Student Loans and Applying for Credit Cards

Student Loans and Applying for Credit Cards
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Hi! I am looking for some… advice, perhaps, on what I should do about the fact that my “student loans outweigh my income.” I’m currently on my father’s credit card account, so I’ve been building credit, but upon trying to open a credit card with my bank they said I could not. (Luckily, they didn’t deny me, simply filed the application as incomplete, so my credit score is still good.) However, I don’t understand their reasoning. The woman on the phone said to me, “your student loans are greater than your income.”

To be clear, I am not currently paying off those loans, however, I do pay off the interest on the unsubsidized ones, so it doesn’t compound.

My income is less than my whole loan amount because I’m a student, but regardless, I’m not really sure what metric they’re using… calculated loan payments for after I graduate? monthly income? Yearly?

I want to apply for a credit card, and I don’t want this to stand in my way again. Any help would be appreciated.

P.S. It’s been suggested to me that I get a “student” credit card, but my credit score exceeds the range for those (at least, the ones on this site).

Student Loans: Ask Us Anything

Hi, and welcome to the NerdWallet community! :wave:

This is a tough situation. A Debt to income ratio (DTI) of 40% or more is generally considered to be a sign of financial stress. A DTI of 20% or less is considered low. It’s a good idea to aim for a DTI below 30%.

Because a high DTI suggests someone living on the edge, or close to it, credit card issuers won’t be eager to extend you new credit.

Your current DTI might also make it difficult to be approved for a student card at this point. One option may be starting out with a secured card which you can read more about here.

Would you mind sharing what your goal is in obtaining a credit card now? Are you primarily looking to build credit?


Hi clare,

I second what Cori said – it’s unlikely that you will qualify for a credit card right now unless your income changes. It’s great that you are already working on your credit score!

I’d also recommend starting with the secured card, and the issuer you get it with may let you automatically graduate to a regular credit card after a certain period of time. We recommend setting up a small, recurring payment (like a Netflix subscription) on the secured card and using automatic payments. That way, you won’t use up much of your credit limit and you will build a credit history.

Hope that helps!


Yes, I am looking to build credit, but I also would appeciate the various perks of good cards. On Nerdwallet, I keep getting really top-tier cards suggested to me, because my credit score is good from using my dad’s card.


Just to be clear, my student loans are not currently being paid off. I’m only in my second year of college.
When calculating the DTI, should I divide the entire sum of the loans (let’s say, $9,000 all together) by my monthly income, (let’s say, $3,000 a month)? That just seems absurd. The ratio would be 300%. I would have to earn $45,000 a month to get that 20% DTI. That’s over half a million dollars a year, aka, not a student’s income.

Please tell me this isn’t how DTI is calculated.

UPDATE: I used the DTI calculator from Nerdwallet. I think I understand why my DTI is so high. Though the loans shouldn’t be a factor, since there’s no monthly payment, I believe the issue here is my father’s credit card. Though I make fewer than $50 in purchases, my father’s purchases bring the payments to almost $1000 a month, as this is his primary credit card for day to day purchases.

This is a double edged sword, as this card is “my” oldest account, and is always paid off on time, meaning it’s the main reason my credit score is so high, as I mentioned earlier.
This means taking my name off the account would be “closing my oldest account”, which would be detrimental, and then I would have nothing to build credit at all.

I don’t see a good solution here.


Glad you used the DTI calc to figure out why it was so high! You’re right that you shouldn’t close your oldest account.

Assuming you are under 21, you cannot get a credit card on your own unless you can show that you have independent income and it is enough to repay the debt. If your income is $3,000 a month and your score is already high, it’s possible you may qualify for some cards, but not the ones you want. You could try a local credit union, maybe one that’s tied to your university.

You’re not going to love this suggestion, but I’d say since you’re already on the right track with all your credit habits, be patient until you can get your hands on one of those rewards cards! Credit building takes time and you’re already way ahead.

And if you reeeallly want a card of your own, try that secured card option.

I’m also hoping one of my credit card expert colleagues weighs in :slight_smile: