Egg Money Rate Increase to 16.9%

Imani

financial_warrior wrote: »

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.

you do realise that the only people who will get a rate reduction are those who have impeccable credit ratings. there are now about 6 bands for credit with egg. correct me if i am wrong. i can check this and correct it at a later date.

@all paying off the full balance does not tell credit companies about your handling of credit. the business is all about making money.

egg's business is credit. the egg money card was to be the current account with out all the hoo ha. but it is a money loser.

the business is being restructred and re-aligned to mirror citi's way of doing things. which is probably why the consolidation option was removed.

so for every person that can only afford to pay £1 per month towards a 15k balance or go bankrupt egg have to save money or make money somehow

you actually do a egg a favour by doing the opt out or transferring the balance.

if you opt out just know that any subscriptions and regular payments will not be honoured.

kmstuart

Further down the road what are the rules on Egg choosing to close all accounts? Would all accounts basically go into the same thing as those who opt out (i'm not as mine has gone from 12.9 to 16.9%) in that you cant spend anything but are still allowed to pay off via monthly payments or would they want it closed and paid off in one go?

CopperPlate_2

IWantToBeFree wrote: »

Given that a large amount of people hold Egg money for the cash back rather than the low APR's etc, if they really wanted people to leave of their own accord, then surely the best way would be to cut the cashback first?

Perhaps they want to do it in a more 'managed' way - stopping cashback altogether would probably elicit a stampede - not being an economist, but surely this would have an impact somewhere along the line if X hundred thousand customers suddenly closed their accounts? Companies generally don't like the publicity of customers deserting them in droves.

But then, this is Egg - their previous attempts at customer care have been 'heavy handed' to say the least.

financial_warrior

kmstuart wrote: »

Further down the road what are the rules on Egg choosing to close all accounts? Would all accounts basically go into the same thing as those who opt out (i'm not as mine has gone from 12.9 to 16.9%) in that you cant spend anything but are still allowed to pay off via monthly payments or would they want it closed and paid off in one go?

If Egg chose to forcibly close your Egg Money account, their previous precedent of giving 35 days to pay would be an unlikely option for them, as they received terrible press and intervention by MPs. Whilst their isn't much, I suspect they would have to give customers a 'fair' amount of time in which to settle their depts.

CopperPlate_2

YorkshireBoy wrote: »

I believe it was 2007. Despite it being launched in September 2005 I didn't get mine until January 2006 and I'm sure it didn't have an "only guaranteed for 2 more months" clause.It seems to me like they're exploiting (to the max) the new 'rules'...don't they say that lenders can't/shouldn't review rates more frequently than once per 6 months for existing customers?

From APACS website:

"Increased transparency on risk-based repricing: The second change will increase transparency for customers in the area of risk-based repricing. Many credit card companies use risk-based repricing to calculate the risk of lending an open-ended, unsecured line of credit to a customer whose financial position can change over time. Risk-based repricing can result in changes to the overall cost of credit to a customer. These agreed changes will ensure that customers will be notified when their interest rate is being changed as a result of risk-based repricing, and critically, if their interest rate goes up they will be given sufficient time to close their account or be offered an alternative product, where available. Credit card issuers have also agreed that they will not increase the interest rate on a card on the basis of risk during its first twelve months, or more often than six monthly thereafter. No risk-based repricing decisions will be taken after 01 January 2009 that do not comply with these principles."

From what it says elsewhere in the release, it's not part of the Banking Code yet.

financial_warrior

withnell wrote: »

Well then if they pay 0.5% so be it....

What do you suggest, everyone moves away from the Egg stable and takes up an equivalent paying card elsewhere? Apart from hastle for me, what's the gain? Do you have a vendetta against your employer?

You're missing the point here. I'm speaking as an Egg customer, not an employee (though I have friends there). The hassle will be in the form of persistent changes to your account over a lengthy period of time. They're exercising their right to change everyone's rate at exactly 6 monthly intervals, can't you see that? They've withdrawn the product from sale, have you not seen that? As customers exercise their right to cancel, the numbers of active customers will reduce - making the cost to service each remaining customer even higher than before. This all leads to the easy conclusion that they don't want your business anymore. I would say this is especially so if you're a full-payer, like you claim.

So what will you do now? Wait, let them continue to increase their standard APR and remove incentives. Then, when they issue the decree absolute, you and a few thousand other Egg Money customers flood out onto the market looking for a good deal at next year's prices? Or, perhaps you monitor the situation closely over the next couple of months, keep an eye out for a good cashback card with a decent APR out in the market place, safe in the knowledge that once accepted they can't change your terms for 12 months? I know which one I'll be doing.

withnell

financial_warrior wrote: »

You're missing the point here. I'm speaking as an Egg customer, not an employee (though I have friends there). The hassle will be in the form of persistent changes to your account over a lengthy period of time. They're exercising their right to change everyone's rate at exactly 6 monthly intervals, can't you see that? They've withdrawn the product from sale, have you not seen that? As customers exercise their right to cancel, the numbers of active customers will reduce - making the cost to service each remaining customer even higher than before. This all leads to the easy conclusion that they don't want your business anymore. I would say this is especially so if you're a full-payer, like you claim.

So what will you do now? Wait, let them continue to increase their standard APR and remove incentives. Then, when they issue the decree absolute, you and a few thousand other Egg Money customers flood out onto the market looking for a good deal at next year's prices? Or, perhaps you monitor the situation closely over the next couple of months, keep an eye out for a good cashback card with a decent APR out in the market place, safe in the knowledge that once accepted they can't change your terms for 12 months? I know which one I'll be doing.

I have seen the withdrawal, i have seen the rate changes. Neither of these bother me. I am not going to "ditch" my account while they still pay me the primary benefit that i signed up for- I will keep my eye on the rest of the market but my original point stands.

financial_warrior

I never suggested anyone "ditch" their account; I certainly won't be whilst I'm getting 1%. The whole point of this thread is the rate increase - perhaps you missed the sign on the door when you walked-in?

You're fine, great, we get that! But there are plenty of people reading these forums who owe thousands on Egg Money cards. The Egg Money card appeared in top-10s for lowest standard APR for a few years, and so attracted a certain type of customer who wasn't looking to 'tart' or 'stooze', but just borrow a smallish amount at a sensible rate. These people have been creating income for Egg whilst the full-payers have been creaming off all of the benefits, truly believing that there is such a thing as a free lunch. I find it hilarious when a full-payer swaggers by and tries to alledge that the problem has been created by the people who chip a bit off a card balance each month. Imagine if you went into a cafe every day, sat at a table and emptied the salt and pepper into your pocket, then left. Eventually the owner of the cafe is going to tell you to get lost.
Bottom line: Full-payers on active card accounts cost hundreds of pounds a year in servicing and transaction charges (then add your cashback). If all Egg had on its Egg Money book was several thousand people with 1-4k debt, I doubt this thread would exist at all.

CopperPlate_2

financial_warrior wrote: »

Full-payers on active card accounts cost hundreds of pounds a year in servicing and transaction charges (then add your cashback). If all Egg had on its Egg Money book was several thousand people with 1-4k debt, I doubt this thread would exist at all.

Which I suppose is fine for the Big Players who have millions of cardholders UK/worldwide, but not for a small player like Egg, despite being owned by Citi - it still has to pay its' way I suppose.

Imani

From what I know Citi have no plans to merge the egg brand per se. Egg will continue to have its own identity and branding.

the larger the balance the larger the risk.

those who have had their rates increased, should query how they deal with credit across the board. check your credit files. do you have numerous credit facilities with large balances used and unused. have you defaulted in the last 6yrs did that accont terminate and register on your credit file. are you always applying for new credit?

maybe worth checking your credit file to see if there is something egg know that you do not.