Egg Money - Credit Card Newbie!!

Elsterap

I've never had a credit card before, but want to because of peace of mind about liability and cashback. So i'm going to go for the Egg Money Account.

Now i need to make sure i've got this straight:

I can put a positive balance onto this card? I earn interest on this balance?
Anything i pay for on the card, i will recieve 1% cashback? And i can withdraw money from a cash machine at no extra charge?

I plan to get this credit card and treat it just like a debit card, transferring money from my Halifax debit card when i get paid, withdrawing money from it and making purchases with it and then in March earning money off it from cashback!

Anyone see any problems with this? Have i missed something important out? If i don't want to for a few months, i wont have to put any more money on it assuming i have a positive balance will i?

It says in the small print: "All interest paid on your credit Balance will be paid net of income tax at the statutory rate (currently 20%), "
Does that mean if i have £10 in there and leave it all year, then it will get lower rather than bigger?

Clariman

Elsterap wrote: »

It says in the small print: "All interest paid on your credit Balance will be paid net of income tax at the statutory rate (currently 20%), "
Does that mean if i have £10 in there and leave it all year, then it will get lower rather than bigger?

No it doesn't. The 20% tax is on the interest that they pay you.

To keep it simple, let's just assume that you had a positive balance of £10 on the Egg Money card all year and didn't spend anything. At the end of the year Egg would pay you 4% gross (before tax) interest on your £10. That means they would add 40p to your account. However, they will assume that you are a tax payer at the standard rate (20%), so they will deduct 20% of that 40p before paying you the interest, so that 40p drops to 32p. At the end of the year then, you'll have £10.32 in the account.

Clariman

YorkshireBoy

Elsterap wrote: »

I can put a positive balance onto this card?
I earn interest on this balance?
Anything i pay for on the card, i will recieve 1% cashback?

Yes to all the above.

And i can withdraw money from a cash machine at no extra charge?

You can from a positive balance, yes, and £500 per day. However, if your cash withdrawal creates a negative balance you will be charged interest on the amount of negative balance at your own personal rate. There is no cash withdrawal fee (typically 2.5-3% on other cards) for withdrawing from either a positive or negative balance.

I plan to get this credit card and treat it just like a debit card, transferring money from my Halifax debit card when i get paid, withdrawing money from it...

Assuming a linear spend over the month, you'll only make the equivalent of 2% (before tax) on the amount pre-loaded. Consider using it as a conventional credit card, and put your money in a higher interest account until the bill comes. That way, you can make 6%+ instead...ie, over 3 times the amount - PLUS the 1% cashback.

For a guide to using this card, and getting the most out of it, check out http://www.stoozing.com/cgi-bin/forum/YaBB.pl?num=1126208648

student100

Yes your plan would work. However it would be even more lucrative if you spent on the card, using it as a credit card, and paying off the balance in full by direct debit each month from your current account. Meanwhile keep your money in a current account that earns more than the 4% Egg are offering.

Elsterap

Ok, i'm all set for applying for this card; just wondering if theres like a quidco for ordering credit cards? Surely theres money in it?

Thankyou all who have replied so far =]