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Egg Credit Card. Did they cancel yours?

scotthayes

scotthayes

macrumors 68000
Original poster
Jun 6, 2007
1,605
53
Planet Earth
This has been all over the BBC news the last few days.

Egg cancel 161,000 credit cards.

Some very unhappy customers


Got a letter from them today saying my card will be cancelled in 35 days.

Crazy part, I use the card to pay for my .mac membership and that's all. I've got a loan with them and both card and loan are paid every month by direct debit. I'm off to my bank tomorrow to sort out a new loan and cancel all my dealings with egg.
 
They were bought by Citigroup in may last year. They were the first real internet only bank. Not a really big company but big enough to upset 161,000 customers.
 
scotthayes said:
both card and loan are paid every month by direct debit.
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There's your problem, right there. Because you're not a irresponsible idiot who spends much more than he can afford to pay back each month, you aren't making Egg any money in interest repayments.

I had similar experiences trying to get a credit card in the first place - I have no debts, an up-to-date mortgage and very rarely go into my overdraft. Apparently, this means that my credit rating isn't good because I manage my money sensibly. I'm not the kind of customer credit card companies like!

Check out www.fool.co.uk for some ideas on some of the best credit card offers too - they're pretty even-handed with their recommendations and do mention when they have an interest in pushing one product over another.
 
Egg is cancelling the accounts of customers who present a "high risk" of not making them any money. I just hope the bad publicity backfires on them.
 
CortexRock said:
Check out www.fool.co.uk for some ideas on some of the best credit card offers too - they're pretty even-handed with their recommendations and do mention when they have an interest in pushing one product over another.
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I'd second using fool.co.uk however what's funny is that egg have long been the darlings of Fool, constantly being recommended over the main banks.

There's a good article here about it, pretty much agrees with what you said, they want to get rid of the people who pay off their accounts in full.
 
Remember card issuers also make money on the actual transactions you make - typically 2.5% on each. Egg will not have a problem with your handling your finances responsibly as long as you can bring a lot of turnover to the table.

If you pay your card off each month and only have a handful of transactions a year, then you could ask yourself whether you actually need the card in the first place.
 
This is all because of the current credit crunch - the banks don't have money. Citibank cancelled all my cards, my Discover cards have been cancelled - I have never been late with payments.. have a score of 750+, etc.

What's worse is the banks are not reporting their actual losses. I even get worried about keeping my money in the bank.
 
weckart said:
Remember card issuers also make money on the actual transactions you make - typically 2.5% on each. Egg will not have a problem with your handling your finances responsibly as long as you can bring a lot of turnover to the table.

If you pay your card off each month and only have a handful of transactions a year, then you could ask yourself whether you actually need the card in the first place.
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This is not great advice.

Every piece of credit that you take out and pay off is a great plus on your credit score and makes the odds higher that you'll be able to get things like mortgages, home loans, business loans etc in the future.

At 18, I took as many cards out as possible, put a few big items on there, paid them off after three or four months (so paid a bit of interest) and did a few other things like an Apple Loan etc, and I have a good rating.

Music_Producer said:
I even get worried about keeping my money in the bank.
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Surely you have a compensation scheme?

Over in the UK we have the Financial Services Compensation Scheme which now guarantees you 100% of the first £30,000 invested in an institution such as a bank or building society, in the event of closure/liquidation.
 
I don't bank with Egg, but given that I pay off my balances in full every month I don't doubt that I would have been booted.

What really pisses me off about Egg is that they had the audacity to claim that they were actually doing their customers a favour, identifying the ones that were at risk and preventing them from spending any more.

We all know that what they really did is boot all of their less profitable customers. Why didn't they just say that? They're a business, we understand that, why lie?
 
^ I thought that too, MiniConvert.

as to the original question:

Don't think so. We bought a mac pro on it and paid it off like a week later. Prior to that it sat with no balance for probably a year or two. Maybe they'll give us the boot for that since we're not fattening their wallets.
 
As iBlue said, I've had one for a few years. It's only ever been used twice though. 1st to spread the cost of my (at the time) exorbitant car insurance cost using their 0% balance transfer. Then just recently for the Mac Pro (paid off the second I got paid). I'm a pretty useless customer to them as far as money making goes, but they've not booted me.
 
Maxiseller said:
Surely you have a compensation scheme?

Over in the UK we have the Financial Services Compensation Scheme which now guarantees you 100% of the first £30,000 invested in an institution such as a bank or building society, in the event of closure/liquidation.
Click to expand...

Yes, we do have FDIC insurance which guarantees up to 100%. Still, during times of financial meltdowns.. it's just better to withdraw your money than rely on the government to hand it to you in the event of a bank shutdown. Just look at what happened with Northern Rock for example - people began withdrawing their money even though the government assured them.

Reminds me of some bank that went kaput in the early 90s (BCCI? I forget) People lost all their funds, and the government never gave them a penny.
 
Whist I don't have an Egg card, my Credit Card company is ****. Capital One give me a rate of 36% APR (Not that it matters, because I've used the card once and it was paid the minute I got the bill, no interest for them) and then they give me an utterly useless £500 limit.

**** em, cards cut up.
 
I use Egg as my main personal card. Although I pay off the balance every month I do use it quite a lot for purchasing. I haven't had a letter yet, but even if I do it's no big loss.

Cancelled my Euro one this weekend too. Fed up with the bad service from my Spanish bank, so walked into their branch and queued for 30 minutes before shutting everything down and taking my money elsewhere. They had the cheek to ask me for the reason I was leaving :rolleyes:
 
Capital One was fined by the FSA this year for providing misleading advice to its customers. I have just paid off the balance of one of my relatives on one of their cards, which is now permanently cut up.

A company to avoid.
 
Me and my Wife both have separate Egg credit card accounts for over 5 years and neither of us have had a letter. We have both used the cards quite a bit over the years, at times leaving some balance and therefore paying some interest.

That said, at present both cards have been paid of in full and we haven't paid interest for months..... so I think they must have been looking back quite far to see who they have been making money from. I don't think I have actually even used mine for 6 months.

We could still get a letter, if so it's no loss as we have other cards with other companies.
 
If it is just down to customers' infrequent use of the card for small amounts, then why not just have an annual fee waived if you charge more than a specified amount per annum?
 
Music_Producer said:
Yes, we do have FDIC insurance which guarantees up to 100%.
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Well, up to $100,000 per account.

Loge said:
If it is just down to customers' infrequent use of the card for small amounts, then why not just have an annual fee waived if you charge more than a specified amount per annum?
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That's what I'm thinking. It would make them more money than shutting down the accounts. I wonder if they may send out "pre-approved offers" to these folks for a card with such a plan. In the end though, if the company feels that those customers are not cost-effective and there won't be too much negative publicity, I see no reason for them not to cut them loose. Less people to support means you need less staff. They lose minimal income and can cut significant expenses. Win-win.
 
Loans - don't pay off early, just keep repaying them

Credit Cards - spawn of satan, get rid of them completely. I only have 1, a barclay card, i did have a £8000 limit, reduced it to £500

I use it for putting work expenses on, i have a direct debit setup to pay the full amount off each month, then my work expenses go by chaps into my bank account replacing the money i have spent paying my card off :p
 
garybUK said:
Credit Cards - spawn of satan, get rid of them completely. I only have 1, a barclay card, i did have a £8000 limit, reduced it to £500
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Lol, yes, you're quite possibly right about that - however, they are a useful purchasing tool (as you point out) and, if paid off in full every month, usually cost nothing at all.

Still, I leave my limits high, just in case... plus other lenders have the ability to check what sort of limits other lenders have given a person and base some of their decisions upon that data, so a card with a high limit but a low/zero balance and a good history can be beneficial.

Credit cards also offer some protection (UK), and there's the added benefit that if something goes wrong then there's xx days to get it sorted before it becomes a financial issue. I never use debit cards other than for cash withdrawals, as if something goes wrong there then I'd be out of pocket immediately and face the prospect of ridiculous bank charges.

I do wonder if Egg's move will encourage other card companies to (more covertly) start closing some of their customer accounts to cut costs. I certainly don't think any other company would be as stupid as to perform a mass cull and try and get good press off the back of it, but still, Egg could have given them all ideas.

OT: I recently got a Sainsbury's credit card (from Sainsbury's Bank) in order to bump up my Nectar points. I used to have one of the AMEX nectar cards but, as everyone had warned me, I had fraud issues with AMEX and so, after they were resolved, cancelled both the Nectar and my Gold account card (my advice being stay away from AMEX - the stories you hear are true). Anyway, I've never known a card go through the till so fast! I shoved it in the machine at Sainsbury's the other day, entered my PIN and it immediately said 'Remove card' - before I knew it my receipt was in my other hand and off I went. I wonder if it's that quick everywhere, or just Sainsbury's...

OT2: As for other card issuers I've had experience with, if you're looking for something to replace your Egg card, Barclaycard are excellent and have a broad range of products. My card offers nothing special (I pay all my cards in full anyway) but the online servicing is good, CS is good and I've never had a problem. Halifax are also quite good, though they've contacted me several times to confirm my genuine purchases are genuine, and send out massive amounts of junk mail for loans and all sorts - again, my card offers nothing special but it's dependable and I've never had a problem.
 
What your limit is doesn't matter providing you're disciplined. Too many people see a £5000 limit and think they have £5000 to spend. Just remember it isn't your money and you can have as much on your limit as you like.

On the topic of Barclaycard, I ditched them a few years back after they pissed me off (can't remember how now). One thing I can't abide is bad service from a bank. The moment it turns sour is the moment to clear your accounts and leave.
 
Hmm... they havent cancelled me yet and I'm a useless customer for money making. I used it for a balance transfer a while back and paid it off a few months later. And I havent used it since.
 
dynamicv said:
What your limit is doesn't matter providing you're disciplined. Too many people see a £5000 limit and think they have £5000 to spend.
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Precisely. They keep increasing my limit and I keep calling and asking them to bring it down because I don't need it. I'm lucky in that I can now pay it off each month so don't pay interest but leaving big balances really is a mug's game.
 
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