Applying for a Credit Card
Check out our guide on credit cards. Including your best options and top spending tips.
If you’re a graduate and you haven’t already got a credit card, it’s worthwhile to start thinking about applying for one. Those who are really sensible with money can even find that it makes them better off than they were without one.
There are a lot of deals out there though, and it can be difficult to work out which cards are the best and which ones will be suitable for you.
What’s in this guide?
Why might you need a credit card after uni?
It can improve your credit rating
Many people think that the fact they’ve never had much credit will stand them in good stead when they do eventually want to get finance for a big item, or when they want to take out a mortgage. In actual fact, the opposite can be true!
If you’ve never had any credit, you haven’t proven that you’re reliable when it comes to money and can manage your finances without missing any payments. So if you take out a credit card, and you’re sensible with it, it can actually improve your credit rating.
If you want to know your credit score then check yours for free here.
You could pay off your shrinking 0% overdraft
Within a couple of years of graduating, your 0% overdraft allowance will be significantly reduced. If you’re still using a large chunk of it to live on, you’ll find that you start incurring charges and it becomes even harder to get out of it.
A good option here is to take out a 0% credit card instead, and transfer the balance. You could save quite a substantial amount of money from a process that takes less than 15 minutes.
It’s the most secure way to shop online
If you’re anything like us, you probably do quite a bit of shopping online. It’s easier, cheaper, and more convenient. But have you thought about the security issues?
If you do come across a problem when you buy something online (like flights), you’re much more likely to be covered if you paid with a credit card. In fact, we’d recommend always using a credit card for online purchases, even if you’re buying from a reputable company.
Which cards are the best for graduates?
The best 0% interest deals
If you have a good credit rating and want to go for the best credit card available then these two offer 0% interest for long periods of time.
Halifax are a great provider. You’ll get 17 months at 0%, though they only guarantee that 51% of applicants will be offered the deal.
If you’re not, you’ll get 12 or 9 months. After the interest free period, you’ll be charged 16.9%-25.9% depending on circumstances.
Tesco isn’t just for your weekly grocery shop. Now that they’re also providing banking services, they’re becoming known for offering some of the best deals around for credit cards.
You’ll get 16 months of 0% interest, and as a bonus, you’ll also earn Clubcard points on all your purchases. You must earn over £5,000 to apply, and bear in mind that after the interest free period, the rate jumps to 16.9%. Be organised and change before you incur the fees.
The best poor or no credit history cards
These cards are best for graduates with a poor credit rating. If you are denied when applying for a credit card then you may have to go for one of these first in order to build up your reputation to the banks.
This card is designed for those with poor or no credit history, so while it’s easier to be accepted, the rates are typically high.
At 34.9%, you must ensure that your paying the balance in full every month, without exception. You’ll get a bonus of 3% cashback on all spending.
Capital One Classic Extra
This card offers the same rate of 34.9%, so again, you absolutely must pay it in full every month! We really can’t stress how important this is.
You’ll get 0.5% cashback on all purchases, and you’ll also receive a credit of £10 a year on your account.
Top credit card tips
There’s no need to even visit your local bank to apply for your credit card. The process is even easier when you do it online, and you could have your card with you in just a few days.
Use it, but use it sensibly
If one of your reasons for getting a credit card is to boost your credit rating, this will only work if you actually use it.
We’re sure we don’t need to tell you this, but be sensible with it. Just a few missed repayments could totally ruin your credit rating in the long term.
Don’t get complacent
You might have the best deal for the time being, but offers change regularly and once you’re out of the initial interest free period, you could end up paying much more than you need to.
Get into the habit of regularly checking the situation, and make a balance transfer if it means getting a better deal.
Do you use a credit card? Have you found it a helpful way to manage your finances?