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please help i have had an Egg account for some 3 years now i have been sitting at my limit for much of that time but never missed a payment - have claimed back all the over limit charges but noe they have incresed my intrest rate to a whopping 26.9% - i dont have access to another account to transferre balance (5k)
The conventional answer is no you can't. These companies all reserve to themselves the right to vary their terms including the rate of interest from time to time with proper notice - normally one month.
26% is a huge rate given today's bank rate.
What was the previous rate? and how long had then been in force for?
Is this rate increase applicable to all customers using this product and what do they say the reason for it is?
Please don't pm me about specific questions unless you have posted and it has not been dealt with or unless the matter is confidential. Please include a link to the post you want me to look at. If you have received a defence, contact me.
Advice & opinions of BankFodder, The Consumer Action Group and The Bank Action Group are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.
What I have always found deeply unfair about these contractual variations is that once they are imposed, the customer is only given the option of accepting the increase, or else having immediately to find large sums of money to extract themselves from the contract - even though it is the lender which has moved the goalposts.
It seems to me that a very much more fair and balanced approach would be for the lender to increase their rates, but if the customer felt unable to deal with the new rate, then the contract shold be terminated but any existing balance would then fall to be paid off at the exisiting rate of interest.
After all, you continued to contract with them and to incurr a debt on the basis that the interest rate was x%. You arranged your affairs accordingly and with certainty that you could manage your debt and honour your contractual committments.
In particualr here, we hav an interest rate hike which is completely contrary to what the markey is doing.
It would be vey possible to argue that although you had agreed that Egg could vary their interest rate from time to time, it was your reasonable expectation that such interest rates would be varied in order to refalect trends in the marke - particularly the prevailing base rate.
Egg's increase seems to be contrary to all reasonable expectations and for this reason I would venture to suggest that you might have a useful argument to put to a county court judge.
If you fancied this, then you should understand that it would get very sporty. Egg would fight tooth and nail on this issue but I feel that you might be in with a good chance and little risk.
However, in the meantime you will have either to pay the new rate, pay off the balance or else bear the consequences of going into default.
Please don't pm me about specific questions unless you have posted and it has not been dealt with or unless the matter is confidential. Please include a link to the post you want me to look at. If you have received a defence, contact me.
Advice & opinions of BankFodder, The Consumer Action Group and The Bank Action Group are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.
Is in "serious discussion" with a debt advice group.
The plan, which comes into effect on 1 January (2009), also includes a pledge from the providers of credit cards and store cards not to increase interest rates in the first 12 months, and no more frequently than every six months thereafter. If it does decide to raise the APR, customers will be given 30 days notice of the change. There is no mention in the principles, however, that instructs credit card companies to pass on any cuts in the Bank of England's Bank rate to credit card borrowers. So borrowers could still face interest rate increases, but will be given more notice of them.
'Real hardship'
.... Consumer Minister Gareth Thomas. Previously, he has pointed to the example of one case when a borrower's APR was doubled while they were in debt. The card providers had already agreed to a 60-day breathing space for borrowers in difficulty.
The government says anyone who believes a previous rate rise was unfair should take their case to the Financial Services Ombudsman Service which can order compensation to be paid if the increase was unjustified.
"There is much good news here," said Malcolm Hurlston, chairman of the Consumer Credit Counselling Service. "By agreeing not to raise interest rates for people struggling to make repayments, credit card companies have taken a significant step and will help ensure bad personal situations are not made worse.
"However more still needs be done. It is essential that all credit card companies follow the example of the best and freeze charges, fines and interest on the debts of clients who are on a debt management plan."
......
There are 31 million credit cardholders in the UK, borrowing billions of pounds. About half pay off their debts at the end of every month, making interest charges irrelevant, according to the UK payments association Apacs. But the economic downturn is expected to push more people into difficulty making repayments, and into a spiral of debt.
Please don't pm me about specific questions unless you have posted and it has not been dealt with or unless the matter is confidential. Please include a link to the post you want me to look at. If you have received a defence, contact me.
Advice & opinions of BankFodder, The Consumer Action Group and The Bank Action Group are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.
I had the same email as you, but it does give you the option to "freeze" the existing rate and pay off the amount owing before closing the account. That's what I've done, and because of the treatment I've had from them I'm making it priority number one to pay them off asap!!
I had the same email as you, but it does give you the option to "freeze" the existing rate and pay off the amount owing before closing the account. That's what I've done, and because of the treatment I've had from them I'm making it priority number one to pay them off asap!!
We're making some important changes to your Egg Card agreement. It's important you understand what the changes below mean to you, so please read the following information carefully.
A summary of the changes effective from 6 March 2009:
Clause 3 - this change is to notify you that the new APR on your card is 26.9% (variable).
Clause 4.1 - this change is to notify you that the new standard variable annual interest rate you pay on Purchases and Balance Transfers is 26.9% and for Cash Advances the standard variable annual interest rate is 26.9%.
Clause 6 - this change is to confirm that if you make a Purchase of £1,500 and then repay it in 12 equal monthly repayments, the interest to be paid would be £202.88 due to your new interest rate. This example is based on a set of assumptions, so your actual interest payments may be different.
It's simple to check your current interest rates
To check what interest rates currently apply to you, log in to 'your accounts' at New Egg Home then select 'view' next to 'Egg Card' followed by the 'Statements' option. Then choose to view 'More details about your Egg Card'.
The estimated interest shown on your next statement (which is a guide to the interest you may pay) might not reflect the changes to your rates as outlined in this letter but will be reflected on future statements.
Your options
If your rate has increased, you have the option, at any time before 6 March 2009 to end your agreement, cancel the use of your Egg credit card account and stay at your existing borrowing rate. To do this, please contact us within this timescale by sending a secure message by logging in to 'your accounts' via New Egg Home
If you choose to cancel the use of your account, please be advised you won't be able to use your credit card or PIN and you won't be issued a new card when your current card reaches the expiry date. Also, if you have an outstanding balance, interest and charges will still apply at your existing rate until the balance is repaid in full and you must still continue to make your minimum monthly payments. Any regular payments you have arranged, e.g. monthly subscriptions, will not be paid from your account and you will need to cancel them with the provider and provide an alternate means of payment.
If you have any questions about these changes, please take a look at the 'Rates and charges' frequently asked questions at Egg Card home for more information.
How they can justify an increase when the base rate is at its lowest!!!
However I sent a letter through the post and shock, they seem to have ignored/not received! hmm
So I sent the message below on the 11th
Date: 11 Mar 2009
Time: 18:55
Subject:Interest increase/closure
Dear Sir/Madame,
I had sent a letter confirming I wished to close the account to avoid the increase in the interest rate charged, and had not activated the reissue of the card. However I have noted you have not acted on the letter advising of closure to remain on the existing interest rate?
Can you explain why this request has not been accepted and a way to comply with my request of closure with the account remaining on the previous rate?
Many Thanks
The response:-
Unfortunately as outlined in your notification the cut off period to 'opt out' of the amendments to your Egg Credit Card was the 6 March 2009. We've given you a reasonable amount of time to opt-out but now the deadline has passed, the option to opt out is regrettably no longer available.
The email or letter sent to you did mention you need to request this via the secure message service. So i am afraid your account won't be 'opted out and your rate will remain at the new level as outlined in your notification.
We're making some important changes to your Egg Card agreement. It's important you understand what the changes below mean to you, so please read the following information carefully.
A summary of the changes effective from 6 March 2009:
Clause 3 - this change is to notify you that the new APR on your card is 26.9% (variable).
Clause 4.1 - this change is to notify you that the new standard variable annual interest rate you pay on Purchases and Balance Transfers is 26.9% and for Cash Advances the standard variable annual interest rate is 26.9%.
Clause 6 - this change is to confirm that if you make a Purchase of £1,500 and then repay it in 12 equal monthly repayments, the interest to be paid would be £202.88 due to your new interest rate. This example is based on a set of assumptions, so your actual interest payments may be different.
It's simple to check your current interest rates
To check what interest rates currently apply to you, log in to 'your accounts' at New Egg Home then select 'view' next to 'Egg Card' followed by the 'Statements' option. Then choose to view 'More details about your Egg Card'.
The estimated interest shown on your next statement (which is a guide to the interest you may pay) might not reflect the changes to your rates as outlined in this letter but will be reflected on future statements.
Your options
If your rate has increased, you have the option, at any time before 6 March 2009 to end your agreement, cancel the use of your Egg credit card account and stay at your existing borrowing rate. To do this, please contact us within this timescale by sending a secure message by logging in to 'your accounts' via New Egg Home
If you choose to cancel the use of your account, please be advised you won't be able to use your credit card or PIN and you won't be issued a new card when your current card reaches the expiry date. Also, if you have an outstanding balance, interest and charges will still apply at your existing rate until the balance is repaid in full and you must still continue to make your minimum monthly payments. Any regular payments you have arranged, e.g. monthly subscriptions, will not be paid from your account and you will need to cancel them with the provider and provide an alternate means of payment.
If you have any questions about these changes, please take a look at the 'Rates and charges' frequently asked questions at Egg Card home for more information.
How they can justify an increase when the base rate is at its lowest!!!
However I sent a letter through the post and shock, they seem to have ignored/not received! hmm
So I sent the message below on the 11th
Date: 11 Mar 2009
Time: 18:55
Subject:Interest increase/closure
Dear Sir/Madame,
I had sent a letter confirming I wished to close the account to avoid the increase in the interest rate charged, and had not activated the reissue of the card. However I have noted you have not acted on the letter advising of closure to remain on the existing interest rate?
Can you explain why this request has not been accepted and a way to comply with my request of closure with the account remaining on the previous rate?
Many Thanks
The response:-
Unfortunately as outlined in your notification the cut off period to 'opt out' of the amendments to your Egg Credit Card was the 6 March 2009. We've given you a reasonable amount of time to opt-out but now the deadline has passed, the option to opt out is regrettably no longer available.
The email or letter sent to you did mention you need to request this via the secure message service. So i am afraid your account won't be 'opted out and your rate will remain at the new level as outlined in your notification.
Thank you for your message.
Regards
Greg Muddeman
Where can I go from here?
Hmmm, I guess they have provided you with a time-limited offer.
On the face of it looks to be fine.
Underneath, it is another variation of their original termination disaster.
Well...I say disaster. Not at this point in time, but it soon will be
Hmmm, I guess they have provided you with a time-limited offer.
On the face of it looks to be fine.
Underneath, it is another variation of their original termination disaster.
Well...I say disaster. Not at this point in time, but it soon will be
Did you ever receive that letter?
I don't remember receiving a letter, only an email. I wish I could do something, I've sent a letter, raised the issue, not activated the new card thinking like an idiot that they would keep the interest at the original rate and close the account.
I don't remember receiving a letter, only an email. I wish I could do something, I've sent a letter, raised the issue, not activated the new card thinking like an idiot that they would keep the interest at the original rate and close the account.
So you did receive the termination letter last January by email?
So you did receive the termination letter last January by email?
Ask them to re-send it.
Once you have it -- you've got them.
They would have received it by the closing date the 6th of March but they have not acknowledged it and seem to advise that I should have made an online request. I didn't I sent it through the post, wish I had read it properly and not bothered with the letter and just sent an online message.
They would have received it by the closing date the 6th of March but they have not acknowledged it and seem to advise that I should have made an online request. I didn't I sent it through the post, wish I had read it properly and not bothered with the letter and just sent an online message.
I'm confused, ask them to resend the letter I sent them in response to the email or resend the letter advising of the interest increase that I don't remember getting?
I'm confused, ask them to resend the letter I sent them in response to the email or resend the letter advising of the interest increase that I don't remember getting?
Sorry, crossed wires here.
Did you receive a letter termination your account in January 2008?
Sorry, crossed wires here.
Did you receive a letter termination your account in January 2008?
no, just email saying the rate was increasing and a new card was delivered. I didn't activate the card and sent a termination letter to stay on the existing rate.
EGG increasing intrest rates
account for some 3 years now i have been sitting at my limit for much of that time but never missed a payment - have claimed back all the over limit charges but noe they have incresed my intrest rate to a whopping 26.9% - i dont have access to another account to transferre balance (5k)
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Originally Posted by Mistermind
