Money: Show-Stopping Deals That Soon Run out of Steam ; Melanie Bien Puts the Spotlight on Credit Cards and Other Financial Products That Don't Have Legs Once the Introductory Period Is Over

Article excerpt

There's nothing like a bargain to capture our interest, which is why so many of us go shopping in the high-street sales. The same is true of financial products, with special deals such as 0 per cent introductory offers on credit cards, high savings rates on internet accounts and big discounts on mortgages.

But if something looks too good to be true it probably is, and you'll end up paying for the discount or special offer in other ways, notably poor customer service and higher rates further down the line. In new research from the internet bank Egg, 78 per cent of those surveyed said that after their discounted period they felt "forgotten" by their provider.

Worse still, a number also felt cheated. Some 71 per cent considered themselves to have been "ripped off" after their deal ended, when rates often reverted to more than those charged by rival companies. Those who felt particularly hard done by were savers (68 per cent) and credit card borrowers (67 per cent).

"For years the banking industry has been designed to exploit consumer apathy," says Andy Deller, banking and insurance director at Egg UK. "Why bother offering a good ongoing rate when most consumers won't bother moving anyway? Hopefully this latest expose will encourage more to take that leap and ditch their rip-off products."

Although switching is easier than ever, 61 per cent of those surveyed said they couldn't be bothered. And when choosing a financial product, they tended to pick the best rate above long- term value for money.

Whichever deal you choose, it's important to look beyond the initial rate at customer service and at likely rates further down the line. Some credit cards providers, including Capital One, Nationwide, Egg, Marbles and RBS Advanta, offer 0 per cent annual percentage rate (APR) for an introductory period - usually six months - before reverting to the standard rate.

But standard rates vary greatly between providers so unless you switch cards again at the end of the introductory term, or plan to pay off your balance each month, choose one with a long-term competitive standard rate. For example, Capital One charges 12.9 per cent while RBS Advanta customers will pay 15.9 per cent.

If you can't be bothered switching, you could choose a Cahoot card: it has no introductory offer but charges a standard rate of 8 per cent.

Savings accounts often lure customers in with attractive rates, only for these to look less competitive months later when the provider dawdles when raising rates in line with the Bank of England base rate, or cuts rates even though the Bank hasn't made a change.

The best way to make sure rate changes are reflected in your account is to choose one that tracks the base rate. …