Eggnog (Egg Card)

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Product:	Egg Card
Date:	30/11/01 (30 review reads)
Rating:

Advantages: cheapish

Disadvantages: not as cheap as it should be

Egg is the new online bank with the silly name which was set to break the mould of British banking by giving value for money.

Launched three years ago by insurance giant Prudential, it offered banking, investments, insurance and online shopping - and a promise not to fleece its customers like the rest of the banking cartel.

It has 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 awrad-winning company's hard work paid dividends last year when it successfully floated on the stock market.

But there was less cheer for Visa customers as Egg was forced to please shareholders by raking in more profits.

Now Egg's interest rates are no longer the eyecatching bargain they were 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 Direc
t 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 - if you want a cheapish credit card, Egg is for you. But if you want the absolute 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.

If you want to apply go to the website and fill in your details online. You must be over 18, UK resident, with regular internet access and a bank account which accepts direct debits.

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