Egg offers increased rewards – at a price
UK internet bank Egg is launching a new credit card offering cash rewards from everyday expenditure and expensive items.
The card will cost £12 a year and the company says that, unlike no-fee credit cards, the Egg Money World MasterCard will justify its fee through an attractive package of benefits and rewards.
If the card proves successful it may lead to fees on credit cards becoming more common as card issuers look to boost revenue in the economic downturn – less than 10% of UK credit cards currently have a fee. Fees would also help cut the high number of dormant credit cards that cost issuers money to maintain.
The premium credit card’s rewards are aimed at attracting regular users of other banks’ cards. Customers can apply for the card online and get an immediate decision. Although it may face accusations it is encouraging cardholders to get further into debt at an economically challenging time, it seems that Egg is targeting people with good credit ratings. In 2008 the bank cancelled the accounts of 160,000 customers it judged to be a credit risk.
The new card’s benefits include:
– Life of balance transfer – at 8.9% and no balance transfer fee
– 1% cashback – on all purchases with a maximum cashback of £200 per year
– Egg Rewards – up to 25% off discounts and rewards at some retailers, including Virgin Wines and Lasminute.com
– Event cover – for tickets over £20 if the cardholder is unable to attend
– Purchase protection – for items over £75 bought with the Egg Money credit card. Covers against theft, loss or damage for 90 days after purchase. There’s a limit of £3,000 per item, maximum per claim of £6,000 and maximum per year claim of £15,000
– Price Promise – covers items costing more than £50, if found cheaper within 30 days in a 30 mile radius the difference will be refunded. Online purchases are not included
– Extended Warranty – additional 12 months warranty on electrical items costing more than £50. It applies once the manufacturer’s warranty expires for up to 24 months from the date the item was bought. Maximum of £1,500 claim per item and up to 5 items per year.
– Personal travel accident insurance – inlcudes the cardholder, spouse or partner and dependent unmarried children. This though is not a substitute for travel insurance.
– Online spend tracker – an online function which categorises the cardholder’s monthly spend ontheir online statement
– Egg Money Manager – allows cardholder to view all their online accounts from any bank on one page.
EGG CEO Bert Pijls commented: “Egg Money is the only credit card to combine 1% cashback, discounts, protection and a low life of balance transfer rate. To offer this level and variety of benefits to customers there is a small fee of £1 a month; good value for what we believe is the best all round card on the market.