You used your student card to start building credit while in school, but what happens after you graduate?
The short answer – nothing. While you sometimes need to be enrolled as a student to qualify for a student credit card, you generally don’t need to stay enrolled to keep it open. The account typically stays open, and you can continue using your card and making payments as usual.
But what if you’ve used your student card responsibly to build credit, graduated and have a full-time job with a reliable income? It may be time to consider your options. Let’s look at what you can do with your student credit card after graduation.
Keep the student credit card open
One option is to simply keep your student credit card open and continue using it. Keeping the account open can make sense, particularly if this card is your oldest account. The age of your oldest open account may impact your credit score. Among other factors, how long your credit accounts have been open, the average age of your accounts and the age of your oldest account may impact your credit score. So, even if you decide to use another credit card for everyday purchases, keeping your student card open may help your credit score.
Keeping your student credit card open can also help keep your credit utilization ratio – another component of your credit score – low depending on the balance on your student credit card account. Your credit utilization is the percentage of your total available credit currently in use. Closing an account means your total available credit decreases and your credit utilization percentage may increase.
If you’re not using the card regularly, it can be a good idea to use it occasionally – some issuers may close cards due to inactivity. It’s also a good idea to check the account regularly for unauthorized charges.
Upgrade your student credit card
You can ask your card issuer for an upgrade, also known as a product change. An upgrade allows you to convert your student credit card into a non-student card that may have better perks, such as the ability to earn more points or miles on your purchases. Upgrading can be particularly beneficial if you’re looking for a card that better suits your post-graduation lifestyle, such as one that has a higher limit or lets you earn more points for travel or dining out.
When you upgrade your card, your payment history transfers along with it, and you’ll continue to benefit from the age of the account and the positive payment history you’ve built. You typically won’t be subject to a credit inquiry when upgrading an open account.
Keep in mind that your issuer can decline your upgrade request, even if you’ve used your student card responsibility. When you request an upgrade, your card issuer will decide whether you’re eligible.
Open a new credit card
As you transition from student life to a full-time career, your financial needs and goals can evolve. With a steady income, your spending habits and priorities can shift, and it can make sense to apply for a new card that better matches your lifestyle. You might want a card that lets you earn airline miles and offers travel perks, allows you to earn more points on groceries or dining or has a higher limit.
If you choose to open a new card, that doesn’t mean you have to close your student card – you can keep your student credit card open to maintain your credit history and total available credit.
Keep in mind that applying for a new card typically involves a credit inquiry, which can impact your credit score. While a single inquiry doesn’t usually have a big impact, applying for multiple cards in a short period can have a larger impact on your credit score. So, if you’re looking for your next credit card after graduating, it can be a good idea to only apply for cards you think you’ll be approved for and to look into prequalified credit card offers.
Should you close your student credit card when you graduate?
While closing your student credit card is an option, it’s important to weigh the pros and cons first. You might consider closing your student credit card if the card comes with an annual fee, especially if you have other credit cards that offer better benefits. Or, maybe in a few years, you’ll find that you have too many credit cards and you're having trouble keeping track of them, so closing your student card can help simplify things.
Remember that closing your student credit card can have downsides. Closing an account can affect your credit score which could negatively impact your creditworthiness.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
