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Student debt beyond the student loan

Interest-free overdrafts, credit cards taken out at 18, and rent arrears — the common student debt traps.

Debts for Students3 min readReviewed July 2026

Most student bank accounts include large interest-free overdrafts. Used properly, they're a genuine buffer. Used as monthly income, they leave you in the red at graduation, when the interest-free period usually ends.

Credit cards taken out at university often carry small limits but high APRs. If you're falling behind, the same options apply as any other card: request an interest freeze, propose a payment plan, or include the debt in a Debt Management Plan.

Rent arrears are a priority even for students. Contact the university's welfare team early — most universities have hardship funds and can intervene with private landlords.

Guidance, not personalised helpThis article is written to inform. It isn't personalised debt or legal advice — a Debt Compass adviser will discuss your options and eligibility with you before you choose a route.