Egg money card screwing me over

generally-miffed

Recently took out an Egg money card with their car insurance - given the 0% 12 months APR on the (quite substantial) insurance premium and their 1% cashback it seemed a no-brainer.I also started using the card for general shopping etc, with the aim of paying all the shopping off IN FULL monthly and making small contributions towards the insurance premium.

However, even though I had it confirmed in writing (via a secure online message) from Egg that the insurance premium would be zero-rated for 12 months, they are now denying that I am eligible for the offer and have charged me interest on my last month's statement. Upon speaking to them over the phone they have now changed their story and say that contributions are first made to the cheapest loan on the card (ie the 0% insurance premium), before other payments are made.

Surely this is illegal? I may be mistaken but I was sure there was a recent ruling in Parliament/Courts that credit card companies were obliged to put contributions towards the most expensive debts first in order to prevent debts accruing?

Needless to say Egg card is now cancelled, balance paid off and complaint letter on its way to financial ombudsman in order to have the inappropriate interest charges reimbursed

Eydon

Most credit card companies work this way. There are a few notable exceptions (Nationwide for one), but I don't think Egg are one of them.

Golden rule of credit cards is to never spend on any card when you have a promotional balance on there.

Not sure what ruling you are referring to.

Your letter to the Financial Ombudsman won't do much good at this stage. You need to exhaust Egg's complaint procedure first. What did your T&Cs say with regards to the order of payments - that is what is important. If it says that payments will be allocated to the cheapest debt first, then Egg have done nothing wrong in charging you interest on your subsequent purchases (although they win no prizes for their two different explanations to you).

EDIT:
From Egg's website...
5.2 If you pay more than the minimum payment, we will apply any amount over the minimum payment in the following order:

Transferred Balances on which interest is charged at a Promotional Rate (in the order they were put on the Account); and

the Revolving Balance in the following order:
(i) Charges;
(ii) Cash Advances included in your current statement;
(iii) Transferred Balances put on your Account that are not charged at Promotional rates (including any Transferred Balances on which any initial Promotional Rate is no longer charged) and Purchases included in your current statement (including Purchases at a Promotional Rate);
(iv) Cash Advances put on your Account after your latest statement date; and
(v) Purchases put on your Account after your latest statement date.

so if I'm reading this correctly, your payment would go first to whatever was on your statement from last month, and then once that is cleared, to transactions added this month.

So it looks like Egg are correct in charging you interest.

ic

This is common place - the advice is always to not use a card for purchases if the purchases carry an interest rate and are not included in any special offer. This advice normally applies to balance-transfer offers, as typically cards offer a longer interest free period on the balance transfer than they do the purchases. This is in the credit agreement that you will have accepted in order to get the card:

http://new.egg.com/visitor/0,,3_79778--View_1666,00.html

5.2 If you pay more than the minimum payment, we will apply any amount over the minimum payment in the following order:

Transferred Balances on which interest is charged at a Promotional Rate (in the order they were put on the Account); and

the Revolving Balance in the following order:
(i) Charges;
(ii) Cash Advances included in your current statement;
(iii) Transferred Balances put on your Account that are not charged at Promotional rates (including any Transferred Balances on which any initial Promotional Rate is no longer charged) and Purchases included in your current statement (including Purchases at a Promotional Rate);
(iv) Cash Advances put on your Account after your latest statement date; and
(v) Purchases put on your Account after your latest statement date.

/Edit: Looks like I was beaten to it.

generally-miffed

Eydon wrote: »

Golden rule of credit cards is to never spend on any card when you have a promotional balance on there.



Guess that's where I have gone wrong.

Is there no way of having my interest reimbursed? Tried the complaints line, no help there and I think the Ts & Cs state that cheapest debt paid off first. Considering I took out their card protection, their car insurance and was paying off balances in full you'd think they might treat their customers a bit better.

But they're all just f*ckers out to make a quick buck I suppose.

Last time I go anywhere near an Egg product

Eydon

It's not just Egg. I have an Egg Money card, and I make £200 a year out of them, so for me it's a good product.

Your best bet would have been to speak to Egg and ask them nicely if they would refund the charges as a goodwill gesture. People on here have found that if they ask nicely, grovel and eat humble pie then sometimes the card issuers do refund charges for a first offence.

generally-miffed

The mistake is on my part on spending on the card in addition to my promotional rated item. So if I had essentially screwed them over by not using the card for anything else and paying the premium off over 12 months and collecting a 1% cashback I would have been better off.

But by using the card in a responsible way by paying off purchases in full (well the intention of) and even purchasing other Egg products leads to ME being screwed over.
Go figure...

Hank_Marvin

Does the old version of the Egg Money still allow positive balances or have they outlawed that as well.

cse

There was a ruling relating to this, but the regulations aren't likely to be enforced for at least another year yet... until then, keep reading your terms and conditions, and keep 0% balances on separate cards

Not that there are likely to be many 0% deals around once the regulations are enforced... situations like yours are the only way that 0% deals make money unfortunately

CLAPTON

how much interest did you in fact pay?

how much cash back would you have earned?

generally-miffed

So far the interest charges have only amounted to about £25 on one statement, but as interest is calculated on a daily basis it will be accruing interest as we speak.

The cashback to date is less than this.

Essentially there only way to avoid any further interest charges is to pay off the entire balance including the insurance premium which defeats the point of having the card and going with these insurers in the first place.

I could potentially clear the balance and then carry on using the card and try and obtain the cashback at the end of the year to cover the interest that has been charged.

But then I'd rather not give these people my business.

generally-miffed

cse wrote: »

There was a ruling relating to this, but the regulations aren't likely to be enforced for at least another year yet...

I thought I wasn't making it up. Any further details to hand about it?