If you are an almost graduating student with a credit card and wondering with your student credit card what happens after graduation? The good news is that when you graduate you don’t have to leave your credit card behind.
After graduation, credit card companies will let you keep your credit card for as long as you want to. Keeping your student credit card after graduation also has its benefits, as this helps strengthen your credit score as you continue to make payments on time and pay off your balance each month. Your card issuer may decide to upgrade your account, which will enable you to benefit from richer rewards or better terms while you still preserve your credit history.
Here, we bring you ways you can use to handle your credit card after graduation.
Ask Your Issuer For A Different Card
If your student card does not come with appealing rewards, or you want to opt for another card from the same issuer, you can ask the company to convert your student card to another one of its products that is more appealing. For some issuers, an upgrade can be offered for your card without your prompting.
Once you do this, you can still benefit from your student credit card history. Your credit report will date back to when you first opened your student card and not necessarily when you received your new card.
Keep Your Student Credit Card After Graduation
If you really want to stay with your current credit card, intimate the card issuer and let the issuer know that you’ve graduated from college but wish to continue with your card. Your lender may reclassify your card so it’s no longer considered a student credit card. If you start earning income from a full-time job, you may also stand a chance for a credit limit increase, or ask the card issuer to lower your APR in recognition of your higher income and history of on-time payments.
If you want to opt-out of your student credit card and your issuer has nothing better, you can hold on to your card and make use of it occasionally. This will help you maintain a long credit history, which will account for 15% of your FICO credit score.
Consider Closing Your Account
Before you consider closing your student credit card account, you should consider the following.
Closing your student account may shorten the average length of your credit history, which may reflect negatively on your credit score. This means that the longer your credit history, the more positive the impact on your score if you make regular payments on time.
Closing your card could also affect your score and shrink the total amount of credit you have available. Credit scores look at how much credit you’re using compared to your limit, which is known as your credit utilization ratio.
If you close your card, you’ll have less available credit, and any debt you have will account for a larger share of your credit limit.
If you have trouble managing multiple accounts, or if you want to avoid taking on additional debt you may want to close your account. You may also need to close your account if a parent co-signed on the account and wants to opt-out. The lender won’t allow you to keep the card in your name.
You can still keep your student card even after college, even if you upgrade to a new one after graduation to help you build a long and positive credit history.
And even if you want to close your card, although it may impact on your credit score, just understand that you have lots of time to strengthen your credit score. All you need to do is make on-time payments on all your accounts and keep other balances low.