UK Current Account Sweeteners That Can Turn Sour

By: MoneyFacts

Current accounts can offer some fantastic perks for switchers or savers, but if consumers failed to grab a top deal last year they would be disappointed to know that some banks have clawed back their perks.

Additionally, using the overdraft facility on some of these accounts over a long period can turn upfront cash sweeteners quite sour. The Current Account Switch Guarantee is well established, following its launch in 2013, but the latest research by Moneyfacts.co.uk can reveal that cash switching incentives, which could be a big enticement to switch, are in fact being cut down.

Comparing what’s on offer today with last year’s deals reveals that first direct, Halifax, M&S Bank and The Co-operative Bank have all reduced the amount they offer in upfront cash for switchers, while Smile and Clydesdale/Yorkshire Bank have removed their £150 upfront cash incentive entirely.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“While it’s disappointing that there is less cash on offer compared to last year, this shouldn’t discourage consumers from considering a switch if they are on a poor deal, because there are still some fantastic offers around. However, consumers can only be certain of choosing the right current account if they assess the overall package, which can be time consuming.
 
“Customers who choose rashly could easily be handing back their cash perk in overdraft fees if they dip into the red for an extended period, thanks to the inflated fees some of these accounts can charge. As an example, the £100 upfront cash with Halifax looks appealing, but use the account badly and the monthly overdraft fee can make you owe them £80 in charges.

“Other perks are being cut back too, such as lucrative credit interest rates, with Lloyds Bank, Santander and TSB having cut down their top interest rates in the last six months. You could then assume that the cost of borrowing would also be falling thanks to last year’s base rate cut, but that’s just a myth, as accounts that charge usage fees have been left untouched.

“Anyone who is still on the fence about switching their current account would be wise to consider switching soon, while the perks are still around, but they should remember to tread carefully and choose an account that addresses all their financial requirements, otherwise that cash sweetener could easily turn sour.”

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Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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