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Credit card best practices for recent graduates

After leaving third-level education, you will probably have an eye on getting access to credit facilities more suited to those starting out their careers. This can be very useful if you are moving for work, upgrading your car or apartment, or generally getting on your feet as a professional.

However, given the fact that you likely do not have an extensive borrowing history and/or student debt, it can be a challenge to get a card offering the more interesting deals such as rewards or 0% interest on purchases. You may even find it difficult to get access to standard credit cards also.

There are other options also. Credit builder cards are a trusted way to build your credit profile steadily, although they don’t have some of the perks of other cards and have higher interest rates and lower spending limits. If you can pay back the amounts owed on time then these can be a good source of short term credit as well as a means to increase your credit limit.

It’s also important to keep in mind that you should upgrade your student bank account to a graduate account after you leave education. This allows you to avail of overdraft facilities in most cases, although there will usually not be a credit card associated with the new account.

If you use this overdraft wisely and pay back on time this alone will improve your credit score, while also giving you access to the cash needed to get started with post-graduate life. It’s important to make sure you can pay it back on time or it will become a burden to your credit profile.

You student loan is another matter, and you should have separate plans for resolving this. This will usually involve repayment over a longer period at lower rates so you shouldn’t use your card to pay off this debt.

If you have outstanding student debt then this overdraft could be the ideal way to pay off this debt which will take a weight ff your finances while also improving your credit profile. Overall, there should be a limited but sufficient set of options open to all graduates regardless of their credit profile, so if you shop around and apply wisely you should be ale to set up your financial situation well for years to come.