Should Grad Students Apply for Credit Cards for College Students?

If you're in graduate school, it may be time to ditch that college student credit card for one that offers better incentives and perks.
Lindsay Konsko
By Lindsay Konsko 

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If you’re in graduate school and have built up a decent credit history over the past few years, it may be time to ditch that college student credit card and instead apply for a regular credit card for better rewards, lower interest costs and additional perks.

Who should use a student credit card?

With high approval rates, student credit cards can be a great tool to use to start building your credit while you’re still in school. Building and improving your credit history is crucial for long-term financial success, as it is one of the most important factors lenders use to determine your creditworthiness when you apply for a mortgage, a loan, or a credit card.

Some student credit cards also offer the same types of rewards that regular cards do, like cash back on everyday spending, signup bonuses and free FICO credit reports so you can track your credit progress.

In addition, student credit cards tend to be more lenient with cardholders. Some won’t raise your annual percentage rate if you pay late, giving you time to adjust to owning a credit card for the first time. Most also come with no annual fee, so you don’t have to worry about getting charged just for being a cardholder.

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When it’s time to move on

If you’re in graduate school and you’ve already built up a solid credit history, it may be time to upgrade from the student credit card.

That’s because student credit cards usually come with higher interest rates than regular cards, since those who apply lack a credit history. A recent study by says that students new to credit cards are likely to pay an average annual percentage rate, or APR, of 21.4%, although some cards offer a lower initial rate than this.

In addition, regular credit cards may offer additional perks, like 0% introductory APR periods on purchases and balance transfers, bonus points for adding an authorized user to the card, and rewards for spending on travel, dining, gas and groceries.

So if you plan on carrying a balance each month and built up your credit history as an undergrad, it’s probably a good idea to apply for a regular card that carries a lower APR and better rewards. You’ll save on interest payments and rack up bigger bonuses.

If you already have credit card debt, you can also consider doing a balance transfer from your college student credit card to a traditional card. Some cards offer 0% interest charges on balance transfers and purchases for as long as 18 months after signup, while most student credit cards carry a true balance transfer cost between 12.62% and 25.99%. This means you’ll likely save quite a bit of money on interest costs by choosing a regular card over a student card when doing a balance transfer.

Regardless of which card you choose, remember to carefully read the terms and conditions of any card you apply for before signing on the dotted line. Carefully weigh the pros and cons of each card and compare cards to get the best possible deal.

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