Bonus savings rates, high-interest current accounts, balance transfers and other times you need to read the fine print carefully

Here’s why you should always read the terms and conditions on any financial deals you take out – and the potential risks if you don’t

It’s sadly true to say that the best-sounding financial products often come with a sting in the tail.

Whether it’s a headline-grabbing interest rate or a fee-free deal that turns out to be riddled with technicalities, the devil is often in the detail.

In this article, we look at five of the biggest traps to watch out for across savings, current accounts, credit cards and mortgages.

1. Savings rates that vanish overnight

Our nest eggs are one of the most important parts of our financial future, so it’s vital that we understand every last rule and regulation on our savings accounts.

Worryingly, some of the top-paying products are less generous than they initially appear.

This is because headline rates are often boosted by short-term bonuses that disappear after a few months, leaving you with a much lower return if you forget to switch.

Take Trading 212’s cash ISA. At present, the platform is a market leader and pays 4.92%.

However, 0.82% of that rate is a bonus that only lasts for 12 months. After that, you’re left earning 4.1% – and that applies only to new deposits, with a lower rate if you transfer in money from elsewhere.

2. High-interest current accounts with low limits

While switching to a new current account can certainly have significant financial benefits, it’s important to be realistic about the amount you can earn.

For example, some current accounts advertise top headline interest rates on your in-credit balance.

However, you may only earn that rate on a (relatively) small slice of your money.

For example, Nationwide’s FlexDirect account pays a table-topping 5% AER on your balance but only up to £1,500 for the first 12 months.

This means the most interest you can earn is £75 over the course of a year. After that, the rate plummets to 1% AER.

The best bank accounts for switching bonuses 2025

3. Balance transfer credit cards with eye-watering fees

A 0% balance transfer card can be a great way to cut payments and clear your debts faster – these products allow you to shift an existing debt without paying interest for a set period.

However, it makes sense to do your sums before committing yourself.

For example, some of the longest 0% offers come with pretty steep upfront fees that can wipe out your savings, especially if your balance isn’t that large.

For example, NatWest offers up to 34 months interest-free, but with a 3.49% transfer fee – that's £87.25 on a £2,500 balance.

In some cases, a shorter 0% period with no fee could actually save you more.

Alternatively, Barclaycard’s no-fee option gives up to 14 months 0% with zero upfront cost – ideal if you only need breathing room for a short period and can clear your debt quickly.

However, you shouldn’t just chase the headline numbers.

Try using an eligibility calculator to see what rate and term you're likely to get before applying and always check the total cost (including fees) over the time you expect to repay.

4. Tempting mortgage rates with hefty fees

Unsurprisingly, home loans come with more fine print than almost any other deal, so it’s especially important to keep your eye on the ball.

Many of the lowest rates come with fees of between £1,000 and £2,000, which can dramatically reduce their overall value – especially if you’re borrowing a relatively small amount or planning to switch again soon.

For example, NatWest is currently offering a five-year fixed-rate mortgage at 3.99% with a 60% LTV.

That makes it one of the lowest rates available, but it comes with a hefty £1,495 fee.

By contrast, First Direct has a five-year mortgage with a 60% LTV that comes with a rate of 4.02%, but has a fee of just £490.

This will make it the cheaper option for most borrowers despite having a higher rate.

Why mortgage lenders turn you down

5. Cashback credit cards: great perks that quickly expire

Cashback credit cards often promise easy rewards on your existing spending.

However, the reality of these bonuses can be more limited and short-lived than advertised.

Take the market-leading American Express Everyday Cashback card.

It offers an impressive 5% cashback, but only for the first five months and the maximum earning is capped at £125.

After that, the rate then drops to 1% on annual spend over £10,000, and just 0.5% on spend below that.

The bottom line

Let’s be clear. We certainly are not suggesting that any of the offers in this article don’t represent a great way to manage your finances.

However, it’s important to be clear about what you’re getting.

Financial products are often designed to dazzle at first glance – but the small print is where the real story lies.