Best credit cards for graduates

If you’ve recently graduated and you want to apply for a credit card, find out 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 you 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 up your credit score. But it’s also important to understand how credit cards work and make sure 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 will be dependent 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 compared to someone with no income and high outgoings.

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 to better manage your finances, 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 were unable to pay off your balance in full each month as well as the fees you might be charged. Bear in mind that 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 have a negative impact on 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 you were 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 up 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 who has no credit history at all. That’s because lenders will be able to see that 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 one of the following:

  • A purchase credit card that charges low or no interest for a set period of time, 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 you have little to no credit history, getting accepted for one 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?

This will depend 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.

Aqua Classic Credit Card

Aqua Classic Credit Card

★★★★★

Check eligibility Read review

32.9%

Representative APR

£0

Account fee

Up to 48 days

Interest-free each billing period

£250

Minimum credit limit

Like other cards in Aqua’s range, the Classic card is designed for those with a limited credit history, and comes with features tailored to protect and build your credit score. Generally they're also easier to get approved for than regular cards.
  • Suitable for applicants with no credit history
  • No annual fee
  • Although the rate is good by credit builder standards, it's not a card you'd want to carry a balance on
Availability Available to new customers
Residency UK resident
Foreign usage charge (EU) 2.95%
Cash advance fee 5% (min. £4)
Representative example: Assumed credit limit £1,200, representative 32.9% APR (variable), purchase rate 32.94% p.a. (variable). Please note: you can’t have two Aqua accounts or open an Aqua account within 12 months of opening a Marbles, Fluid or Opus account, issued by New Day

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 of 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 be able 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 make your repayments on time, your credit score should start to 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 will 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 for 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.

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