Ever wonder how the banking sector got into trouble? I’ve been sent through a flyer for a student credit card, and with it an idea of how it all went wrong.

Consider. If someone ran a business plan by you which said they’d actively seek out young people with part-time jobs and thousands of pounds of debt hanging over them, in order to dish out credit cards like sweets, what would you say?

I’ve got to admit, it wouldn’t make my Top 10 Best Ever Ideas list. It would probably come somewhere between the inflatable dartboard and the chocolate teapot.

Happily for students everywhere many High Street banks, electing not to listen to the siren call of common sense, disagree. Many students will find themselves offered shiny credit cards with their shiny new student current accounts. The limit is typically £500 which seems tame, but with rates higher than Lady Gaga’s heels – nudging 20%APR – you’d be mad to want one…and to offer them in the first place.

Here lies the rub: the way most people think is not necessarily the way bank policy is decided. Most people wouldn’t give students credit (which is why the Government has to bankroll student loans) because their earning power is rarely enough to support the level of credit being advanced. This isn’t a swipe at ‘posh students’ racking up the lattes on plastic: the ‘sensible’ student using a credit card as a last resort is just as risky because there’s a good chance that the student wouldn’t be able to keep up repayments. Most people would say that giving money to people who have little guaranteed way of paying it back is a bad idea likely to leave everyone concerned out of pocket.

Banks however don’t seem to see it like that.  In fact, the very qualities that would make any sane lender run a mile from me – being young, impressionable and skint – are what make banks want to give me more of their cash. They are first and foremost businesses whose job is to make money. Charging interest at 18 or 19%APR is a good earner. If you have an outstanding balance of, say, £150 on a student credit card you’ll be paying £27 interest next month on that debt. Make a minimum payment of 5% of your debt and the month after that your original £150 utility bill has turned into £198.42. The bank has made a nice little profit from you in 3 months and you are poorer than you were before – which must have been pretty poor to have paid your water bill with a credit card in the first place.

There’s another twist to this, however, which really annoys me. I get that a bank is a business not a charity and will make decisions to lend or not based on the bottom line. What makes my blood boil is that the student with a credit card is likely, post graduation, to get even more credit purely because ‘they’ve got a credit history’, irrespective of the student loan they owe. I however, after battling to make sure that I’m not in my overdraft and owe as little loan as possible, will not be able to get so much as a £2 advance on a bus fare because I have no credit history. I will be fobbed off with a Mr Collins of a contract should I secure any kind of credit, while my borrowing colleague gets to waltz off with a credit Darcy: all large limits and lower interest rates (by comparison).

Truth is sometimes stranger than fiction, certainly in this case. It seems that fiscal responsibility still does not pay. I am not naive enough to claim that all credit is bad – if you can pay your balances, it’s fine and fair enough. But really, student credit cards? Almost as good as self-certified mortgages. Where do I sign?