Egg - Minimum Finance Charge 50p

vaderag

NickX wrote: »

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.

Right, thanks for that. It is incredibly sneaky, and i find it quite criminal that that they can treat one purchase different to others just because it's for something else!? It's the same purchasing principle afterall!
Still, not really worth kicking up a fuss for a quid... at least i'll know for next time!

NickX

vaderag wrote: »

i find it quite criminal that that they can treat one purchase different to others just because it's for something else!?

I agree that it is not fair, and is something that is designed to catch unsuspecting customers out.

Please be aware that the purchase of foreign currency from companies such as Travelex (as seen at all major airports) also count as Cash Withdrawals and NOT Purchase Transactions.

Bens2003

I paid my balance in full, and closed the account last month, I just checked my balance and found this "minimum finance charge" on it. Are they having a joke here, yes my minimum interest is lower than 50p as I have cancelled the card, how can this be justified. I appreciate it is only 50p but it is more the principle, especially after, in a time if falling interest rates they decided to bump mine up almost 20 times the current base rate!!

NickX

Bens2003 wrote: »

I paid my balance in full, and closed the account last month, I just checked my balance and found this "minimum finance charge" on it. Are they having a joke here, yes my minimum interest is lower than 50p as I have cancelled the card, how can this be justified.

I'm afraid you have fallen into the "Minimum Finance Charge" trap set for you by the Card Provider.

You will have accrued a small amount of "Residual Interest" from the last statement date up until the date you paid in full, probably pence, but their Terms and Conditions allow them to round this up to 50p.

To you and me 50p in is nothing, but a few million people falling into this trap will cover some of the losses incurred by the Risk Managers in London. Sneaky eh

greenmantle

there was an article on this quite recently:

http://www.guardian.co.uk/money/2009/jun/15/egg-credit-card-trailing-interest

m5rcc

I too pay off my balance in full at the end of each month but there is a lag of 19 days betweeen the statement date and DD date. It is noted by them that this is fine as there is a 50-day notice period on purchases.

I told them that I am not paying this 50p charge and will report them to the FOS if they persue this charge. They instanly refunded me the charge.

digital-one

Egg are still a pain.

I think they now have an unfair clause however.

On the 5th may I asked to pay in full... Which I then did and for them to close the account.

On the 18th they told me there was a 4.00 balance due to interest, which I couldnt pay - the account was showing 0.00 *(egg now wont let you pay beyond 0.00) Which forced me to wait until the balance showed the interest - which I then paid in full.

So then between paying in full and paying the balance I was hit with the minimum finance fee of 50 pence.

I am arguing that the fee is incurred as part of an unfair contract, because its unfair where there is no ability to pay amount owed and interest at the same time, therefore they force me to take "credit"

I dont know if im right, but it seems unfair to me to be charged interest and no method to reduce my own costs.

The problem is they didnt want people going into positive credit, so they changed the website so amounts of 0.00 mean the system then blocks payments resulting in customers being unable to clear debt in full.

And thats the basis of my argument its an unfair clause invalidating the contract?

Am i right?

jonesMUFCforever

You could have paid manually an extra couple of quid to put the account in credit - thus stopping the interest.

IMO you have to put up with the charge and pay it.

digital-one

@jonesMUFCforever - thats just the problem, with egg once the balance says 0.00 there is no method to make any additional/over payment.

Because they changed the rules, so if an account shows say -£125.94 with £21.30 interest You can only pay 125.94. Even if you call them they wont allow you to pay the 21.30 until the next billing cycle - thus forcing you to incur charges.

They say you cant pay the interest until it appears on the bill. By the time that happens, 16 days have elapsed minimal, which forces all customers to incur additional charges.

noh

You are able to make a payment by BACS or Faster Payments from your bank account.
It is only payments by debit card or DD that egg will not process if they would put you into credit.

http://new.egg.com/visitor/0,2388,3_11084--View_1765-bID_ECFAQPayTransCredLim-dva_1,00.html#howdoimakeapaymenttomyeggcardaccount?



"3. BACS payment (electronic transfer)

To make a BACS payment to your Egg Card account:

Ask your external bank to transfer money by BACS to:

• Sort code: 40-02-50
• Account Number: 01071181 and your 16-digit Egg Card number (this is used as a reference).

This payment takes three to five business days to clear into your account.

4. Faster Payments

Check whether your external bank has the facilities to make a Faster Payment. If they do, ask them to transfer money by 'Faster Payment' to:

• Sort code: 40-02-50
• Account Number: 01071181 and your 16-digit Egg Card number (this is used as a reference).

Faster Payments are usually sent to us by your bank on the business day you make the request. This will depend on when your bank processes the payment.

Faster Payments received before 11:45pm on a business day will be credited to your account for interest calculation purposes with effect from that day. Otherwise, Faster Payments will be credited with effect from the next business day."