Egg to raise credit card interest rates

The lender is to raise the rate on both cards from 14.9 to 15.9 per cent a year. The rate on cash withdrawals will rise from 17.9 to 20.9 per cent. But company spokesman James Thorpe said: "If you compare like with like, we're still pretty competitive."

Egg credit cards have been popular with borrowers over the past three years, with the lender offering lengthy interest-free introductory offers and market-leading rates of cash back. But over the past year, the bank has cut its 0 per cent offer to six months for new customers and reduced cash back.

However, Egg pointed out that its most-established Green Visa card now offered 0 per cent interest on balance transfers for up to five months each year. The card pays no cash back, other than at a handful of "retail partners", but Egg's newer Blue Mastercard offers 0.5 per cent on all spending. In addition, Green offers six months' interest-free credit on balance transfers and new spending to new customers, while Blue offers five months at 0 per cent, but only on spending.

Moneysupermarket, the price comparison service, pointed out Morgan Stanley offers cash back of up to 2 per cent, while Halifax's 0 per cent introductory deal lasts 12 months.