My instant reaction to this news is one of horror! But then again, Barclays has also just announced one of their longest term 0% offers for new cardholders.
As all good frugalers know, Egg has been our friend for a long, long time. Many of us cherish our Egg plastic. We have celebrated many anniversary transfers at 0% and switched funds throughout the accounts, using 'Egg Money' to hatch all sorts of schemes, gaining high interest rates from savings accounts. Meanwhile, we'd be repaying minimum monthly amounts at 0% for the specified period, then repaying the lump sum on termination - no fees incurred, no interest paid. I guess we are the types of customers that financial lenders DON'T like!
As stated on their site, the "1% cash back Egg Money is a credit card that gives you 1% cash back on all your spending (maximum £200 cash back per year; if less than £5 no cash back is payable)." What this means for many of us is that everything goes on plastic, every bill gets cleared each month, no fees, no interest charged and, for the priviledge of using their card, we get paid.
Many of us have, over the years, been collecting that 1% cashback on all our purchases, cashing in each March or April. Personally, I never spend enough to get anywhere near the £200, but that extra £50 or so always pays for something in the Frugaldom household budget, even if it is only the annual household contents insurance policy.
We eventually had to give up on balance transfers with the introduction of 'transfer fees'. We dealt with them admirably, at first, when banks like ICICI were able to offer rates as high as 6.5% and still provide us with instant access, whilst Egg offered a 0% transfer fee and 0% interest rate - it was an absolute no brainer to overlook that kind of offer. Even with the introduction of the 2% or sometimes 3% transfer fees, it was still possible to glean a few extra pounds interest from their money - similar to the way the banks 'invest' to earn from our money!
But then there was a mass hysteria about charges and misselling of income protection payment schemes. The nation rebelled, celebrating the great Martin Lewis, hailing him the people's champion to all who were in debt. To all and sunder, he became known as the 'Money Saving Expert'. Case after case was heard, the financial institutions were being forced to repay customers thousands of pounds of money they had been, dare I say it, 'duped' into paying.
Then the banks began collapsing! We saw bail out after bail out - many money-savers became alarmed when, in 2008, Icesave went topsy turvy. This was a huge shock to many systems, none less than the UK local councils that had 'invested' IK Government money! Many had chosen Icesave over ICICI for their 'stoozing' funds. The UK banks began to wobble - you all know that story...
Around March 2009, Bank of England base rates sank to an all time low of 0.5% , obliterating any opportuity for 'stoozing', as it had become known throughout forum networks. Interest rates have never recovered. Two years on, Bank of England base rates are still 0.5%
Incredibly, credit card interest rates sem to have soared, with many exceeding 19% - they are clawing back what they think is rightfully theirs, coming at borrowesr with all guns blazing. But with no debts, they can't earn from our 'type'! Therefore, it should surely come to pass that they will prevent us from earning from them!
Talk revolved around the introduction of monthly fees for cashback credit card holders - they may have implemented it for new applicants, for all I know, but they haven't introduced it to those of us who have 'played the game' for several years. But we're still expecting something to happen.
As frugal lifers, we were left with very little choice. For cashback credit cards, there are still several options but they are limited. These, in my opinion, have Will Barclays buy over our accounts? Will they restructure the cashback clause? Will they abolish it all together?
Personally, I suspect that the opportunity to earn between 10p and £3.84 per week from spending on an Egg credit card will be lost. Who, then, will we turn to for our free cash? Well, there's always the likes of Topcashback! For now, I'm gleaning my 1% from Egg and my percentage from these third party mediators. Their ability to spread out a thin layer of the advertising & marketing revenues from large companies appeals to me. It works for me, for now... make the most of it while you can. I suspect that the end of the cashback era could be nigh. (But I hope I'm wrong.)
MAKE HAY WHILE THE SUN SHINES!
At the rate the bargains are disappearing, we may all end up preferring to use a BREAD Card while researching other possibilities for making a an extra penny in the pound for our frugal budgets.
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