CompareTopCards.co.ukEgg, the internet bank and part of Citi, announced it will be launching a new credit card tomorrow, (14 July) the Egg Money World Mastercard and will have an annual fee of £12. This move from Egg, comes after the Govt. last week released a white paper with proposals to ban unsolicited credit card cheques, increase of credit card spending limits without the borrowers consent, limits on raising interest rates on existing debt etc.
With Egg's move, the first major credit card provider announcing a fee based card, industry watchers feel this may open the floodgates for similar moves by other credit card providers. With this credit crunch, consumers have changed their credit card spending habits which has had a negative impact on credit card companies revenues and profitability.
This drop has been a result of 2 main factors:
- Drop in percentage of consumers carrying balances on their credit cards (Auriemma Consulting group reported a 40% year over year drop) and
- Increase in number of consumers unable to payback their credit card bills (over 10% credit card accounts were written off in 2008 vs 3%-5% in 2006).
Credit card companies will try to maintain their profitability by switching more consumers to fee based credit cards. No fee cards will still be available, but may not offer the best deals or benefits. According to Auriemma Consulting Group by 2010, all major credit card providers will have fee based credit cards.
The Egg Money World card will offer 8.9% rate on balance transfers for life (no fee) and carry a 17.8% typical APR. The card will also provide a 1% cashback upto £200/year, which can more than makeup for the £12 annual fee if used correctly. We feel this maybe a good no fee long term balance transfer offer for some, based on their spending habit.
Once we get all the details of the credit card we will be adding it to our comparison tables. To see if Egg Money World Credit Card is the best option for you, use our calculators and see your savings.
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