The credit crunch has caused many account providers to downgrade their offers to new student customers.
Student bank accounts have been negatively affected by the credit crunch, the Observer reports.
Many providers have been cutting back on the "freebies" which are offered with such accounts in order to boost new customer numbers. Halifax, for example, has downgraded to only offering 25 per cent off AA membership - although it has also increased its interest-free overdraft limit to £3,000 for five years' study.
Banks have traditionally used the start of the university year in September and October to attempt to lure first year students in to taking out an account with them. This is because, with rates of account switching to other providers remaining low, they stand to benefit financially from when the student graduates and his or her income rises.
Freebies hit a peak last year, which saw iPods even being offered on one account. In 2008 however, with the credit crunch ongoing, deals have been scaled back to include two years' travel insurance free (HSBC), free cinema tickets (Barclays) and a free five-year railcard (NatWest).
It is estimated that, across the world, financial institutions have written off over £150 billion in assets due to the crunch. These assets are often complex financial instruments whose value is linked to the property market - and have therefore been negatively affected by the falls in house prices which have been experienced in most developed nations.
