8 Credit Card Tips Every College Graduate Should Know

Congratulations, graduate! You’re about to launch yourself into the real world, navigating new experiences like jobs and apartments — and, in many cases, applying for your first credit card.

Why should you consider getting a credit card? Establishing a positive credit history is an essential part of post-college life — especially because your credit score could determine how much interest you pay on your car loan or whether you get approved for your next apartment.

We’ve put together a list of eight credit card tips every college graduate should know, from how to build good credit to how to maximize your credit card rewards. Read our list before you fill out your next credit card application — and read it again once you get approved for your new credit card.

1. If you don’t know your credit score, check it (for free)

The first thing you’re going to want to know as a new college graduate is how to check your credit score. Many credit card issuers offer free credit scores to cardholders, making it easy to know where you’re starting from and track your progress over time. Log in to your credit card account to check whether your issuer provides your credit score.

If you don’t have a credit card yet, there are other ways to check your score for free. CreditWise from Capital One, for example, is a free app that monitors your credit history, provides updated credit scores and offers tips to help you improve your score. You don’t have to be a Capital One cardholder to download and use CreditWise. American Express offers a similar service called MyCredit Guide.

You can also request a free weekly credit report from AnnualCreditReport.com.

2. Upgrade your student credit card

Many college students don’t realize they can upgrade a student credit card after graduation. Instead of canceling your student credit card and applying for a new line of credit, you can call your issuer and ask to upgrade your existing credit card.

There are a few reasons this is better than canceling and applying for a new card. For one, you get to keep your credit account active — which adds to the length of your credit history and has the potential to boost your credit score. Plus, you get to maintain your relationship with your credit issuer. If you used your student credit card responsibly during your college years, your issuer may offer you an upgraded card with a higher credit limit, a lower interest rate and better rewards.

3. Prequalify before you apply

Many new graduates don’t realize that every credit card application they complete has the potential to temporarily lower their credit score. That’s because credit issuers track how often you apply for credit — and if there are too many new credit inquiries on your credit report, your credit score will suffer.

This is especially tough for younger people who often fall within the “fair” credit score range to begin with due to their more limited credit histories. That’s where prequalification comes in handy.

Here’s how it works: The credit issuer performs a soft credit check, which doesn’t impact your credit score but gives the issuer the information it needs to determine whether you’re likely to be eligible for a particular card.

Once you’re ready to apply for your new credit card, the credit issuer will perform a hard credit check. This credit inquiry is reported to the three major credit bureaus (Equifax, Experian and TransUnion) and will be included in your next credit score assessment. But don’t worry — if you keep your new credit inquiries to a minimum, the impact on your score will be minimal and will decline over time if you don’t continue adding new inquiries.

4. Understand the terms of the credit card that you want to apply for

It’s in your best interest to familiarize yourself with the terms and conditions of a credit card before applying. This is because important information, like the annual percentage rate (APR), card fees and legal notices, is housed in what’s called the Schumer Box. This is often found on a credit card’s application page as a pop-up box or downloadable PDF.

You’ll want to be fully aware of the credit card’s interest rates and potential costs — such as a hefty annual fee — before applying since some cards have much higher penalty APRs or late payment fees than others. Additionally, if you’re looking for a credit card with a 0 percent intro APR offer, you will find that information in the Schumer Box as well.

5. Pay your bills on time and keep your balances low

Five factors impact your credit score:

1. Your payment history
2. Amounts owed
3. Credit mix
4. Account age
5. Recent inquiries

Your payment history and credit utilization ratio are the two most important factors in your FICO credit score — which means that if you miss a credit card payment or max out a credit card, you could do significant damage to your credit.

So, when you’re trying to build credit quickly, two of the most impactful things you can do are to pay your bills on time and keep your card balances as low as possible.

6. If you’re not earning credit card rewards, it’s time to start

It’s never too early to learn about credit card rewards. The more you understand about earning and redeeming rewards, the more you’ll be able to get out of your credit cards — and the best rewards credit cards have a lot to offer.

There are two major types of credit card rewards:

• Cash back credit cards: These cards offer a percentage of cash back on every purchase (think of it as a tiny discount)
• Travel credit cards: These cards offer points and miles that can often be redeemed for travel bookings or statement credits toward previous travel purchases

Many cards offer heightened rewards in specific spending categories, like groceries or online shopping. These types of cards can be lucrative if you make the most of them.

For example, if you’re planning on furnishing your first apartment, a credit card like the Prime Visa could save you a lot of money. It offers unlimited 5 percent back at Amazon.com and Whole Foods Market with an eligible Prime membership; unlimited 5 percent back on Chase Travel^SM purchases with an eligible Prime membership; unlimited 2 percent back at restaurants, at gas stations and on local transit and commuting (including rideshares) and unlimited 1 percent back on all other purchases.

You may also want to consider the Capital One Quicksilver Cash Rewards Credit Card — or, if you’re still working on building your credit, the Capital One QuicksilverOne Cash Rewards Credit Card, which is available to people with fair credit. These flat-rate rewards cards both offer 1.5 percent cash back on every purchase (as well as 5 percent cash back on hotels and rental cars booked through Capital One Travel; terms apply) and are great introductions to the world of cash back credit cards.

7. Always pay your credit card bill in full

If you want to get the most out of your credit card rewards, be sure to always pay your credit card bill in full. Carrying a balance often comes with high interest charges — on average, 20.14 percent as of January 2025 — which will likely cost you more than you’re earning in credit card rewards. Don’t make a purchase you can’t afford to pay off just because it earns 5 percent cash back!

Some people mistakenly believe that leaving a small balance on their credit cards will improve their credit score. This myth is not only incorrect, but it will also cause you to throw away money on interest. For good credit, pay your bills in full as often as you can and make every payment on time.

8. Don’t open too many credit cards too soon

Credit card issuers may consider you a risky borrower if you open several credit cards within a short time span, as it may look like you’re about to take on debt. On top of that, each application subjects your credit score to a hard inquiry, which temporarily knocks it down a few points. Doing so several times back-to-back would definitely have a negative effect on your credit score that you probably don’t want.

A good rule of thumb is to wait at least 90 days between credit card applications, although each issuer has its own set of rules. For instance, Chase adheres to the Chase 5/24 rule, limiting you to opening five credit cards within 24 months, even if you opened cards with another issuer. The longer you can wait between applications, such as six months, the better.

The bottom line

Knowing how to use credit cards responsibly can save you money, put you on the path toward good credit and set you up for a strong financial future. Once you understand how to track your credit score, build a positive credit history and maximize your credit card rewards, you’ll be better prepared for your post-college life — no matter what happens next.