Just Graduated College? 3 Tips for Finding Your First Credit Card

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Looking for your first credit card? Read on for some features to be mindful of. 

If you made it through college without using a credit card, that’s potentially a good thing. More than 67% of college students have a credit card in their name, according to a 2022 U.S. News & World Report survey. But 46% of college students with credit cards have debt.

Meanwhile, now that you’ve graduated from college and either have your first job or are on your way to getting one, you may be ready to apply for your first credit card. Believe it or not, using a credit card could actually help you build credit. The key is to aim to pay your bills on time and in full every month, though.

Here are some points to keep in mind as you try to find the best credit card out of college.

1. Look at the rewards program

The nice thing about charging expenses on a credit card is that you get to collect reward points and cash back on your purchases, from big ones to everyday items like groceries. Compare different programs so you can ideally sign up for a credit card where you’re most likely to earn extra rewards and cash back.

Some credit cards, for example, give you 3% cash back on gas purchases. But if you’re moving to a city and won’t have a car, that perk won’t do you much good. Aim for a rewards program that aligns well with your anticipated spending.

2. Look at the interest rate

Any time you fail to pay a credit card bill in full, your balance gets carried forward and you begin to rack up interest on your debt. That’s why it’s important to be mindful of your credit card’s interest rate, or APR. The higher it is, the more money any amount of debt is going to cost you.

3. Pay attention to fees

From annual fees to foreign transaction fees, credit card users are routinely hit with fees for the privilege of being able to swipe their cards. Your goal should be to keep those fees to a minimum, or to only pay a fee when you’ll be getting something in return.

As an example, it’s somewhat common for travel reward credit cards to charge an annual fee. This isn’t always the case, but it often is.

If you’re charged a $95 annual fee, but in exchange, you’ll be able to save a lot on travel and score extra cash back, then your fee might more than pay for itself in the course of a year. But you shouldn’t pay a fee for a credit card you expect to swipe minimally, or one whose rewards program most likely won’t make it easy for you to recoup your money.

It’s a good idea to apply for one credit card at a time, especially when you’re first starting out. And so it’s important to choose the right one to kick off adulthood. Follow these tips, and with any luck, you’ll wind up happy with your choice — especially as those reward points start to accrue in your favor.

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