Egg is the first credit card company for over a decade to charge a monthly fee for use of its mass-market credit card.

The new Egg Money World Mastercard, which will include perks such extended warranties on electrical goods and cash back on purchases, will charge £1 a month when it is launched next week.

Many experts claim that not just credit card providers but also the banks are trying to increase their income before the Government’s White Paper comes into force on proposals to crackdown on credit card rip-offs which covers banning sending out unsolicited credit card cheques as well as stopping lenders from raising borrowers' credit limits without their consent, the White paper is also looking at capping interest rates on those already signed up to the lender.

Debtwizard comment

This could just be the start of something quite big with all the other credit card providers quickly following suit. A £1 per month may not sound a lot but over the coming months or years this could easily be increased once the consumer has got used to paying a fee for the credit card.
Some borrowers will not be affected by this as they will keep on top of their spending and recoup their annual charge through the cash back scheme being offered but there will be many thousands that will find themselves trapped in the cycle of debt.

They  will have to pay this monthly charge whether they like it or not so you can see how this potentially will become a big earner for the credit card companies and this is on top of their cash withdrawal fees, balance transfer fees and transactions abroad.

Bottom line; don’t use credit cards unless you can repay the balance at the end of the month.