Re: Egg Money


Roger Mills wrote:

Any Egg Money account holders out there who can explain how the thing
works in practice?

I'm not one, but it's an interesting story.


My wife has recently opened an Egg Money account - which I understood to
be a hybrid between a credit card and a current (or more likely, savings)
account.

The blurb says that you get 4% interest on positive balances, and up to
50-odd days interest free credit on credit card purchases. When you look
at your account on the Egg website, there is provision for displaying both
a +ve and a -ve balance.

Are you saying there are layout is such that you would expect to be able to
have two separate balances running, +ve and -ve (e.g. separate columns)? It
would be unusual to regard such a beast as a single account, even if they
are shown in an otherwise integrated way. In other words, if it *is* a
single account, I would not really expect to see separate balances at any
time.

If they really do say 4% interest on +ve balances *and* up to x days
interest-free credit, that sounds like double counting of benefits. But do
they really say that?

As a non-customer I had a look at some of the website blurb, specifically
the 'What is it?' page and the 'Benefits and features' page.

I don't think it's technically misleading, but because I had read your post
first I can't sure whether I would have been misled without having done so.

Consider the statement "No monthly payments required when you have a
positive balance." Under your interpretation, there wouldn't be any point
in stating such a thing, because you'd always have a positive balance
(albeit possibly a negative one as well).

I had assumed that you could have both at the
same time, and that it would work like this:
Pay in (say) £500, and a +ve balance of £500 would show up and earn 4%
p.a. interest.
Make credit card purchases (say 8 @ £50), so that a -ve balance of £400
would be displayed alongside the +ve £500.
On the due date for the credit card, £400 of the +ve balance would be
used to pay off the debt, leaving a +ve balance of £100 and a negative
balance of zero.

But it doesn't seem to work like that! Since opening the account, my wife
has paid some money in and made 2 CC purchases. When we look at the
on-line statement, there is *only* a +ve balance displayed - being the
amount she paid in *less* the value of the purchases. So, in effect, she's
being charged for the purchases immediately rather than on the due date.
What has happened to her interest free credit? Why isn't she getting
interest on the *whole* inpayment until it's time to pay the credit card
bill?

Is this how it's supposed to work? If so, she'd be better off investing
the inpayment elsewhere, letting the CC debt accummulate, and then paying
it off on the due date like a normal CC. Or am I missing something?

This isn't meant to sound flippant, but I don't think they would have
unleashed the wrong implementation to the waiting world. They are not an
arm of the government, after all! But no, I don't think you are missing
anything: I can't see the point of it either. At least not yet.

The trouble is, I can't immediately see the benefit of it even if it worked
the way you assumed it would. 4% is respectable, but nothing to write home
about.





.

Relevant Pages

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