Best credit cards for graduates

While there's no such thing as a "graduate credit card", if you’ve recently graduated you may want to get started building a positive credit record with a new credit card. Here's how to go about it and what to watch out for.

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If you’ve completed your studies at university, you’ll no doubt have a lot of debt to repay and might be looking for a job to help you do so. You might also be looking for a credit card to help you cover the costs of certain expenses.

Used in the right way, a credit card can be hugely beneficial and can help you build your credit score. But it’s also important to understand how credit cards work so you don’t end up racking up a lot of debt you can’t afford to pay back.

Can you get a credit card after graduating?

Yes, it’s certainly possible to get a credit card once you’ve graduated. However, this depends on your personal and financial circumstances.

If you have a regular income – for example, if you have a job – and your outgoings are not particularly high, you will likely find it easier to get accepted for a credit card than someone with no income and high outgoings.

Pros and cons

Pros

  • Improve your credit score when used responsibly.
  • Different options, including 0% cards and rewards cards.
  • Spread costs, transfer existing debt, or earn rewards.

Cons

  • Late payment fees.
  • Late payments can have a negative impact on your credit score.
  • Hard to get a card with a low credit score and a large amount of existing debt (student loan).

What to consider before applying for a credit card

Before applying for a credit card, it’s important to consider how much you can realistically afford to spend on your card and how well you can manage your repayments.

Although credit cards can be useful tools for helping you manage your finances better, you can easily get caught out if you’re not careful. Interest charges can be high if you don’t pay off your balance in full each month, and it can be easy to build up a lot of debt if you can’t afford to keep up with your repayments.

It’s also best not to use a credit card to withdraw cash from an ATM unless it’s an emergency. If you do, you will be charged a fee of around 3%, and interest will also be charged from the moment you get your money, even if you pay off your balance in full that month.

When comparing your options, always consider how much interest you would have to pay if you can’t pay off your balance in full each month as well as the fees you might be charged. If you miss any repayments, you’ll be charged a late payment fee of around £12, and the missed payments will be noted on your credit file. This can negatively impact your credit score and affect your ability to get accepted for credit again in the future.

What types of credit cards can a graduate get?

There are several different types of credit cards to consider when you’ve graduated. If you had a student credit card while studying, you might be able to hold onto it, but you could benefit from a better deal if you apply for a brand-new card.

The advantage of having used a student credit card is that you will have started to build a credit history. Provided you used your card responsibly – in other words, you kept within your credit limit and made your repayments on time – you will be in a better position to borrow than someone with no credit history at all. That’s because lenders can see you’re a reliable borrower and may be more willing to let you borrow again.

If that’s the case, you might be able to take advantage of 1 of the following:

  • A purchase credit card that charges low or no interest for a set period, helping you to spread the cost of your spending.
  • A balance transfer credit card that allows you to move existing credit card debt across and pay a lower interest rate (or no interest) for a set number of months. You will usually have to pay a balance transfer fee of around 2% to 3%.
  • A rewards credit card, which could offer loyalty points in certain stores, cashback or air miles.
  • A travel credit card that won’t charge you a transaction fee when you spend abroad.

On the other hand, if you didn’t use a student credit card at university and have little to no credit history, getting accepted for 1 of the above cards is likely to be trickier.

If that’s the case, it could be worth applying for a credit-builder credit card, which is designed to help you improve your credit score over time. These cards typically have low credit limits and high interest rates, so it’s important to pay off your balance in full each month. As your credit score improves, you may be able to apply for a more competitive credit card.

What is the best credit card for graduates?

The best card depends on your individual circumstances and what you wish to use the card for. If you have very little credit history or a poor credit score, a credit-builder credit card, such as Aqua’s Classic Card, could be the right choice. Before applying, we highly recommend using our eligibility checker tool to see what other cards you could get accepted for.

But if your credit score is good and you want to spread the cost of your spending, a purchase credit card is worth considering. Alternatively, if you want to transfer existing card debt, consider a balance transfer card, while if you want to earn something back as you spend, look at rewards credit cards.

What are the challenges of getting a credit card as a recent graduate?

The main challenges for recent graduates looking for a credit card are that they often don’t have much of a credit history, their income can be low and they often have a large amount of debt to repay in the form of a student loan.

All these factors can make lenders more reluctant to let you borrow. Lenders won’t know how well you can handle credit, and they may also be concerned about your ability to afford your repayments. If you are accepted for a credit card, you may find you’re offered a lower credit limit and a higher interest rate. However, if you borrow responsibly and repay on time, your credit score should improve, giving you access to more competitive deals.

Other credit options available

If you had a student bank account while you were studying, most banks let you switch to a graduate account once you’ve graduated. Some graduate accounts come with an interest-free overdraft designed to help you pay off some of your student debt – but not your student loan. Interest-free overdrafts can last up to 3 years, but your overdraft limit may decrease each year. It’s important to try and pay off your overdraft before the interest-free period ends.

Bottom line

Some credit options, such as a purchase or balance transfer credit card, might be tricky to obtain if you’re leaving university with a low credit score and large student loan debt. However, alternatives such as a credit-builder credit card or graduate bank account may be more suitable to your situation. Note that whilst a credit card can help you build up your credit score when used responsibly, incorrect usage can do more harm than good.

Frequently asked questions

Who is most likely to be researching graduate credit cards?

Finder data suggests that men aged 18-24 are most likely to be researching this topic.

ResponseMale (%)Female (%)
45-545.91%
35-445.91%8.44%
25-3416.88%14.35%
18-2427.00%21.52%
Source: Finder sample of 237 visitors using demographics data from Google Analytics
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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Written by

Rachel Wait

Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full profile

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