What are the best credit cards for graduates?

Key takeaways

• Once you’ve graduated, eligibility for credit cards depends on income and credit rating

• The best card aligns with individual needs, whether for credit building, travel, or debt consolidation

• Banks offer graduate accounts with favourable overdraft terms to help with student debt management

What are graduate credit cards and why should I get one?

Graduate credit cards have the key features of regular credit cards, allowing you to spend on credit and then pay it off the following month.

More than just a piece of plastic; they're a stepping stone to financial maturity. By using a credit card wisely, you can:

• Budget more effectively: Spread the cost of purchases over time, making it easier to manage your cash flow each month

• Build a credit history: Establish and improve your credit rating, which is vital for future borrowing

Will I be eligible for a credit card when I graduate?

You might be able to get a credit card once you’ve graduated – in the same way, many students are eligible for a student credit card.

The interest rate or APR and other terms you’ll be offered will depend on your personal situation, such as your income and your credit rating.

Card providers have their own lending criteria, and as a new graduate, you may find it challenging to get the best deals if you have a limited credit history.

If you have a low credit rating, because you haven’t used credit much in the past, you could benefit from taking out a credit builder credit card might be the best option to help boost your credit score.

You can also take steps to improve your credit rating, such as getting on the electoral roll and paying regular bills on time.

What should I consider before getting a graduate credit card?

Before you apply for a credit card, take a moment to consider:

• Interest rates and fees: How much will it cost you to borrow money on the card if you don’t clear the balance in full or miss a payment?

• Credit limits: Know your credit limit and try not to continually borrow right up to the limit to keep your credit utilisation low. Be sure to plan how much of it you intend to use.

• Repayment strategy: Aim to clear your balance every month to avoid interest charges. The best way to avoid missing a payment is to set up a direct debit so the payments are made automatically.

For a deeper understanding, our guide explains more about getting your first credit card and how cards work.

Do I need a graduate credit card?

Before looking at potential graduate credit cards, you should think about if you actually need one, and if you can afford one. It should only be used:

• For extra consumer protection on large purchases such as a new laptop

• If you can comfortably afford repayments after all your essential bills have gone out

• If you’re using one for rewards, such as cashback, you’ll need to clear the card each month to benefit from these

What types of credit cards are available to graduates?

As a graduate, you have access to a variety of credit cards, each with its own set of advantages:

• Credit builder credit cards: Improve your credit score for better borrowing rates in the future.

• Purchase credit cards: Enjoy low or 0% interest on new spending for a set period.

• Balance transfer cards: Move high-interest debt to a card with low or zero interest for a fixed period, usually with a transfer fee.

• Balance transfer and purchase cards: Benefit from low or 0% interest on both spending and balance transfers for a set period.

• Cashback and rewards cards: Earn perks for paying off your balance each month, though these cards may have fees.

• Overseas spending credit cards: Save on fees when using your card abroad.

• Money transfer cards: Transfer cash to your bank account at a low rate, typically with a transfer fee.

What is the best credit card for graduates?

The best credit card for you as a graduate will depend on your individual circumstances and what you intend to use the card for.

Whether it's building credit, spending on your travels, or consolidating debts, each card has specialist features to help.

The first step is to decide what you want to use the card for. Do you need a 0% interest card to spread the cost of a big purchase, for example, or are you looking for a card with cheap (or no) overseas costs? Once you’ve decided, then use an eligibility checker, which will show you the available options, including your chances of being approved.

What affects my chances of acceptance for a graduate credit card?

Whether or not you’ll be accepted for a credit card will depend on a range of factors, such as your income, your outgoings (how much disposable income you have), and your credit score.

Card providers have their own lending criteria, and as a new graduate, you may find it challenging to get the best deals if you have a limited credit history.

A credit builder credit card could be a viable option to enhance your credit scores and secure better borrowing rates in the future.

What are my alternatives to a graduate credit card?

Beyond credit cards, banks offer graduate accounts with interest-free or low-interest overdrafts designed to help you clear student debt within a certain timeframe.

Successfully managing this debt is a great way to demonstrate financial responsibility to future lenders.

Graduate loans might also be available, but you should have a solid repayment plan in place if you are going to take on more debt.

Graduate credit card vs graduate account overdraft

A graduate credit card can be useful for many reasons. It can help with short-term spending, building your credit score, consumer protection on big purchases, and other perks such as cashback or rewards.

However, it’s only a benefit if you are paying the card off each month otherwise you'll be paying interest - which wipes out any benefits attached to the card.

You may also have a graduate overdraft and if it’s short-term cash you need, your overdraft could be a better way to borrow. If it’s a 0% interest overdraft, you can use this money without paying interest. Before you take money out of an overdraft, make sure you’ve checked if any fees apply.

Other useful guides

If you’re looking for more information, we have a selection of guides to help:

• How to get accepted for credit cards

• Getting your first credit card

• Find the best student bank accounts

Compare credit cards with MoneySuperMarket

MoneySuperMarket is here to help you compare deals from the UK's leading card providers. Our service shows your chances of approval for all credit cards, allowing you to compare options easily and apply with confidence, without harming your credit score.

MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead, we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.