So you’ve just graduated from college and you’re making the transition to the real world. There’s so much that you need to think about! Renting your first apartment, finding a job and, for many recent graduates, getting their first credit card is also on the post-college to do list.
For someone who has never had a credit card before and is interested in starting to build credit, this can all seem very overwhelming.
However, establishing credit is crucial for several aspects of your life. Whether you want to buy a house or car or get insurance, having good credit is necessary. And you can’t have a good credit score, or any credit score for that matter, without first having a credit card.
If you’ve never applied for a credit card before, you might not even know where to start. There are so many credit cards out there, so how do you know which one to pick? What are APRs, annual fees, transaction fees and rewards?
There are clearly several factors that should be taken into consideration when deciding which beginner credit card to choose. Here are some of the best first credit cards for college graduates.
Discover it Secured Card
The Discover it Secured Card is a great first credit card for anyone because it is designed specifically for those with no credit. The card comes with no annual fee AND it offers plenty of rewards including 2% cash back on gas or restaurant purchases and 1% cash back on all other purchases.
Like all secured credit cards, this Discover it card does require you to put down a deposit prior to opening an account. However, the good news is that the amount can be as low as $200 and whatever amount you put down as your deposit will be your credit limit.
This is a helpful feature because it stops you from overspending, which is something that tends to happen with new credit card holders.
Blue Cash Everyday Card from American Express
American Express is a very reputable financial services company. Their Blue Cash Everyday Card is a fantastic first credit card because it gives you cash back on most purchases. This can be helpful for college graduates, as they tend to have some large expenses.
If you lived in the dorms during college, you might find that you need to start buying more groceries- if you have this credit card, you’ll get 3% cash back on grocery store purchases up to $6,000 per year! You can also get 2% cash back at gas stations and 1% cash back on every other purchase.
While some other credit cards give hefty cash back options, the Blue Cash Everyday Card is unique because if users spend $1000 in the first three months of having the card, they can get a $150 cash back bonus!
Not only can you get these helpful rewards, but this American Express card also has no annual fee and allows users to have a credit card balance without incurring interest for the first year.
Capital One Secured MasterCard
Like the Discover it Secured Mastercard, the Capital One Secured MasterCard requires a minimum security deposit of $200 before opening an account.
However, a unique feature with this Capital One card is that users can choose to pay the deposit in installments and can even increase their security deposit up to $3000! The option to pay in installments can be a huge financial relief for financially struggling recent graduates.
The Capital One Secured MasterCard also charges no annual fee and no foreign transaction fees so if you’re taking a gap year before looking for a job or if you’re a travel fanatic, this can be quite helpful.
OpenSky Secured Visa Credit Card
OpenSky is a unique company in that it believes in equal opportunity for everyone, so there is no credit check run to apply. This feature can be helpful to recent graduates because statistics show that most college students take out loans, which can reflect in your credit score.
If you have been unable to pay interest payments or if you’ve been a graduate for six months and are already falling behind on payments, this can negatively impact your credit score. Because OpenSky doesn’t require a credit check, you’ll have absolutely no problems with obtaining this credit card.
As all secured cards do, there is a minimum $200 deposit required to obtain an account- however, this deposit is refundable and also becomes your credit limit.
While there is a $35 annual fee, that amount is quite low compared to other credit cards- and with the other perks this card offers, you’ll hardly mind paying the annual fee.
While looking for your first credit card as a college graduate can seem stressful, the process isn’t as hard as you’d think.
Every credit card offers different rewards, has a different annual fee and is catered to a specific demographic. Not every credit card will work for you- beware of those with high annual fees, hidden fees and high credit credit limits, as they can all push you into debt.
Remember that when you obtain a credit card, you should only use it for making purchases that you know you can afford. If you use your card wisely, you’ll never have to worry about overspending or falling into debt.
At the end of the day, keep in mind that there is no one magical credit card that is better than all the rest. Just make sure to do your research and find the card that is best for you.