Interest rate based on behaviour

[thecornflake]

I received the following from Egg today -

 

At Egg, we treat customers as individuals – both in the service that we provide and in the products we offer. In line with this, we're now personalising the interest rates on your Egg Card based on how you've maintained your account, and our assessment of how you've managed your finances.

 

What does this mean?

The new interest rates you'll pay are set out below and are effective from 12 March 2007. You'll also see below a summary of other changes to your Conditions and the dates they become effective. 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 12 March 20073 – this change is to confirm we're increasing the APR on your card from 17.9% to 25.9%.4.1 – this change is to confirm we're increasing the variable annual interest rate you pay on purchases and balance transfers from 17.9% to 25.9% and for cash advances the variable annual rate increases from 22.9% to 28.9% pa.

 

So based on how I have managed my money they are increasing my interest rate!

 

Are any other credit cards doing this? Does this maybe strike anyone else as being a little unfair?

[zootscoot]

Possibly open to challenge under UTCCR 1999 based on sch 2(1)(J) when read in conjunction with sch 2 (2) (b). In that it a term which allows a business to unillaterally vary terms can only do so where it gives a valid reason or if the consumer is free to end the contract immediately.

 

If you have a balance on your credit card it could be argued that you are not free to end the contract immediately.

[thecornflake]

Possibly open to challenge under UTCCR 1999 based on sch 2(1)(J) when read in conjunction with sch 2 (2) (b). In that it a term which allows a business to unillaterally vary terms can only do so where it gives a valid reason or if the consumer is free to end the contract immediately.

 

If you have a balance on your credit card it could be argued that you are not free to end the contract immediately.

 

I do have a balance. I was thinking along the lines of defamation, but then it would apply to higher rates based on bad credit, which everyone does.

 

I'll look into the UTCCR though.

[Advoc8]

It's definitely not defamation, for a start they've not published this.