IFSRA remains concerned about student debt and money management, writes John Downes

Even the most cursory glance at the offers available to students as they return to college here show how anxious the major banks are to attract new student business.

Ranging from customised "curved corner" credit cards (AIB), to free flights to a choice of destinations (Bank of Ireland), the logic behind such ploys is not difficult to understand.

According to Mr Ben Archibald, president of the Union of Students of Ireland (USI), banks are only too aware that if they manage to sign up students early on, they are likely stay with them for life.

USI's advice to students is simple enough, however. While they should not be afraid of taking advantage of what a bank has to offer, they also need to be very clear about what exactly it is they are signing up to.

"Take them for all they are worth. But don't be prepared to take a particular financial service unless you need it," he says.

"Think of the type of services you needand avoid the temptation of taking a credit card with a very high limit."

Recent negative publicity surrounding the banking industry means many financial institutions are making conscious efforts to improve their image with students, he says.

This has led to different strategies from banks, ranging from increasing the generosity of the incentives offered to cash-strapped students to the opposite approach.

Indeed, this year, one bank's gimmick is simply not to have one.

By refusing to follow "the patronising trend of offering students gimmicks and trinkets, like music tokens and flight vouchers, as part of its financial package", Ms Claire Caulfield of Ulster Bank says, it has focused on providing a simple and competitive financial package especially designed for students.

This something which USI, for its part, says is a welcome development.

But USI also stresses the need for banks to include more information on how students can best manage their money.

Indeed, the issue of student debt is another major concern for USI.

In particular, the increasing prevalence of special student credit cards with low rates of interest can lull students into a false sense of security.

When coupled with the cost of living away from home, this means students are getting into more and more debt with credit cards, says Mr Archibald.

"We know the level of debt being accumulated by students is generating massive amounts of credit. But it is not credit at all, but debt," says Mr Archibald. "If you don't have money in your account, you shouldn't use your credit card. Don't treat it as a credit card, but as your own cash."

With this in mind, the Irish Financial Services Regulatory Authority recently launched a leaflet - to be distributed with freshers packs this month - entitled "Money Tips for Students".

Providing independent advice on banking, including an explanation of the types of current account facilities available to students, the leaflet also offer tips on how students can best manage their money.

According to the IFSRA's consumer director, Ms Mary O'Dea, it is only too aware of the methods used by banks to win student customers.

As a result, it is important for students to exercise caution when signing up for their products.

"Students often purchase financial products for the first time in college and the start of your college years is a fitting time to adopt good financial planning habits. Managing money can always be challenging, particularly when a student's income can fluctuate throughout the college year," she says.

"Many financial institutions offer incentives to students that can make a particular institution or product seem more attractive in the short term. It is very important to understand different types of financial products and know the questions to ask to find out the costs and charges in the long term."

This is something with which Mr Archibald agrees.

Ultimately, students should consider whether the incentives offered by banks represent good value in the long term.

If necessary, they should also consider switching between banks.

"Gimmicks may be cool," he says. "But the question is, 'is it worth it?'"