They've done the same to me too. I am awaiting a reply from them, but if they don't re-consider, I will be closing my account with them, and taking away my very low loan to value mortgage and home insurance as well. Long term, it's their loss, not just mine.

I've had an Egg card for about 15 years - I exceeded my 2k limit by £20 last month and immediately paid £120 into my account, plus they charged me £15 foy going over.

Tonight I got an email saying that they were increasing my interest rate from 16.9% to 21.9%. - I've told 'em to cancel the card (I'll continue to pay off my balance at the 16.9%) and stuff it.

I'll never give Egg my custom again, the scumbags.

Interesting stuff, is anyone else doing this other than Egg by any chance?

Maybe it has something to do with the US banking and credit rules for consumers which came about after the financial problems last year...it basically restricts this sort of behavior from now on in for any US lenders or subsiduaries there of; they can't just unilaterally jack up interest rates after a period of time where you've used your card.

A lot of US lenders are now jacking up rates as quick as they can before the law goes into effect (i think it now has so whatever they've done to existing customers is now all they can do) but is a similar proposal being put forward in the UK or something?

hebejeeby:

I don't think "closed" is a credit rating term and if it is it's irrelevent. The relevent term is "settled" (which is good BTW) but the account is not "settled" until paid off. Sorry.

As an aside, if you don't pay off the £3000, it's just possible a mortgage lender will notice from their search and ask (themselves) how come you couldn't pay it off (over some or other term) but will be able to fund a mortgage.

But that's an "affordability" issue entirely separate from "credit rating".

so glad i found this chain of posts! got my letter today - does anyone know if closing the account will affect my credit rating? have nearly saved up enough for house deposit and about to start searching for a mortgage - obviously not the ideal time so really keen to limit the damage. also do you think egg will ask for full repayment at some point? I have £3000ish on the card. Thanks.

The reason they are giving you the option of closing the account and maintaining the same interest rate is because these are the conditions all major lenders have agreed to with the regulators for when they want to increase price (as well as minimum 6 months between). It will not affect your credit rating and in fact given the account will be listed as closed may actually improve your credit rating. The reasons they will have done this is a) They don't want the business - in these times many lenders are reducing their business in some cases wheather it is profitable or not b) You may not be profitable c) Your statistics may say by the law of averages that you are in a category more likel;y to default in the new economy (it might not be you but demographically or based on account use you may be in the group) . This group is usually only about 2-10% but may be more given a & b . Hope this helps

Yes many of us affected by the greed and disloyalty of Egg. The offer of losing use of the card but freezing interest at current rate worries me. Will this affect credit rating and accounts with other lenders? Also, will they suddenly ask for full payment ? I wish they would appreciate the stress this puts people under.

I've been sent an e-mail too, advising my interest rate will increase to 26.9 unless I close the account; however my current rate will remain if I close the account. It feels like blackmail! I've sent an e-mail back in response, advising that the rate I am currently on is a bit high considering I won't benefit from any rate reductions in the future, and would they drop the rate on closure of the account. The only default on the account was due to their error, which they acknowledged and rectified. I've been a customer for years, and they haven't done too badly out of me! I'll let you know the response to the e-mail.

They've done similar to myself by upping the interest rate and leaving me a take or leave it email. That's the flexibility of so called plastic friends for you. ! ....

I use mine and clear it before interest is due, therefore it doesn't affect me as all I require is the free legal consumer protection offered on transactions paid for when using a credit card.

In time, they will need your custom and by then it will probably be too late, as most of their ex-loyal customers will have voted with their feet and gone "rate tarting" elsewhere for better rates. ?

I have an Egg Card and it has been very competitive on interest rate until now. I have recieved a letter to say they intend to increase the interest to 26.9 next month I have asked them to call me to discuss and am waiting for a call. The account has never been over the limt and I have always paid at least the minimum amount but sometimes more last month for instance I paid £750 off the balance. I really cant see the sense in squeezing good customers it would actually pay me to clear the balance to another account and then take out a new egg card offered at 16.9!! it seems crazy to me am I right or dont they want my business any more?

Any help would be great

Dottie