Landing your first job after graduation is a huge accomplishment, and with it comes new financial responsibilities. Establishing good credit is crucial for your future, and a credit card is a powerful tool to achieve that. This guide will help you navigate the world of credit cards and find the best option to suit your needs as a recent college graduate. Choosing the right card can set you on the path to financial success, while the wrong card can lead to debt and a damaged credit score.
Best Credit Cards for Recent College Graduates: A Comparison
| Card Name | Key Features | Why It's Great for Recent Grads |
|---|---|---|
| Discover it® Student Cash Back | 5% cash back on rotating categories each quarter (up to quarterly maximum), 1% cash back on all other purchases; Discover will automatically match ALL the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. | Excellent for building credit and earning rewards. The cash back match in the first year is a substantial bonus. Often easier to get approved for than other rewards cards. |
| Capital One Quicksilver Student Cash Rewards Credit Card | Unlimited 1.5% cash back on every purchase, every day. | Simple, flat-rate rewards program makes it easy to understand and manage. Good for building credit. |
| Petal® 2 "Cash Back, No Fees" Visa® Credit Card | 1% cash back on eligible purchases right away, and after 6 on-time monthly payments, that rate increases to 1.25% - 1.5% cash back. No annual fee, late fee or foreign transaction fees. | Designed for those with limited or no credit history. Uses alternative data (like bank account information) to assess creditworthiness. No fees make it a safe option for beginners. |
| Journey Student Rewards from Capital One | 1% cash back on all purchases; 1.25% total cash back on all purchases when you pay on time each month. | Encourages responsible credit card usage with the bonus for on-time payments. Good for building credit. |
| Deserve® EDU Mastercard for Students | 1% cash back on all purchases. | Designed for students, including international students. Offers benefits like cell phone protection and roadside assistance. |
| Chase Freedom Rise℠ | 1.5% cash back on all purchases. Increase your chances of approval by having a Chase checking account with at least $250. | Great for those with limited credit history, especially if you already bank with Chase. Simple rewards structure. |
| Bank of America® Customized Cash Rewards Credit Card for Students | 3% cash back in a category of your choice (online shopping, dining, travel, drug stores, or home improvement/furnishings), 2% cash back at grocery stores and wholesale clubs, and 1% cash back on all other purchases (on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then 1%). | Offers flexibility in choosing a rewards category that aligns with your spending habits. |
| Capital One Platinum Credit Card | No rewards program, but focuses on building credit. | A good option if you've had trouble getting approved for other cards. Focuses on responsible credit usage. |
| OpenSky® Secured Visa® Credit Card | Requires a security deposit, but reports to all three major credit bureaus. | A good option for those with very poor credit or no credit history. Helps rebuild credit with responsible usage. |
Detailed Explanations of Key Features
Discover it® Student Cash Back: This card offers a rotating 5% cash back category each quarter, requiring activation. These categories often align with student spending habits, such as gas, restaurants, or online shopping. All other purchases earn 1% cash back. The standout feature is the cash back match at the end of your first year, effectively doubling your rewards. This card is often easier to get approved for than other rewards cards, making it a great starting point for building credit.
Capital One Quicksilver Student Cash Rewards Credit Card: This card offers a straightforward, unlimited 1.5% cash back on every purchase. This simplicity makes it easy to understand and manage your rewards. There's no need to track rotating categories or minimum spending requirements. It's a solid choice for those who prefer a consistent rewards rate.
Petal® 2 "Cash Back, No Fees" Visa® Credit Card: The Petal® 2 card stands out because it doesn't charge annual fees, late fees, or foreign transaction fees. It earns 1% cash back on eligible purchases initially, increasing to 1.25% - 1.5% after 6 on-time monthly payments. It's designed for individuals with limited or no credit history and uses alternative data, like bank account information, to assess creditworthiness, making it more accessible to recent graduates.
Journey Student Rewards from Capital One: This card earns 1% cash back on all purchases, with an additional 0.25% bonus (totaling 1.25%) for paying your bill on time each month. This incentivizes responsible credit card usage and helps build a positive credit history.
Deserve® EDU Mastercard for Students: Designed specifically for students, including international students, this card offers 1% cash back on all purchases. It also provides benefits like cell phone protection and roadside assistance, adding extra value for students.
Chase Freedom Rise℠: This card offers a straightforward 1.5% cash back on all purchases. A notable feature is the increased approval odds for applicants who have a Chase checking account with a balance of at least $250. This makes it a particularly attractive option for individuals already banking with Chase and looking to build credit.
Bank of America® Customized Cash Rewards Credit Card for Students: This card allows you to choose a 3% cash back category from options like online shopping, dining, travel, drug stores, or home improvement/furnishings. You'll also earn 2% cash back at grocery stores and wholesale clubs, and 1% on all other purchases. The 3% and 2% categories apply to the first $2,500 in combined purchases each quarter, after which you'll earn 1%. This card is ideal for tailoring your rewards to your specific spending habits.
Capital One Platinum Credit Card: This card doesn't offer a rewards program. Its primary focus is on helping you build credit. It's a good option if you've had difficulty getting approved for other credit cards, as it's often easier to qualify for. Responsible usage, such as paying your bills on time and keeping your credit utilization low, is key to improving your credit score with this card.
OpenSky® Secured Visa® Credit Card: This is a secured credit card, meaning you'll need to provide a security deposit to open the account. The deposit typically serves as your credit limit. The OpenSky® Secured Visa® reports your payment activity to all three major credit bureaus, which is essential for building or rebuilding credit. It's a good option for those with very poor credit or no credit history.
Frequently Asked Questions
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What credit score do I need to get a credit card as a recent graduate?
- Many student credit cards are designed for those with limited or no credit history, so a score isn't always required. However, a fair to good credit score (630-689) can increase your approval chances for rewards cards.
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How can I build credit with a credit card?
- Make on-time payments, keep your credit utilization low (below 30%), and avoid maxing out your card. These practices demonstrate responsible credit management and help improve your credit score.
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What is a secured credit card?
- A secured credit card requires a security deposit, which typically serves as your credit limit. It's designed for those with poor or no credit and helps rebuild credit with responsible usage.
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What is APR?
- APR stands for Annual Percentage Rate and represents the interest rate you'll be charged on any balance you carry from month to month. Look for cards with lower APRs, especially if you anticipate carrying a balance.
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What is credit utilization?
- Credit utilization is the amount of credit you're using compared to your total available credit. Experts recommend keeping it below 30% to avoid negatively impacting your credit score.
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Should I get a rewards credit card or a card focused on building credit?
- If you have limited credit history, focus on cards designed for building credit, like the Capital One Platinum or a secured card. Once you've established a good credit score, you can explore rewards cards.
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What should I do if I'm denied a credit card?
- Ask the issuer for the reason for the denial. You can then work to address those issues, such as improving your credit score or reducing your debt. Consider applying for a secured card or a student card designed for those with limited credit.
Conclusion
Choosing the right credit card as a recent college graduate is a critical step towards building a strong financial future. Carefully consider your spending habits, credit history, and financial goals to select a card that aligns with your needs and helps you establish good credit habits. Remember to use your credit card responsibly by making on-time payments and keeping your credit utilization low to maximize its benefits and avoid debt.