Payment shock for Egg Money cardholders

By Reno Charlton
Staff Writer, 14 August 2008

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EGG hits the headlines again and causes stir amongst customers as rates and fees are pushed up on the once competitive Egg Money card.

Earlier this year the Internet financial giant Egg caused ructions after it was revealed that the credit card accounts of around 160,000 cardholders would be closed, and the controversy got worse when it was revealed that many of these customers had good credit ratings and therefore there had been no need for their accounts to be cancelled, although Egg officials still tried to justify the move.

However, Egg has now caused more problems by announcing that the credit card rates for Egg Money customers are due to rocket.

Egg Money cardholders will see a number of charges and rates rise, which will result in increased borrowing costs - something that many other credit card customers have already had to deal with over recent months due to the global credit crunch.

A recent report has detailed the various rises that Egg Money cardholders will have to put up with in weeks to come.

This includes a rise in the interest rate, which is going up from 7.9 percent APR to 12.9 percent. This reflects a rise of close to two thirds.

The fee relating to cash withdrawals that are made on the card has also been hiked up, and has gone from 7.9 percent to 16.9 percent, and a fee of 3 percent will charged on cash withdrawals, gambling transactions, and balance transfers.

Those Egg Money customers using their cards whilst abroad are also set to suffer, as there has been a rise in the conversion fee for foreign currencies, which has gone up from 2.65 percent to 2.95%.

Although the card rate hikes do not affect Egg Visa credit card holders, industry officials have said that the credit card rises reflect how the cost of borrowing is continuing to rise as a result of the global credit crunch.

A number of other credit card providers have raised their fees, rates, and charges over the past twelve months since the onset of the global credit crunch, and according to the results of a recent survey around one in three cardholders has seen their credit card rates and charges go up over that period.

If you have a good credit rating there are many credit cards still offering very competitive cheap low interest rates, including Capital One's Low Rate credit card at just 8.5% APR and Barclaycard's Platinum credit card at just 8.8% APR.

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