Egg card disappearing

31st March 2011  

Egg credit cardsAfter a sometimes troubled existence, the Egg credit card finally closed its doors to new customers yesterday.

Both the Egg card and Egg Money World MasterCard pulled up the ladder on new business as a result of the sale of the customer base by Citigroup to Barclaycard.

In it’s the day the Egg card was the fashionable credit card to be seen with. When it was launched in 1998 it was one of the first of new generation of card brands with a competitive and original proposition and was a huge success for its founder’s the Prudential life assurance group. The Egg card was the first UK mainstream cashback credit card, offering 1% of the customers spend back to them via their Egg account.

Prudential had seen the writing on the wall for the life insurance industry, and wanted to diversify into other business areas and saw a fashionable credit card as something they could immediately sell into their existing customer base.

In January 2007 Prudential agreed to sell the Egg business to Citigroup for £575 million. In February 2008 Citigroup came under serious criticism from consumer groups because it announced it was going to cancel the credit cards of some 161,000 (7%) of its customers. The company publicly declared that it was merely adjusting its lending criteria to weed out the riskiest customers.

However, many eminently credit worthy customers came forward with evidence that suggested that in fact the new owners were just booting out unprofitable customers who didn’t carry an interest bearing balance on their Egg credit card.

Later that year the Egg brand was slammed by the Financial Service Authority (FSA) in a misselling scandal over Payment Protection Insurance (PPI) and later fined £721,000 (read our comprehensive PPI Mis-selling Guide).

We understand Egg’s existing 1.15 million customers won’t be affected by the closure to new business, and all existing balance transfer introductory rates and promotional deals will be honoured.

Current Egg credit card customers still benefit from the 1% cash-back deal, buts it’s currently unclear if all the Egg card perks and benefits will survive the takeover. It’s expected the formal completion of the deal will happen in June 2011, and we expect before the end of the year, existing Egg customers will receive a new Barclaycard in the post finally consigning the Egg credit card to history.

Citigroup will continue to service and support customers with original Egg loans, insurances and mortgages.

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