Egg Money Rate Increase to 16.9%

Megalomaniac

CopperPlate wrote: »

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.

Maybe they are adhearing to this though. I have NOT received an interest rate increase on Egg Money. I am still at 7.9% but I got my card in June 2008, less than a year ago. Although, saying that, I got a rate decrease with Egg in August on my Egg Visa card down to 10.9%. But, doesn't seem like anyone got a rate decrease this February...

Mattfoo

For those Egg card holders who too advantage of the Balance transfer promotion a couple of years ago (5.9% for life of balance / no BT fee), your rate will stay at 5.9%. Just called them to clarify as Im still chipping away at my balance.

financial_warrior

Imani wrote: »

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.

I have heard different regarding the future of Egg, and have heard this from some people who should know... Citi's 10-year objective for Egg was to dispense of the high-risk customers, and move the desirables over to Citi products. The only reason Egg continues to exist in its present form is that a consolidation of two very disparate systems takes a long time. Citi regard some of Egg's technology as more advanced than their own, and are still deciding what technology platform the combined business will use.

Your comments about the reasons why peoples' rates have increased is also erroneous. I answered no to all of your questions, but will still experience a rate increase. The people reporting rate increases have all been managing their accounts in different ways, and have different approaches to their personal finance. Telling people to look closer to home is an unfair statement for this situation; Egg are shutting this product down, and telling people it's their own fault is wrong... The wording in the official email states nothing about account review or changes in personal circumstances.

jmids

I thought I'd have a rant too as I've just realised that the email which I didn't think affected me, actually relates to a hike of 4% up to 16.9%. It very conveniently doesn't mention your existing rate in the email. It would be much more transparant if it was along the lines of "from" and "to"!

What surprises me somewhat is that the wording on their website regarding this (which differs from the email), suggests that it's not just about costs of money lending but peoples credit rating... No sign of my credit file having been rechecked though as I subscribe to a service for notifications of that.

Not only do I clear my balance each month but my egg savings also exceed what I spend on the card. Less than a year ago they also increased my credit limit by almost 40% on my egg credit card (now closed). The implication that you get a lower rate for having a good credit rating seems wholy dishonest.

I have seen posts relating to them making money out of people in debt who can't afford to pay the balance, and whilst I can see that constant drip drip makes them money, surely these are also the most likely to default, perhaps permanently! Surely the model of lending to those who are likely to get in that sorry state is surely flawed, it beggers belief that they would be preferrable to people paying and managing their account well.

I wonder if as the text on their web site suggests regarding this change, whether anyone has received a lower rate??

Cash back payout time is almost here though, which I have been waiting for before cancelling as Egg as a whole has cheesed me off for some time, but I realised that I couldn't close this before the payout as that would forfeit that. I'm thinking of cancelling once cash back is received so as not to have too many open accounts. Hopefully the credit limit will in some way return to the pool in which others will view to apply to future applications.

They don't seem to see customers as a whole, as I used to have motoring insurance from them too, until their dogmatic approach to admin fee's being applied at every opportunity. Needless to say they were kicked into touch at the first opportunity on that one too!

I also think it's wrong for them and others that engineer admin fees out of you when they deem a purchase, such as a currency exchange purchase as a cash advance. Although you have your account set up for them to take the full payment each month the way the balance is reduced means that the cash advance rolls on and generates interest for them or a minimum finance charge, even though there is no further option for paying the full amount by direct debit. That is surely day light robbery and the reason that standard egg credit card was closed.

What I'm getting at is that if you treat customers well then they're more likely to buy other products and yes you might not make as much on some but if you saw people as valued customers you'd realise that something is better than nothing and naturing a relationship over a lifetime would surely be more fruitfull.

I am a great believer in people voting with their feet, it's the only thing big companies hear. I've tried the moaning down the phone to a call centre in which the recipient really doesn't care one bit. The most rewarding part is telling the retentions dept that your making hast for a new deal with one of their competitors. I actually think grouping some financial products with the same company is a good way to go in terms of it giving greater clout when things don't go right.


regards
jmids

YorkshireBoy

jmids wrote: »

No sign of my credit file having been rechecked though as I subscribe to a service for notifications of that.

They don't make a formal search. Instead, they can take a monthly data feed from the CRA's which includes, amongst other information, a consumer indebtedness index (CII) figure.

They base their 'ongoing lending' decisions on this monthly data feed.

Google "CII" and "Delphi" for further information.

chris-j

YorkshireBoy wrote: »

They don't make a formal search. Instead, they can take a monthly data feed from the CRA's which includes, amongst other information, a consumer indebtedness index (CII) figure.

They base their 'ongoing lending' decisions on this monthly data feed.

Google "CII" and "Delphi" for further information.

But I think it is fair to say that Egg are full of it. They are not reassessing credit at all, they are trying to annoy enough customers to allow them to easily kill of this product. My credit rating has not changed in any significance in past year (if anything it is better) and I have had two rises applied by egg, as has my wife. Our limits on Egg Money are pretty low and always have been, payments are always made on time, never over limit, never missed any payments on anything.
I will probably opt to retain current rate till paid off, but will not choose this until this years cashback is paid - which should be before 6th March.

Bulla

Imani wrote: »

It should not affect your credit score, because although the account would be to egg an agreed terminated agreement account interest is still accrued. It would only effect your credit score if you missed a payment or the account was defaulted and terminated.

Thanks Imani, I have sent them a secure message requesting more details but I'm still waiting on a reply.

withnell

financial_warrior wrote: »

Bottom line: Full-payers on active card accounts cost hundreds of pounds a year in servicing and transaction charges (then add your cashback).

If this was true, why do the card companies keep offering me incentives to stay with them? I've always paid my balance off in full.

chris-j

Bulla wrote: »

Thanks Imani, I have sent them a secure message requesting more details but I'm still waiting on a reply.

I've just received response from egg and it is a pretty stock answer

MABLE

Received a reply from EGG advising if I did like the 16.9% to close the account. They further went on to say because of so many customers trying to find a way not to pay their debts they are now having to increase the apr.