it of month by month will have an adverse effect on a credit rating ?

I havent spent on my egg card for over 6 months and I'm trying to get debt free.

Applying for other cards is not an option for me and I'm thinking closing this would be a better option ?

Any advice appreciated.