If you’ve just graduated from college, you will now be taking your first steps into the working adult world. One of the things you may consider doing is to apply for a credit card. If so, you need to know a few basics about how to find a credit card and how to manage it responsibly, or you could end up making costly mistakes.
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- Try your bank first. One of the easiest ways for college grads to get a credit card approved is to go to the bank they already hold accounts with. Knowing you already, the bank may be more willing to approve your application even if you don’t have any credit history. It will also be easier to pay your bills and manage your credit card, as it will simply be a case of shifting money between accounts at the same institution
- Don’t fall for marketing hype. A common thing that happens to students when they graduate is that they are targeted by marketing campaigns, leading to lots of ‘special invitations’ to apply for credit cards they have been ‘pre-approved’ for. You should ignore all the marketing, promotion and hype and simply focus on going out there and finding a credit card that suits you.
- Keep your credit limit modest. It’s quite simple – if your credit limit is small, you can’t be tempted to overspend and end up in debt. For your first credit card, a modest credit limit will be adequate.
- Always pay your bill in full each month. Don’t be tempted to save money by just paying the minimum requirement, as it won’t save you money. It will do the opposite, as interest is added when you don’t clear the full balance each month.
- Don’t apply for everything, and don’t get too many cards. Sending in a flood of applications for credit cards, in the hope that you’ll at least be accepted for one, can damage your credit score. Apply for a card, wait to see if your application is accepted, and if it isn’t you can check your credit report to find out why. You may need to go for a smaller credit limit or a higher APR for your first card. Also, for a new graduate, one credit card should be adequate. If you have too many, you could overstretch your finances and end up with debt.
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