EGG Card Merchandise Interest Help

Roon101

Apologies if there is already a thread on this as i am a newbie.

Basically im trying to help my parents. They have an Egg Card which they took out in October 2007, and transferred a balance of £3,000 on to it. They have not touched it since, and each month have made a payment of between £75-£85 using a direct debit.

Unfortunately my Mum became seriously ill, so we have been looking through the finances to get them sorted as she wont be able to work for a long time, if at all.

The card was in her name. So after a long time convincing Egg that my Dad is her partner and we need access to the account (took ages by the way, Egg were not very helpful at all), i've managed to get onto the online account and check the balance / statements etc...

Now after 44 payments of on average £80 and not using the card at all for anything else, i expected them to be a decent way into paying the balance off. To my surprise there is still £2,466.73 left to pay.

I have checked the statements, and the main thing that sticks out at me is the Maintenance Interest at 1.385 per month. On average my parents have been paying £35 a month for this!! Add to this an average of £20 per month payment protection (which we are trying to claim back)

What is Maintenance Interest, and why weren't we informed at the start? I have checked the agreement and i cannot see any mention of it on there. Whatever it is my parents have so far paid about £1500 for it!!

Thanks for any help received.

Confused from Kent!

1jim

not sure about the interest but could your mum not claim on the payment protection policy because of her health?

[Deleted User]

What was the interest rate on the card? Even it is it was originally a 0% BT, you woudn't expect it to still be 0% after three and a half years.

YorkshireBoy

Lets assume she didn't pay late and got the, say, full 14 months 0% on the BT.

Opening bal: £3,090 (inc 3% BT fee)

Over 14 months she repaid approx £1,120 (14 x £80)

But during that time she incurred £20.50 per month PPI (that's £20 in premium and a 50p minimum finance charge), so approx £287 + interest at 17.9% APR (£26) = £313.

So she started month 15 owing £3,090 - £1,120 + £313 = £2,283

From month 15 the whole balance was accruing 17.9% APR, or 1.385% per month (which is the figure you mention, but possibly incorrectly term 'maintenance interest', in your OP).

The PPI, at £0.79 per £100 would add £18 to a £2,283 balance, and equates to a 0.79% monthly charge.

You can see that 1.385% + 0.79% means her balance was increasing by 2.175% per month, yet she was only making a 2% minimum payment each month by direct debit...and that's why her balance has increased month by month for the last two and a half years (from £2,283 to the £2,466 you mentioned in your OP).

Roon101

1jim wrote: »

not sure about the interest but could your mum not claim on the payment protection policy because of her health?

Thanks for the replies. This is where Egg were really unhelpful at the time, as they would not let anyone else access the account apart from the card holder. It took numerous attempts for my Dad to convince them of what had happened and that he is her husband. Didn't help that Mum had all the info i.e. passwords to the account etc... and the nature of her illness meant she cannot recall them!

So no we haven't done any claiming on the policy. We were thinking about claiming it back as mis-sold ppi as we have basically been denied access to use it, but would it be wiser to simply use the policy and claim off of it? She is registered disabled now, and will not be able to work again.

Roon101

YorkshireBoy wrote: »

Lets assume she didn't pay late and got the, say, full 14 months 0% on the BT.

Opening bal: £3,090 (inc 3% BT fee)

Over 14 months she repaid approx £1,120 (14 x £80)

But during that time she incurred £20.50 per month PPI (that's £20 in premium and a 50p minimum finance charge), so approx £287 + interest at 17.9% APR (£26) = £313.

So she started month 15 owing £3,090 - £1,120 + £313 = £2,283

From month 15 the whole balance was accruing 17.9% APR, or 1.385% per month (which is the figure you mention, but possibly incorrectly term 'maintenance interest', in your OP).

The PPI, at £0.79 per £100 would add £18 to a £2,283 balance, and equates to a 0.79% monthly charge.

You can see that 1.385% + 0.79% means her balance was increasing by 2.175% per month, yet she was only making a 2% minimum payment each month by direct debit...and that's why her balance has increased month by month for the last two and a half years (from £2,283 to the £2,466 you mentioned in your OP).

Thanks for your reply. That has made things a bit clearer on how everything is broken down. I only said Maintenance Interest as thats what it says on the Egg Statements, to be honest i'd never even heard of it before.

Seeing as we have been paying the PPI Policy, maybe it would be wiser for us to claim from it, now that Mum is registered disabled and un-able to work ever again?

1jim

re ppi misselling- could this apply http://www.fsa.gov.uk/pages/Library/Communication/PR/2008/149.shtml

Just taken this from egg.com http://new.egg.com/visitor/0,2388,3_11084--View_1765-bID_ECFAQInsCov-dva_1,00.html#whatiseggcardrepaymentprotection? does this apply?

What is Egg Card repayment protection?

If you're unable to work through accident, sickness or unemployment, Egg Card repayment protection could pay a monthly benefit of one tenth of your outstanding balance (at the date of claim) until you return to work or for up to one year, whichever is sooner. Additionally, in the event of your death or diagnosis of a serious illness, your outstanding balance could be paid in full.
Card repayment protection costs 79p per £100 of your statement balance. For example, if your statement balance was £1,000 the premium would be £7.90. If your statement balance is zero, you will pay nothing.
As long as you're a UK resident aged between 18 and 65 and are in permanent full or part time work, you'll be eligible for cover. This policy is subject to limitations and exclusions including pre-existing medical conditions and unemployment you are currently aware of or that occurs within the first 28 days of cover. See full policy terms and conditions.

How much benefit would I receive with Egg Card repayment protection and how would it be paid?

If you were off work due to an accident, sickness or involuntary unemployment, each month your Egg Card account would be credited with one tenth your outstanding balance (or your credit limit if lower) as at the date of your claim.
For disability arising from an accident or sickness, the date of your claim shall be the first day you consult, or receive treatment from and are certified as being unfit to work, by a doctor. For involuntary unemployment, the date of your claim will be the date you stop working. You will be eligible for a monthly benefit to be paid after you have been unemployed for a continuous period of 28 days.
In addition, in the event of your death or the diagnosis of a critical illness, the lesser of either the outstanding balance (including up to three months arrears or interest) or the credit limit could be paid to a maximum of £25,000.
Claim payments would be made directly to your Egg Card account.

How do I make a claim when I have Egg Card repayment protection?

As soon as you think you need to make a claim call us on 0845 120 5203 Monday to Friday 8.30am to 6pm.