13 September 2006
With many students about to embark on their university or college courses, Halifax has warned of being lured into current accounts by the gimmicks and freebies they offer.
According to research by the high street bank, making the wrong choice could cost in excess of £630. Despite many banks offering free gifts to students who sign up to their services, Halifax has warned this may be a false economy.
Rather than looking at gifts such as iPod Shuffles or mp4 players it is more important to study the interest-free overdraft offered alongside them.
Halifax points out that of the current student bank accounts on offer, HSBC, Lloyds TSB and NatWest all offer free gifts. But while the free gifts are worth around a maximum of £100, the actual cost of lending is much higher due to lower interest-free overdraft limits.
Peter Jackson, HBOS spokesman, said: "The best advice is always to avoid getting in debt in the first place but for most students that's just not possible.
"So the next best advice is to borrow money as cheaply as possible and that's why it's important not to be taken in by the lure of free gifts and to concentrate instead on the interest free overdraft limits which are on offer."
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