Egg piles on changes to terms and overall customer satisfaction drops

Posted in 'Personal Finance' by Richard Catlin

21 April 2009

Easter saw troubled credit card issuer Egg take another swipe at its already disgruntled customers with several significant revisions to its terms and conditions.

The online bank informed its cardholders that the interest payable on ‘in-credit’ accounts is being reduced from 4% to 0.5% from 24th April, and will disappear completely from 15th May. The reasoning, based on the Bank of England base rate being at a record low, may not sit too well with customers who have seen the interest rate they are charged increase at the same time. Other changes include a staggering £5 minimum charge for cash withdrawals on the card, made at ATMs.

Since taking control of Egg in May 2007, current owners Citigroup have caused anger amongst existing customers , and numerous bad headlines. February 2008 saw them close the accounts of 161,000 card holders with just 30 days notice, a move that Egg claimed was based on changes to the credit ratings of those customers. This reasoning was questioned when it turned out that many of those affected had near-perfect ratings.

They followed this up in February of this year by raising the typical APR for over 500,000 existing card holders by as much as 7%.

Egg is not the only credit card issuer to risk the wrath of their customers and give them reason to switch to a new lender. Other examples include:

• Saga closing the accounts of thousands of pensioners because they didn’t have high enough incomes.
• Capital One increasing their typical APR for both Platinum and Classic customers.
• Barclaycard closing a call centre in Scotland, with the loss of 900 jobs.
• Nationwide introducing charges for overseas transactions for some customers.
• A wave of card issuers cutting credit limits – in some cases by over £10,000.

Our Banking and Credit Card Survey revealed that the overall level of customer service that credit card issuers provide has fallen back since last measured in 2008. Where 63.1% of respondents last year described the service they receive as 'Excellent' or 'Very Good', this figure fell to just 55.7% in 2009.

If you’ve got reason to feel aggrieved with your own credit card issuer, or simply want to see if you could save money by switching to a new lender, you can see which cards are matched to your credit rating for free on checkmyfile. By using your free credit score or credit report to find a lender, you’ll vastly improve your chances of being accepted first time.