Egg Money Rate Increase to 16.9%

Rafter

Paul_Herring wrote: »

Stop it. Please.

If you're spending regularly on the card, then they most certainly are making money from you - don't forget that the CC companies charge a percentage for any transactions to the vendor, from around 2-3% for MC and Visa to around 5% for Amex.

Paul,

Need to update your numbers. Average interchange fee is only about 1% so by the time you take off processing costs, statements, computer systems, cash back, fraud costs and S75 guarantees, card companies don't make any money out of full payers...... which is why they have to charge so much in fees and interest to other customers!

A lot of the vendor fee is payment for the card terminal and phone lines and compares to the cost of depositing cash in a bank or processing cheques at 75p a time.

Totally agree that Egg are out of order doing this on the date that new rules about treating customers fairly are announced by credit card companies. Egg are owned by citigroup though who have lost a fortune in the states lending to sub-prime though, so they probably don't care too much about existing egg customers in the scheme of things.

R.

anotherpaul_2

YorkshireBoy wrote: »

Contrast this with Barclaycard, who are lowering the APRs (by up to 5 percentage points) for 3 million customers...

Sounds like a headline-grabbing PR move to me. It's only the lowest risk customers, most of whom probably pay their balance in full each month (No, that's just my guess, I can't back it up).

anotherpaul_2

Rafter wrote: »

Need to update your numbers. Average interchange fee is only about 1% so by the time you take off processing costs, statements, computer systems, cash back, fraud costs and S75 guarantees, card companies don't make any money out of full payers...... which is why they have to charge so much in fees and interest to other customers!

I would expect that the S75 part of the cost is tending to increase, as well.

Eydon

I've just read my email, and sure enough there is one from Egg, but all it says is that the rate for Cash Advances is increasing to 21.9% APR. I'm currently on 16.9% APR for purchases, and have been since I got the card.

Never paid any interest on it, or taken any cash out when I've had a negative balance, so shouldn't really affect me.

EDIT: I've just logged into my Egg Money account and it only displays one interest rate for everything - never noticed before (but then as I say I never pay interest). Interesting though that the email specifically says the interest rate change is for Cash Advances.

zkw29

Eydon wrote: »

I've just read my email, and sure enough there is one from Egg, but all it says is that the rate for Cash Advances is increasing to 21.9% APR. I'm currently on 16.9% APR for purchases, and have been since I got the card.

Never paid any interest on it, or taken any cash out when I've had a negative balance, so shouldn't really affect me.

EDIT: I've just logged into my Egg Money account and it only displays one interest rate for everything - never noticed before (but then as I say I never pay interest). Interesting though that the email specifically says the interest rate change is for Cash Advances.

I got the same - cash advance increasing to 21.9% but no mention of an increase to my APR of 16.9%.

Frugaldom

My email doesn't mention the Egg Money card (currently 7.9%), only the Egg card, which is currently at 10.9%

A summary of the changes effective from 6 March 2009:
Clause 3 - this change is to notify you that the new APR on your card is 16.9% (variable).
Clause 4.1 - this change is to notify you that the new standard variable annual interest rate you pay on Purchases and Balance Transfers is 16.9% and for Cash Advances the standard variable annual interest rate is 22.9%.

Originally this card also offered 1% cashback but that was withdrawn some time ago. I wonder if that means the anniversary 0% BT with 2.5% fee will also disappear?

I hope they don't get rid of the cash back on the Egg Money card, I now use that in preference to debit card and was trying to preload it every month for the 4% interest rate.

INT1

Section 75's are most certainly increasing. No credit card company likes full balance payers but still banks and credit card companies still make plenty of money from them.

colin1965_2

Hi

I am fuming, mine has gone from 17.9% to 19.9% - I rang and once was rudely cut off and the next I might as well been talking to myself.

I asked who to speak to to justify the rise in the rate, my credit rating is spot on, my history is impeccable, my balance is variable, but do make above and beyond the minimum payment regular.

No one in the customer service department was willing to help, they just read from a script, I wish I could write to someone, but feel I am, again wasting my time

Annoyed Egg customer

Rafter

Egg pretty much invented 0% cards back in 2000 and the egg money always looked too good to be true with low interest rates, cashback and automated payments meaning that fee income from late payments must have been much less than most cards.

Turns out that it really was too good to be true and now they are trying to make some money.

I can't believe citigroup would do this and annoy loads of customers if they were making loads of profit already. Although given the mess they have made of what was the largest bank in the world until 2 years ago, perhaps they really are that stupid!

R.

Thanatos

I have the 16.9 to 21.9% increase. its an absolute joke when the base rates been dropping for so long.

I will be clearing the debt on both my egg cards now and getting rid of them. A 5% rise is a joke :mad: