Egg is the award-winning online bank with the silly name which looked set to break the mould of British banking by giving value for money.
Launched three years ago by insurance giant Prudential, it was the UK's first online bank and offered banking, investments, insurance and online shopping - and a promise not to fleece its customers like the rest of the bank highwaymen.
It kept its word - sort of.
Egg Visa card users have enjoyed market-leading rates because Egg subsidised them to build its customer base and gain a foothold in the market.
And the company's hard work paid dividends last year when it successfully floated on the stock market.
But there was less cheer for customers as Egg was forced to please shareholders by raking in more profits.
Now Egg's interest rates are no longer eyecatching bargains and its Visa APR is stalled at 12.9 per cent, up from 11.9 per cent in January.
The rise comes at a time when the bank rate has plummeted to its lowest level since the 1960s. It stands at 4 per cent and for financial powerhouses like Egg borrowing cash in the City will be even cheaper.
So what's going on?
Quite simply Egg has found its comfort zone. It is putting its energies in to winning more customers and relying on the inertia of existing customers to subsidise them and keep its profits growing.
This means if you are thinking of applying for an Egg Visa card you can still get a good deal - the Egg card APR for purchases and balance transfers is 0 per cent for six months and you won't do better than that.
But if you don't pay off your bill in full every month, it will pay to shop around for a more competitive rate after the six month period ends. These are the banks which offer better or the same rates as Egg Visa:
Cahoot Visa 8 per cent Intelligent Finance Classic Visa 9.6 per cent Halifax Classic MasterCard 10.8 per cent Hamilton Direct Bank Visa 11.9 per cent Lloyds TSB Asset Advance MasterCard 11.9 per cent Capital One Premier MasterCard 12.9 per cent First Direct Interent Visa 12.9 per cent First Trust Bank Visa 12.9 per cent
Egg does not have an expensive branch network to maintain and should be up there with internet rival Cahoot. With only 2,000 employees and three offices (London, Dudley and Derby), It should easily outstrip High Street giants Halifax and Lloyds TSB.
Even if you pay your credit card bill in full every month (and the APR is not of prime concern), the perks with an Egg card aren't that great.
There is no annual fee but you only get 45 days interest free. There is a 0.5 per cent cashback scheme but its rewards are so tiny it's not worth worrying about.
On the plus side Eggs allows cash withdrawls at the excellent APR of 15.2 per cent - Capital One APR for cash is 21.7 per cent - and you can manage your account 24 hours a day via a WAP enabled mobile, over the phone, or on digital TV.
So the moral of the story is - if you want a cheapish credit card, Egg is for you. But if you want the best deal, look elsewhere.
One more thing...Egg is currently offering a reduced rate for balance transfers for existing customers. The offer is made by email and can't be found on the website. Haggle.
How helpful would this review be to a person making a buying decision? Rating guidelines
Advantages: VERY low interest rates inc for balance transfers, online balance details Disadvantages: missing a payment is costly, difficulty in getting card up and running but my experience might be different to others, some probs in using site to make additional payment
judithritchie 06.03.2001 ·
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Ciao members have rated this review on average: very helpful
Review of Egg Card
Advantages: Both cashback and payment protection offered, good credit limit monitoring. Disadvantages: Cashback recently reduced, website is quite slow.
Briz_Hatchings 10.10.2001 ·
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Ciao members have rated this review on average: very helpful
Review of Egg Card
very helpful by (98%):
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