Some carriers of the Egg visa card have been hit with a swingeing hike in the APR of their card, with new rates of 26.9% reported on accounts that used to feature rates closer to 20%. This type of rate increase may seem strange in an age of plummeting interest rates, yet the true purpose of the hike is revealed later in the communication from the bank.

Customers hit by the increase are given the option to cancel the use of their account within 30 days, and so retain their current borrowing rate. This of course that their cards can no longer be used, although repayment must continue until the debt is paid in full.

Egg have previous form in this area, having twelve months ago canceled the accounts of 161,000 of its customers with dubious explanations of the reasons why.

It’s hard not to come to the conclusion that this latest move is another attempt for owners Citi Bank to reduce their exposure to consumer debt, although this time they seem to have talked to a public relations company before making their move.

This entry was posted on Wednesday, February 4th, 2009 at 4:05 pm and is filed under General Credit Card News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.