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Egg launches new rewards credit card

Discounts at 1,500 outlets but beware the pitfalls

The Egg card offers discounts on online purchases at 1,500 selected outlets, including Asda, Sainsbury’s, Tesco, and Homebase. It also offers 0% balance transfers for up to 14 months.   

Reward rate varies 

Which? credit card expert Martyn Saville commented: ‘The new card from Egg offers an interesting, but complex reward scheme. However, it also comes with many potential pitfalls.

‘Available only on online purchases from particular retailers, the reward rate can be very generous, but varies depending on the retailer, so make sure you check the list of online shops participating in the scheme before applying for the card. As the reward deal is in conjunction with cashback site Quidco, chances are that in many cases you’ll find just as good a deal on individual purchases using a voucher code or cashback site direct.

Balance transfer warning

‘The Egg card also offers a 0% deal on balance transfers until 1 August 2011 (subject to a 3% fee), making it a good choice for switching existing debt. However, it should not be used for further purchases once you’ve transferred a balance, no matter how tempting the rewards may appear. This is because of the negative order of payments system operated by Egg.

‘Although the rules for all credit card providers will be changing in January 2011, anyone who transfers a balance to the card and then spends on it this year will be caught out. Any repayments made on the card will be allocated against the cheapest debt first, in this case the 0% balance transfer. Once the 0%-on-purchases deal runs out after less than three months, every penny of each purchase made on the card will be charged at the card’s standard APR of 17.9% until the 0% balance transfer is paid off in full. If you decide to apply for the balance transfer deal, under no circumstances should you spend on the card – the high APR will soon wipe out the rewards gained on your shopping.

‘Many consumers looking for a cashback or reward credit card would be better off going to a voucher or cashback website to find the best online discount, then using a Which? Best Rate cashback credit card to get straightforward cashback on all their purchases.’

Which? Best Buy credit cards

If you need advice to choose the best credit card for your needs, read the free Which? guide to choosing a credit card. And if customer service is important to you, make sure you check our Which? Recommended Providers before choosing a card.

Once you know the best type of card for you, check out Which? Best Rate credit cards to find the most competitive deal available today, whether it’s a cashback card, a card offering 0% on purchases or the longest 0% deal on balance transfers.

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