What’s going on with the Egg card?

Banking giant Egg recently shocked tens of thousands of its own customers by announcing out of the blue that it would be cancelling their credit cards in just over one month’s time. With many consumers reliant on their credit cards, and with the credit crunch making it increasingly difficult for consumers to get credit with other lenders, this has left many of those on Egg’s ‘hit list’ in the lurch, and many have expressed their outrage at Egg’s decision to cancel these credit cards for no good reason.

Egg officials have decided that around 160,000 credit card accounts are going to be cancelled, and cardholders that are on the list will find that their cards stop working in a little over one month. According to Egg the people that have been put on the hit list are those whose credit ratings have fallen or deteriorated since they opened their credit cards accounts, but many of those that have been informed that their cards are being cancelled insist that their credit rating has not deteriorated, and that they actually have excellent credit.

One official from Egg commented on the situation after outraged customers flooded news sites and the lender with complaints. He official said that Egg had made the decision to cancel the credit cards of those that it deemed no longer suitable to lend to. He added that this was regardless of their credit status, which seems to contradict the lender’s earlier statement that the account closure was targeted at those whose credit ratings had actually declined since they took out their cards.

Some of the people that have been affected by the credit card account closure have been left bewildered, because they have stated that their credit rating is excellent, has not deteriorated since they opened their Egg credit card accounts, but they are still being penalised by the credit card issuer along with those whose credit ratings have fallen since their accounts have opened.

Although it is little consolidation to those who have had their credit cards cancelled without any real explanation Egg has stated that it is not demanding that the balance on the credit cards be repaid in full right away. Customers that have been affected by the account closures will still be able to make minimum repayments on their balance, or can pay more each month if they wish, in the usual way, in order to get their balance cleared. However, after the expiry of the card in just over a month these customers will no longer be able to run up any more debt on the cards, and once their balance has been cleared the account will then be defunct.

Many lenders including credit card companies have had to increase stringency when it comes to lending as a result of the financial turmoil caused by the credit crunch. However, whilst Egg cheerfully informs confused customers that they can no longer have credit the lender still continues to put out glossy advertisement on television touting for more business for its credit card division.

Tom Smith
19th February 2008

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