What Do You Recommend for a College Grad Who Wants a Credit Card To Establish Credit?

Establishing credit early is a good habit. It can help you secure a mortgage or auto loan, get you the best insurance rates and more.

However, it can take work to establish credit with no credit history.

What if you’re a recent college graduate with no work history and no credit history? What steps should you take to prove you’re worthy of a credit card?

That’s what a listener of the Clark Howard Podcast recently asked.

What Should a Recent College Grad Do To Get a Credit Card?

My nephew is a recent college grad. How do I get him a credit card?

That’s what a Clark listener asked on the Aug. 24 podcast episode.

Asked Auntie Gladdie in Rhode Island: “My nephew just passed his exam and is now a doctor of physical therapy. He knows I’m a huge fan of yours because I always preach the ‘Clark Way.’ He was so tired of me hounding him about signing up for a Roth IRA he finally did it at age 20!

“He is now asking me to help him sign up for his first credit card. He is looking to build his credit. He was offered a full-time position on Long Island where his girlfriend is finishing up her veterinarian degree. You always talk about establishing credit for those who have hit a rough patch, what about for new grads who are just establishing credit?”

Get a Credit Card While You’re Still in College If at All Possible

The best option for a young person to secure a credit card is to apply while enrolled in college full-time.

“That’s when you apply for a card,” Clark says. “Because they don’t require evidence of income typically for you to be able to get your first card because college-enrolled people are generally the least risky borrowers of all for credit card companies.”

It sounds like the nephew in this case is no longer enrolled in school. But his girlfriend is. If they were married, Clark says, he’d suggest that she apply for a credit card. And then add him as an authorized user to help him establish credit.

“But I don’t know their relationship. It would be risky for her because she’d be extending credit to him, and, well, who knows what the long-term is?” Clark says.

“You may know that. That would be the best way for him to establish credit. If she gets a card, which is very easy for her being in professional school, and then adds him as an authorized user, he’s going to have instant solid credit.”

3 Ways a Recent College Grad Can Establish Credit

Let’s say you are no longer in college. You’re a recent graduate. It may be harder for you to apply for and receive a credit card if you don’t have a credit history. But it’s not impossible.

One of these three Clark-recommended steps should work for you.

1. Apply for Your Own Card

With a full-time position in physical therapy, the recent grad in question can apply for his own card. He’s got a job and an income, which should help.

“That would be the simplest path,” Clark says. “The easiest path for him to establish credit and be able to get his own cards.”

2. Get One of the Petal Cards

Clark loves this non-traditional way of establishing credit. The Petal cards analyze your bank records for payment history instead of relying solely on your credit report, which may be non-existent.

These cards are Clark’s second choice.

3. Join a Credit Union’s Fresh Start Program

Traditionally known as a secured credit card but often called a “fresh start” program by your local credit union, this card allows you to establish credit by backing it with your own deposited funds.

You can typically hope to parlay your reliability with such a card into a traditional credit card in as little as six months, although it may take a while longer.

“The credit union programs are typically the best in the marketplace other than Petal,” Clark says.

Final Thoughts

It’s a good idea to establish a credit history early in life. If you can apply for a credit card while you’re enrolled in college as a full-time student, do it.

Otherwise, you may need to establish your credit as an authorized user on someone else’s account or by applying for a non-traditional card such as one of the Petal cards.