sam and tony get paid

Banks woo students with pizza vouchers, record tokens and, increasingly , hard cash. Matthew Sweet reports

Sam has opened a student account with the Midland Bank. She's 18, she likes skateboarding and she has a PVC hat. She also has Tony, her boyfriend in Leeds, whom she may or may not call with the BT charge card that she got when she filled out the forms. The bank has also slipped her pounds 40, and drawn our attention to Alex, saucy dreamboat of Loughborough University, with whom her interests (converse trainers) dovetail to perfection.

Midland's advertising campaign on billboards and in the pages of teen reads such as NME and More! dramatises the central dilemma of Sam's life: should she dutifully phone her boyfriend and watch the interest accrue on her cash, or blow it on trainers and sleep around? Whatever happened to that nice Griffin with the voice of Richard Briers?

If Sam had read Midland's own student banking booklet, she would have been exhorted to "ignore the freebies" and meditate upon hard facts. This sober brochure offers a stern warning against banks such as, well, the Midland, which is pushing one of this year's more generous offers: "Most banks offer gifts to encourage you to open an account. But don't think too much about these - they are usually not worth much in the long run." Fortunately, Sam doesn't exist, and so won't have to unravel this Mobius strip of financial advice.

Nicola Isherwood, one of the team that launched the Midland's campaign, explains the construction of its teen love triangle: "It was just to create that extra level of incentive; young people get bored easily, and this is a way of communicating in a way that they'll relate to.

''Of course," she cautions, reflecting on the notorious difficulty of striking a convincing tone with such a group "the proof of the pudding is in the response". And although many students may spend their "reading weeks" in the Union bar, trying to remember the names of the Wombles and acquiring a taste for Guinness, they also tend to be smartly ad-literate.

"These people deserve a good smack, don't they?" volunteers Rob, 20, poised to read Maths at Liverpool, now reading about Sam, Tony and Alex. "What this ad says to me is that students are a bunch of airhead consumers. I don't know anyone like this: maybe they're a bank manager's kids." Annabelle, 18, off to Oxford to read History, is similarly unimpressed: "It's patronising, really. These boyfriends and skateboarding: it's an adult attempt to grab at student culture, missing it and falling on its face." It doesn't take a semiotics degree to detect that marketing images of students are a lot more ditzy than their target constituency of consumers.

NatWest's leaflets, branded with a plastic megaphone in Trainspotting orange, are a source of puzzlement to Rob: "It looks like that thing on the Boo Radleys album - it can't be a reference to that, can it?" NatWest dangles a cash carrot of pounds 35 and a pounds 1,000 overdraft. But Rob's generally positive response to their advertising may soon be reversed: the bank will be sending crack squads of jugglers and stilt walkers to 50 freshers' fairs countrywide, who will attempt to entice potential account holders with popcorn and candy floss.

For the past six years, banks have wooed students with gifts such as cinema tickets and pizza vouchers, but nobody, as Annabelle notes, has tried to win favours with a book token. Today's bias is firmly towards the one commodity that all students crave - cash. (Although the Halifax trails charmingly behind the times with a free CD compilation.) Lloyds tries to seduce with a Young Person's Railcard and a pounds 20 Our Price token, the TSB tempts with pounds 30 of record vouchers, and NatWest and Barclays plump brazenly for a straight cash bribe of between pounds 35 and pounds 50. The Co-operative is one of the few British banks not to have entered the freebie fray. As its spokesman Dave Smith argues: "If you're the sort of person who chooses a bank because it doesn't invest in oppressive regimes, then you're not likely to be attracted by a cheap and nasty incentive. To give away free pizza wouldn't really fit in with our ethical policy." Barclays bank - once boycotted by many students because of its South African connections - now leads the market in providing financial services for those at university. "The most important incentive will always be cash, rather than more abstract things such as railcards," asserts their spokesman, Richard Harvey. With grants dwindling yearly, students require increasingly virtuoso skills of debt-management. Or, as Harvey prefers, they're exhilarated by the joys of the free market: "It's more attractive because you can take the cash and spend it on what you want rather than have that choice made for you by an institution". By next year, record tokens and railcards may have gone the way of the free Biro and plastic personal organiser.

But for most students, the blizzard of tickets, tokens and pounds 10 notes is slight distraction from the $64,000 question of which bank is going to prove the most indulgent creditor, both during and after university. Rob comes straight to the point: "I just chose mine by the size of the overdraft facility. It's a simple as that". Richard Harvey is keenly aware of this. Barclays' publicity focuses on that magic overdraft limit, pounds 1,500. (Only pounds 500 short of the Co-operative's estimation of last year's average student debt.)

And the competition to carry this debt - through and beyond college - is becoming increasingly intense. Those in charge of enticing students into affordable debt are confident in the soundness of their long-term investment. Celia Rowland, of the Halifax, argues that students are "more likely to be the savers and the home-owners of the future" and Heather Coleman, of Lloyds, goes one better, declaring graduates to be "the people of the future".

This rivalry got a little hotter in July as Lloyds began a campaign to publicise the benefits of their graduate service. A relatively recent financial phenomenon, such schemes extend the easy terms of student banking to, as the brochure puts it "help ease you gently into working life". Armed with a free pounds 700 overdraft and the possibility of a pounds 5,000 loan, Lloyds can poach graduates with better prospects from banks offering less preferential terms to those who have emerged, blinking and penniless, from the university library. Peter Macnamara, of Lloyds, concedes that many of these new recruits will be arriving at the bank a couple of thousand in the red. "We've tried to move away from freebies and we'd hope to recruit the kind of student who'd given these things some thought from the beginning." Students who spent their time at college eating mushroom vol-au-vents at accountancy presentations and writing earnest letters to Coopers & Lybrand can be welcomed with open arms; those who plan to spend the next couple of years slumped on the sofa half-watching Crosswits can be given polite refusal. This year's crop of new undergraduates have a couple of years to discover the category into which they fit.

In the meantime, members of the class of 1996 are eager to make the most of cut-throat competition for their fledgling overdrafts. Ania, 19, is about to read Italian at Leeds University. She already has an account with the Abbey National, but found their staff somewhat clueless: "The woman in my branch didn't know there was a student account and had to go round the back to look in an enormous book." Seems like they've lost a customer.

"Lloyds and Barclays are the most attractive because of the free cash - that's what's important". Ania is typical of the present generation of students who, resigned to the imminent death of the grant, are investigating alternative strategies to make money go further. She's intending to put her student loan into a high-interest account, and is examining the logistics of opening multiple accounts.

Stuart, 22, reading architecture at Oxford, is one of the many British students already managing two overdrafts, juggling the services of two banks to give himself the option of going pounds 2,500 into interest-free debt. "I just tried it to see if I could get away with it, and I really needed the money at the time," he says. Richard Harvey is sceptical about the widespread nature of this practice: "I think it's something that people say they do a lot more than they actually do," he contends, sounding a little like Tony asserting his confidence in Sam's fidelity.

However, Stuart has just applied for an overdraft extension. "I went in and asked quite tentatively for a small amount of extra credit but they gave me pounds 1,500 just like that".

Stuart is part of a financial love-triangle that's much more cognisant of the pressures of living in the real world. And when he graduates, he's quite likely to find that there are several banks scrambling for the pleasure of taking on his debt and allowing him to pay it off on easy terms. "I've no complaints," he breezes. They should put him in the adverts.