sensible customers banned by egg

Egg, the internet bank, is to ban some “sensible” customers from spending on their credit cards as well as those it says are risky.The lender last week sent out an unexpected warning to 161,000 card users saying that it will end their agreements in 35 days time, because they have a “higher than acceptable risk profile.” The bank is desperate to offload risky borrowers in the wake of the credit crunch, after Citgroup, its parent company, was left exposed to bad debts in the US sub-prime crisis. However Egg is even blocking some borrowers with perfect credit histories from using their cards.

Experts said that the bank, which has 2.3 million card customers, is effectively penalising these borrowers for being good with their money because they are not profitable customers, and said that other banks are likely to follow Egg’s lead.