Egg - Minimum Finance Charge 50p

dontconme

I too have experienced this problem. I have had a "minumum finance charge" of 50p applied to my account even though I have consistently paid off the full balance, well in advance of the payment deadline to ensure cleared funds always reach the account to avoid interest charges, for at least the past 5 years.

This seems a bit underhand to say the least if intentional, and sloppy if a banking error!

I am awaiting a response from egg, but am seriously considering ending my dealings with them, and advising everyone I can to do the same. I suspect this may be part of a strategy by egg to off-load thier less profitable customers who pay of thier balances in full?

benf90

dontconme wrote: »

I too have experienced this problem. I have had a "minumum finance charge" of 50p applied to my account even though I have consistently paid off the full balance, well in advance of the payment deadline to ensure cleared funds always reach the account to avoid interest charges, for at least the past 5 years.

This seems a bit underhand to say the least if intentional, and sloppy if a banking error!

I am awaiting a response from egg, but am seriously considering ending my dealings with them, and advising everyone I can to do the same. I suspect this may be part of a strategy by egg to off-load thier less profitable customers who pay of thier balances in full?

As you say your balance is paid in full early I presume you're doing this by making payments yourself and not by Direct Debit.

If so, then there's 2 likely incidents that have happened:

1. You've perhaps made a mistake one month and haven't cleared the full balance on time.

2. Or, you've made a cash advance (there's no interest free period on cash advances).

If it's a cash advance then you'll be charged interest on 2 consecutive statements but no more after that if you keep clearing the full balance.

CannyJock

My money's on it being the gambling transaction.

Sounds like their CS will sort it out, but for future reference, if you make an overpayment to your account, this should cover the residual interest.

dag_2

As you say your balance is paid in full early I presume you're doing this by making payments yourself and not by Direct Debit.

Of course I can't comment on whether that's true or not for the people who are being hit by charges.

But given that Egg and Egg Money are one of the very few credit cards where you don't have to jump through several hoops of bureaucracy to switch your direct debit between minimum payment and full balance, why not just switch to paying full balance by direct debit? It's only a radio button on the web site.

Assuming that you are paying the balance in full each month, then the last statement with an interest charge on it should be no later than the second statement after the last cash advance, foreign currency purchase or gambling transaction that you made with your card.

And if there's a credit balance on the card before the first of those two statements is generated, and that balance is big enough to cover the charges that are applied to your account on the date of the first statement, then you shouldn't get any charges on the second statement.

But do ask them to put it right if they get it wrong, though.

melli_2

I've just had a 'Minimum Finance Charge' applied to my Egg account.

The long and the short is I've been charged this because I paid off my balance but not quick enough or am I totally off the mark?

benf90

melli wrote: »

I've just had a 'Minimum Finance Charge' applied to my Egg account.

The long and the short is I've been charged this because I paid off my balance but not quick enough or am I totally off the mark?

Its because interest has accrued for that statement period and the interest would have been less than 50p. This could have happened due to a number of reasons.

The most common are:

1. You were previously paying less than the full balance, in this case interest carries on accruing until your balance is paid. So, there's always interest applied on the statement produced after you clear the balance.

2. You've withdrawn cash or made a cash advance.

3. You've made a transaction which is treated as a cash advance. Online gambling transactions are classed as cash advances but as Egg no longer allow online gambling (due to Citi being American) this will probably become a less common mistake.

vaderag

Ok, i've just spotted this on my account, but I am incredibly confused, even after reading this thread.

I always pay off my full balance, every month, without fail, as it's done by Direct Debit.
Therefore, there cannot be ANY interest... what is this charge for?

There is a payment to Coral betting website on there for one of the months, but how is this any different to any other transaction?
In addition, it's appearing on successive months?!

Thanks

NickX

vaderag wrote: »

There is a payment to Coral betting website on there for one of the months, but how is this any different to any other transaction?

Betting Transactions are often treated as Cash Advances by Credit Card Companies, hence are different to other transactions.

There will be a charge for the making the transaction and NO interest free period, even if you pay off in full. Therefore you have accrued interest, and hence Egg have applied their Minimum Finance Charge.

Best Advice is to NOT use Credit Cards for gambling transactions.

vaderag

NickX wrote: »

Betting Transactions are often treated as Cash Advances by Credit Card Companies, hence are different to other transactions.

There will be a charge for the making the transaction and NO interest free period, even if you pay off in full. Therefore you have accrued interest, and hence Egg have applied their Minimum Finance Charge.

Best Advice is to NOT use Credit Cards for gambling transactions.

I didnt realise that, but lesson learned. Kinda crazy that they should treat it as such tho...
Still, it doesnt explain why I've been charged it last month as well when there is no betting transaction...

NickX

vaderag wrote: »

Still, it doesnt explain why I've been charged it last month as well when there is no betting transaction...

Once you've accrued interest, it takes a while to clear it completely - usually you need to clear 2 statements in full.

This is due to something called "Residual Interest", which is in effect the additional interest accrued from the date the first statement was produced and the actual date this statement was paid in full. This additional amount of interest will then appear on the next statement. Because it is small, they have applied their mininum charge of 50p.


I know its all a bit sneaky, but I think it is correct.