Outgrown a Student Credit Card? Here Are 5 Worthy Upgrades for New Grads

If you're graduating with some good credit, you might want to consider a plastic upgrade.

[Disclosure: Cards from our partners are mentioned below.]

Thanks to student credit cards, secured credit cards and a little something called “the authorized user,” plenty of college seniors will be graduating with some credit. And, if you’re one of them (you can check via your free credit report summary on Credit.com) you might want to consider a plastic upgrade.

Starter credit cards are great for building credit, but they don’t usually tout the best terms and even if there’s a $0 annual fee or base rewards program, that plastic likely carries a low credit limit — which might not help in case of an emergency or if you want to further boost your credit. (Remember, a low limit makes it harder to maintain a solid credit utilization rate — how much debt you’re carrying versus how much credit is available to you. For best scoring results, you’ll want to keep your charges below at least 30% and ideally 10% of your total credit limit.)

If you’ve outgrown your starter credit card, or think you’re about to, here are five credit cards worthy of your consideration.

1. Discover it — 18-Month Balance Transfer

Purchase APR: Variable 11.74% to 23.74%, depending on your credit

Annual Fee:  $0

Why You’ll Want to Consider it: Because the Discover it is a solid rewards credit card with some built-in training wheels. Cardholders get 6-months of 0% financing on purchases and a full 18-months 0% financing on balance transfers (the annual percentage rate after that will be a variable 11.74% to 23.74%, depending on your credit). There’s also no late fee for a first missed payment (which you should still avoid at all costs) and no penalty APR.

Plus, if you use your card right, you’ll earn some serious rewards. The Discover it offers 5% cash back on up to $1,500 in purchases in revolving bonus categories each quarter and 1% cash back everywhere else — plus, Discover will match all the cash back you earn at the end of your first year. And there’s an added bonus for new grads getting ready to move out of their parents’ house: Now through June, you can get 5% cash back on up to $1,500 in purchases at home improvement stores.

2. The Citi Double Cash Card

Purchase APR: Variable 14.24% to 24.24%, depending on your credit

Annual Fee: $0

Why You’ll Want to Consider it: Rewards credit cards can be tricky. Points, miles and cash back are nice, but they can easily entice someone to overspend. Charge more than you can pay off each month and any interest you pay on the balance will wind up eating those rewards — and then some. But here’s the thing about the Citi Double Cash Card: It rewards you for paying the bills. Cardholders earn 1% cash back on purchases, then another 1% back when they pay that purchase off. That means you can earn a full 2% cash back on every dollar you spend, which is pretty tops for a cash back credit card, especially since there’s no annual fee. There’s also a 0% introductory APR for balance transfers for your first 18 months. (You’ll pay a variable 14.24% to 24.24% after that.) (Full Disclosure: Citibank, as well as Discover, Capital One and Barclaycard advertise on Credit.com, but that results in no preferential editorial treatment.)

3. Capital One QuicksilverOne Cash Rewards Credit Card

Purchase APR: Variable 24.99%

Annual Fee: $39

Why You’ll Want to Consider it: Available to people with average credit, the QuicksilverOne is a solid alternative for any new grad who had a credit misstep (or two) while they were in school. Yes, you’ll pay an annual fee ($39) and its 24.99% APR will sting if you wind up carrying a balance (expert intel: avoid carrying a balance), but you’ll earn an unlimited 1.5% cash back on all your purchases. You’ll also have access to a higher credit limit after making your first monthly payments on time and receive a few ancillary benefits that’ll come in handy if you need to purchase some stuff for your first apartment. Those bennies include an extended warranty that doubles the original manufacturer warranty up to a maximum of 12 months on most purchases and price protection that reimburses you the difference in price on eligible items charged to the card if you find a lower price for the same item within 60 days of purchase (see card agreement for full details.)

Plus, if you use the card responsibly, you may be able to upgrade to the QuicksilverOne’s no-annual-fee big brother: the Capital One Quicksilver Cash Rewards Credit Card — which we’ve got a full review of right here.

4. Barclaycard Ring Card

Purchase APR: Variable 13.74%

Annual Fee: $0

Why You’ll Want to Consider it: If you’re worried about overspending for rewards, are looking for an in-case-of-emergency card or you need to make a big purchase soon that you might not be able to pay off right away, the no-frills, low-cost Barclaycard Ring Card will probably fit right into your wallet. There’s no annual fee, no foreign transaction fees and no balance transfer fee. Plus, the card comes with a 15-month 0% introductory APR on purchases and balance transfers made within 45 days of account opening — after which, you’ll pay a reasonable variable 13.74%. So, if you need to pick up a few necessities for your first apartment, this is the kind of card you’ll want to put those on. Not to mention the Barclaycard Ring lets cardholders drive: You’ll be invited to share your opinions and vote on product changes in Barclaycard Ring’s online community.

5. Citi Costco Anywhere Visa

Purchase APR: Variable 15.99%

Annual Fee: Technically $0, but you’ll need a Costco membership to apply — and that’ll cost you at least $55

Why You’ll Want to Consider it: Because the card offers big-time rewards on all the stuff you’ll be purchasing once you leave the nest. That includes 4% cash back on eligible gas for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on Costco and Costco.com purchases and 1% cash back everywhere else. Plus, there’s a 7-month 0% introductory purchase APR (after that, your APR will be a variable 15.99%). Of course, only Costco fans should apply: While the rewards are plentiful, they’re issued as an annual credit card reward certificate on February billing statements and are redeemable for cash or merchandise at U.S. Costco stores.

Remember, no matter what credit card you choose, smart spending habits should apply. Sign up for alerts or set your bill to auto-pay so you never miss a payment, keep your balances low (or, ideally, pay them off in full) and avoid signing up for every credit card on the market that catches your eye — too many inquiries can damage your credit standing.

In the meantime, if you’re also looking for some new digs, we’ve got a rundown on the 19 mistakes college grads tend to make when looking for their first apartment that you’ll want to read. 

At publishing time, the Discover it, Citi Double Cash, Capital One Quicksilver One, Barclaycard Ring and Citi Costco Anywhere Visa cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

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These 4 Credit Cards Are the Best for New Graduates

Whether you want cash back rewards or no annual fees, these cards have you covered — if you swipe wisely.

With graduation around the corner, you’re probably looking for ways to build up your credit. After all, it plays a big role in many financial decisions.

You could always start with a secured credit card, which is ideal for those with a thin credit file or no credit. Or you could spring for one of the cards listed here, which were designed for new graduates. Whether you want cash back rewards or no annual fees, these cards have you covered as long as you swipe wisely.

BankAmericard Travel Rewards 

Why We Picked It: Graduates eager to see the world will jump at the chance to earn 1.5 points for every dollar they spend. There are no blackout dates or restrictions, and points don’t expire. There are also no foreign transaction fees.

Other Perks: Swipe at least $1,000 in the first 90 days, and you’ll earn a 20,000-point signup bonus. Bank of America checking or savings customers can get a 10%-point bonus as well.

Annual Fee: None

APR: 0% for the first 12 months, variable 15.74% to 23.74% thereafter

Capital One Journey Student Credit Card

Why We Picked It: Geared toward those with average credit, this card offers access to a higher credit line after you make your first five payments on time. This card has no foreign transaction fees.

Rewards Details: With this card, grads earn 1% cash back on every purchase. If they pay on time, they can boost their rewards to 1.25% for that month.

Annual Fee: None

APR: Variable 20.74%

Citi ThankYou Preferred Card for College Students

Why We Picked It: Great rates of return and a nice signup bonus.

Rewards Details: Grads earn two points per dollar spent on dining and entertainment and one point on other purchases. Spend $500 in the first three months, and you’ll receive a 2,500-point bonus.

Annual Fee: None

APR: 0% for the first seven months, variable 14.74% to 27.24% thereafter

Discover it Chrome Student Card

Why We Picked It: This card offers one of the highest rates of return and throws in some extras.

Rewards Details: Grads earn 2% cash back on up to $1,000 in dining and gas purchases, and an unlimited 1% on everything else. At the end of your first year, Discover will match all the cash back you’ve earned. For those heading to grad school, the issuer offers $20 cash back each year your GPA is 3.0 or higher for up to the next five years.

Annual Fee: None

APR: 0% for the first six months, variable 13.74% to 22.74% thereafter

Before You Apply 

Remember, before you apply for any credit card it’s a good idea to check the terms and conditions to make sure it’s the right fit. Checking your credit is also another wise move, as you’ll want to know if you’re able to qualify. (You can view two of your credit scores for free on Credit.com.) If the APR is too high or you struggle with making payments on time, it may be best to wait until your credit’s improved to apply or open a secured credit card designed for those with average credit.

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Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

At publishing time, the Capital One Journey Student Credit Card and Discover it Chrome Student Card are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

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5 Ways Teens Can Start Building Credit Right Now

Here's how you can start establishing credit even before you're 18.

When it comes to building credit, most people start at a disadvantage. It takes credit to build credit, and with no substantial credit history, it’s difficult to qualify for the very credit cards or loans they need to start building credit. And if you’re under 18, you can’t even legally open a credit card in your own name.

Luckily, there are some credit building methods you can use while you’re still in high school — even before you turn 18. Here are a five ways high school students can start building good credit (plus some tips on how to maintain it). 

1. Get a Job 

OK, so getting a job doesn’t directly help you establish credit, but income is a key factor in qualifying for credit, and your job history, just like your credit history usually gets stronger with time. The more experience you have, the better your chances of getting a better, higher-paying job in the future, so get started early (without hurting your academics, of course).

The CARD Act of 2009 requires students and other young adults to demonstrate their ability to repay debt before they can open a credit card account. Having a job will help you do exactly that and strengthens your qualifications for getting a credit card when you’re old enough.

2. Get Added as an Authorized User 

When you’re under 18, one of your options is to get an adult to add you as an authorized user on one of their credit cards. As an authorized user, you can hold and/or use the adult’s credit card, but you won’t be the primary cardholder. The primary card user’s responsible card use can help boost your credit.

“As an authorized user [you] would be able to piggyback off of the more responsible person’s credit,” says Amber Berry, Certified Financial Education Instructor at Feel Good Finances. “Of course, this requires consent from the sponsoring adult because it is the card owner, not the authorized user who is ultimately responsible for making payments.”

This is only a good idea if you and the cardholder both trust each other to use or pay on the card responsibly. You’ll also want to make sure the card in question reports authorized users to the three major credit bureaus. (Still confused about what it means to be an authorized user? We’ve got a full explainer here.)   

3. Get a Secured Credit Card

If you’re already 18, another option for establishing a credit history from scratch is getting a secured credit card. Secured credit cards require a security deposit that dictates your line of credit — for instance, a security deposit of $300 would get you a $300 credit limit. Even though your card is tied to hard cash, you still use it for purchases and make monthly payments just like a normal credit card.

It’s much easier to qualify for a secured credit card, and responsible use will still help you build credit. Card providers may even raise your credit limit or offer you an unsecured credit card after a period of responsible use. You can find some of our picks for the best secured credit cards here 

4. Get a Student Credit Card 

If you’re heading to college soon, another good starter option is the student credit card. Student credit cards have more lenient qualification requirements, have low or nonexistent annual fees and often offer incentives for responsible behavior.  For instance, the Discover it Chrome student credit card offers cash back for good grades, 2% cash back at gas stations and restaurants on up to $1,000 in purchases per quarter and a cash back match at the end of the first year.  

5. Use Good Credit Card Habits  

When you do land a credit card, long-term responsible use is necessary to build and maintain your good credit. That includes paying your bills on time, carrying a low balance and paying your balance in full.

“Do your best not to carry a balance on the card. If you carry a balance and pay only the minimum monthly payment, it can take decades or more to pay off the debt,” says David Levy, Editor at Edvisors Network. “Late payments result in late fees, and some credit card issuers will increase your interest rate if you’re late with a payment. Making payments on time will help you build a good credit history.”

As you build your credit, it’s a good idea to monitor your credit reports and credit scores for errors and signs of fraud, which will also help you maintain your hard-earned credit standing. You can get your your two free credit scores, updated every 14 days, at Credit.com.

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College Students Are Actually Pretty Good With Credit Cards

college-students-and-credit-cards

When people think of credit cards and college students, they don’t often conjure up an image of a responsible young adult, either because of stereotypes they’ve been exposed to or their own negative experiences. In reality, college students generally do a decent job managing their credit cards — at least, that’s what one survey suggests.

Most college students (72%) pay off their credit card balances each month, according to a survey by credit bureau Equifax. Of course, not that many students actually have their own credit cards. A recent survey by lendedu.com found that fewer than 40% of current graduate and undergraduate students actually have a credit card in their name. The survey occurred in June and included responses from more than 600 American college students ages 18 to 24, and, of that sample, 42% said they have at least one credit card. The margin of error for the entire sample is plus or minus 4 percentage points.

Only 10% of respondents with credit cards said they carry a balance (the remaining 18% said their parents pay off their balances each month). Even though paying your balance in full doesn’t directly affect your credit score, it’s a smart practice: Paying your statement balance means you’re not incurring interest charges on your purchases (three cheers for saving money), and it can help you keep your credit utilization rate low. (Your credit utilization rate is how much of your credit limit(s) you use, and it’s the second-most influential aspect of your credit scores. You can see how your credit card use affects your credit by getting two free credit scores, updated monthly, on Credit.com.)

Building Good Habits 

It’s a good thing that the majority of students in this survey are staying on top of their credit card debt, given that the majority of college students graduate with student loan debt, and paying off student loans is enough of a burden without also having to worry about getting out of credit card debt.

Regardless of how old you are, paying down credit card debt can be really challenging, because credit card interest rates tend to be much higher than rates on other kinds of debt, and it’s really easy to put off tackling credit card debt by just making minimum payments. Falling into credit card debt isn’t the end of the world, but to dig yourself out, you’ll need a plan. You can use this free credit card debt payoff calculator to help yourself set a goal for getting out of debt (and potentially helping your credit score along the way).

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