10 ways borrowers are caught out on credit cards and current accounts Here we detail the top 10 pitfalls to watch out for. 1) Rubbish loan and credit card rates - despite attractive headline deals Personal loan rates dropped to their lowest point in the past two years, but there's a catch. The best loan rates have plummeted from 7.5pc to 3.8pc in just two years, yet the vast majority of people who apply won't be eligible for the headline rate. Telegraph research has established that up to 90pc of borrowers are either rejected for the loan outright, or offered a far higher rate. Four lenders offer personal loans for less than 5pc to new customers borrowing between £7,500 and £10,000. Sainsbury's Bank tops the best-buy tables with 3.8pc, with M&S Bank (3.9pc), Hitachi (4pc) and HSBC (3.9pc) not far behind. By law, these lenders must offer 51pc of all accepted applicants the headline rate. But this inevitably means that the vast majority of borrowers are rejected outright. According to research compiled for The Telegraph by Fairerfinance.co.uk, more than half of major companies fail to properly inform customers that they may not get the headline rate. James Daley, or Fairerfinance.co.uk, said: "In some cases, borrowers are offered significantly higher rates once they've completed their application, by which point they've already left a foot print on their credit file. If they cancel the application and go elsewhere, they may find it more difficult to get accepted. 2) Miss a payment and lose your 0pc deal Zero interest credit cards come with a catch. Fail to make the minimum payment or accidentally exceed your credit limit, and the lender will charge you a hefty interest on everything you've spent. Mr Daley said: "0pc deals for up to three years sound like a gift. But if you miss a payment, many credit card companies will invalidate the whole offer period, and will start charging you interest at the full rate. "Worse still, some providers don't make this clear to customers," he said. 3) Interest is charged immediately on some purchases Savvy borrowers already know not to use their credit card at a cash machine - where interest is charged immediately - but lenders will slap an interest charge on other transactions, too. Gambling is treated as a "cash advance" by lenders and therefore the entire transaction incurs interest. For example, the NatWest platinum card will charge up to 28pc on any bet a customer places. Traveller's cheques, foreign currency exchange and gaming chips may also be treated as a cash advance. Mr Daley said: "If you top up an online gaming account, or use your credit card at the bookies, your credit card provider may start charging you interest immediately. And cash withdrawals are often charged at a higher rate of interest. Few card companies make this clear to customers," he said. 4) Banks can raid your bank or savings if you hold other products with them Current accounts are a lucrative means for banks to cross-sell customers loans, mortgages and credit cards. This has fuelled mis-selling scandals - such as inappropriate card payment protection or PPI insurance - which began as cross-selling activities. A bank can raid your current account if you fail to pay for such cross-sold products. Mr Daley said: "If you have a mortgage, loan or credit card with your bank, they have the right to raid any money in your bank account or savings account if you can't pay them back." This can leave a customer unable to pay off debt held elsewhere, or cause them to go into a costly overdraft. 5) Brilliant deals to new customers - but only if you close your old account A new switching service has led to a flurry of deals for new current account customers. The catch: they must close their old account using the "switch guarantee" in order to qualify for the deals. Switching has fallen despite the introduction of the £750 million service that promises to transfer your bank account in seven days. Banking specialist David Black from Consumer Intelligence said: "If you're thinking of switching your current account, many of the switching offers are only available to those who use the current account switch service." If you don't want to close your existing current account you would have to do a DIY switch, in which case you might not be eligible for some of the benefits. For example, Halifax offers £100 to new current account customers - but only if they close an old account, haven't switched to Halifax since 2012, and aren't customers at the Bank of Scotland. Its terms and conditions warn: "If you do not meet the conditions of the offer we may claim back the £100." 6) Losing interest on your current account balance Customers who remain in credit escape overdraft charges - but are missing out on earning an interest on their cash. Money needn't be locked into a savings account to earn interest. Switch to a higher-paying interest account - here we explain how to earn a 3pc income from your current account. 7) The interest-free overdraft you never got - because it's "unarranged" Current accounts offering "free" overdrafts - worth hundreds of pounds - can be misleading as they must be pre-arranged. Students are notoriously flogged interest-free deals but the terms and conditions often state they must be agreed with the bank beforehand. Otherwise, the overdraft is considered "unarranged" and a deficit of as little as £10 can lead to hefty charges. Mr Daley said: "There are now just a handful of outliers left charging too much to those who can least afford it. The most surprising of these is the Co-op, which charges £20 for busting your limit, followed by a further £20 each time a payment comes out and you borrow more. The worst offenders are Yorkshire Building Society, which charges up to £225 for a 21-day overdraft, alongside The Co-operartive and Santander which charge their customers £150 for the same period, according to research by Fairerfinance.co.uk. Even the 'cheapest' overdraft charge from Barclays is £35 for a 21-day overdraft and £8 if a payment is refused due to insufficient funds. 8) Up to £300 in cash if the bank is closed Need more than £300 for a cash buy? You'll need to visit the bank branch with several forms of identification or plan a few days in advance by taking a sum out of the cash point each day. The withdrawal cap is suposed to prevent thieves from withdrawing your entire bank balance if they guess your Pin correctly. However, even with this limit in place banks can blame customers cash withdrawals on stolen cards - Telegraph Money recently heard a case when Santander refused to pay back £300 stolen from a fraud victim, saying they were liable for the stolen sum. 9) Paying 30pc interest on £1,001 - even if you've paid off £1,000 If credit card customers don't pay their balance off in full, they are charged interest on the entire amount, not just the unpaid sum. For example, paying £1,000 on a £1,001 bill would cost interest on the entire bill and not just £1. Mr Black said: "If you're credit rating isn't great then it's likely to have a higher than average interest rate. In such instances, ideally you should only use the card sparingly and only to the extent that you can pay off the entire balance every month. 10) Fees on packaged accounts that don't pay off Packaged accounts can cost between £2-£15 a month, and customers have to be savvy about making sure their added benefits are worth the fee. Find out how to get perks worth £50 a month from packaged current accounts in our guide - the page is updated regularly so keep it bookmarked. Mr Black said: "If you want a packaged account make sure that the incentives offered are worthwhile and suitable for you. Many of the more attractive accounts require that you pay in at least a specified amount each month - typically between £500 and £1,500 - and some of them require that you set up at least two direct debits. How to get perks from your current account... Sign up for our weekly newsletter