Egg charges monthly fee on new card

Internet financial giant Egg has recently announced that it will be charging a monthly fee of £1 on its new credit card, which is the Egg Money World Mastercard.

Consumers that have the card will therefore end up paying £12 a year for using the card, which offers certain benefits such as cash back on purchases and extended warranties on electrical items. However, some industry officials are concerned that Egg may have started a trend amongst credit card providers.

It is thought that the ongoing crackdown on credit card providers may mean that more providers will start to charge monthly and annual fees in order to recoup the losses that may result from the crackdown.

Part of the crackdown on credit card firms has included a ban on sending out unsolicited credit card cheques, and could mean a cap on interest rates, which have soared amongst credit card providers.

The various new regulations could mean huge losses for credit card firms, who will look to make the money back elsewhere.

An official from Egg stated: ‘At Egg we wanted to create a card that gives people real value. So we reviewed the market, matched it against what certain customers want, and created one stand-alone card.’

Whilst the monthly fee charged by Egg is just £1 some industry officials have said that this fee may increase in the near future, which could financially crippling for some borrowers.

One industry expert stated: ‘Egg is the first major credit card provider to introduce fees on mainstream products, and this is only the tip of the iceberg. We are likely to see more providers follow suit. Egg’s move is indicative of a changing market.’

Another official stated: ‘I hope it’s not going to set a precedent that the rest of the market decides to follow and that paying a fee for your card becomes the norm.’