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My first post here, hoping someone can help me understand my recent Egg card problems.
We had our account cancelled last year after some direct debit reversals in the previous few months (and had the interest rate hiked 2 months prior to it being cancelled to 21.9%).
This coincided with our sorting our finances out, and we have not had any problems since then. We have continued to pay the minimum monthly payments, and the balance has reduced by about £550 also.
In doing the post Christmas finance check, I noticed that the end of December payment to Egg had increased by just under £100, from £288 to £384. having gone through everything I can online (and sending them a secure email - no reply) I have come to the conclusion that they have gone from calculating the minimum monthly repayment as a straight 2% to their second option of interest + 1% of revolving balance. Really nice of them to tell me - unless I missed their notice, but can't find anything.
More perplexing is that the calculation for January's payment has increased by £5. Despite a reduced opening balance and the same interest rate being applied, the interest charged has increased. It was a time ago since I did maths, but I'm sure that isn't how it is supposed to work!
Can anyone tell me if Egg have changed the way they calculate interest? Has anyone else had their monthly payments increased by a change in minimum payment calculation? Is there anything I can do?
Egg have done the same thing to me, my minimum payments have risen by just under £7 (not a lot i know) despite the balance going down and my statements saying that monthly interest has not increased, still 1.67%(i Think)checked back on old statements, and my interest added has stayed around the same but the payments have gone up.
I too have sent a secure mesage to egg but like you have had no reply (as yet) and I also have had no notice from them saying that minimum payments were to increase so you havnt missed anything.
Sorry im also a novice on here and been no help (just thought id let you know you're not the only one) and unsure of what can be done hope someone with better knowledge will come along, would like to know that one myself.
Yes the same thing has happened to me - I have been paying £150 a month to reduce my closed Egg account (I was one of the unfortunates who never missed a payment etc but had a high outstanding balance).
On statement dated 17 November the minimum payment was £142.37
On on statement dated 17 December the minimum payment was £177.16
On on statement dated 17 January the minumum payment is£179.07
I have just sent an email to Egg asking what this is all about - presumably they are trying to make me bankrupt. I have enough trouble trying to keep my head above water without all this going on. They must be doing it to a lot of people - presumably everyone who has had their accounts closed to try and get them of their books by fair means or foul. I thought this practice was illegal.
In doing the post Christmas finance check, I noticed that the end of December payment to Egg had increased by just under £100, from £288 to £384. having gone through everything I can online (and sending them a secure email - no reply) I have come to the conclusion that they have gone from calculating the minimum monthly repayment as a straight 2% to their second option of interest + 1% of revolving balance. Really nice of them to tell me - unless I missed their notice, but can't find anything.
More perplexing is that the calculation for January's payment has increased by £5. Despite a reduced opening balance and the same interest rate being applied, the interest charged has increased. It was a time ago since I did maths, but I'm sure that isn't how it is supposed to work!
Can anyone tell me if Egg have changed the way they calculate interest? Has anyone else had their monthly payments increased by a change in minimum payment calculation? Is there anything I can do?
thanks
Kim
Hi Kim,
From other similar postings it appears that hard-up Egg has exercised their option of changed and raised minimum monthly payment to suit themselves. If this alternative calculation is covered by their T&C as previously accepted by cardholders there would seem little that can be done.
Debit interest for all banks is calculated by each day a fluctuating balance is owing, not by a fixed amount multiplied by a fixed calendar month interest rate. Purely as an example lets say if Egg did their computerised monthly interest calculation runs on:
September 30th,
October 31st,
November 30th,
December 31st,
then the interest shown:
on November statement - accrued over 31 days (Oct 1-31),
on December statement - accrued over 30 days (Nov 1-30),
on January statement - accrued over 31 days (Dec 1-31).
Egg's interest calculation run would not be done on the same day for all cardholders, but the interest-bearing days in any month will vary for all cardholders. Lets say your monthly interest rate were 2%. This equates to about £5 interest per day accrued on an outstanding balance of £7,000, i.e. the 30 or 31 days shorter/longer month difference would account for the £5 extra in the "longer" month of December.
If Egg were to do interest runs on the 29th in one month but on the 31st in another, then a difference of 2 days accrual, not 1, would arise. If you check back your monthly statements, see if there are minor swings and roundabouts, with one month's higher interest compensated by the next month's lower figure. The interest accrued during the shortest month of February, published in the March statement, should always be the lowest of all.
"There's never a good time to tell customers that we're increasing their payments but the minimum payment calculation was changed to ensure that your monthly minimum payment would always cover at least that month's interest in accordance with the Banking Code. This change was communicated to all Egg Card customers in October 2008.
Any increase in your minimum payment will mean that your balance is reduced faster. By clearing more of your outstanding balance, your subsequent minimum payments will slowly reduce.
Please copy and paste the link below into your web browser and go to section 2 to view the new definition of the minimum payment.
new.egg.com/visitor/0,,3_11087--View_1068,00.html
Egg Banking plc is authorised and regulated by the Financial Services Authority and subscribes to the Banking Code, copies of the code are available on request. For further information or to view the Banking Code visit www.bba.org.uk"
I have replied back stating that they had not told me about the increase also when you go to link it says interest charged at 16.9 or 19.9 apr I have pointed out to them that my interest is 21.9 so the T&C couldnt be for mine and it still says 2% of balance but after doing my calculations they have incresed to 3% will let you know what they reply.
Have had another reply from Egg, simply saying that they sent email out, (and if i couldnt afford to pay to phone them ASAP)but havnt told me when. Nor did they reply to my comments about APR being different from T&C. Have emailled them again this time asking for the date that the increase email was sent and still asking about interest of 21.9% not being on the T&C.
Will see what they have to say this time.
For possible interest,
once reading a thread, if the middle of 3 blue boxes at the top of the thread labeled "Thread Tools" is clicked, it is possible to subscribe or desubscribe without needing to make a post on the thread.
Had a reply from Egg again (email was today didnt know egg worked on a Sunday):-
"From 30 November 2008 the minimum payment changed to the following.
The minimum payment will be the greater of either 2% of the Revolving Balance, or the total of (i) interest billed on the statement on the Revolving Balance (ii) 1% of the Revolving Balance (iii) any Card Repayment Protection premium shown on your statement and (iv) billed fees for late or returned payments shown on your statement, or £5.
The amount you are required to pay will be shown on your statement.
Communication was sent to all customers towards the end of October 2008. A notification was also placed on the homepage of the Egg website".
They still cant (wont) tell me where exactly when they sent email, (surely they should know). Also they havnt answered my question about APR being 21.9% when T&C say different.
Have no idea what to do next its their word agains tmine but i know i never had email.
Hope someone has better luck than me.
Min Payment changed & weird interest increase
card problems.
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Originally Posted by kimwy66
