Are you a soon-to-be college grad who hasn't yet found a "real" job? With the U.S. unemployment rate still hovering close to eight percent, you've got a lot of company. There are many young people graduating from college this spring who will be working part time and temporary jobs while they search for a position more closely related to their field.
That makes it a terrible time to apply for a credit card, right?
While it may be more difficult to qualify for a credit card before you’ve landed a permanent position, when it comes to building a good credit record the sooner you can start, the better. One of the factors that goes into your credit score is the length of your credit history. So if you can get a card—and use it wisely—it will be to your benefit long term.
Having a good credit record might even help you land a better job. According to Experian, one of the three major credit reporting agencies, federal law allows potential employers to receive a modified version of your credit report. A good credit report may even give you a slight advantage over other job applicants, while a negative credit report may reduce your chances of winning the position.
Your credit card options
So how do you get a credit card before you get a real job?
Consider a secured credit card. With a secured card, you deposit a set amount of money in a special account with the bank that issues the credit card. The amount of your deposit may be equal to your credit limit or some percentage of your credit limit on the card.
A secured credit card works like any other card; you make charges, and pay the bills each month. If you fail to make payments, the bank takes the money out of the secured account.
If you demonstrate that you are able to handle credit responsibly, however, the bank may eventually reduce the amount you need to keep in your account or eliminate it altogether. (Or, if you’ve built good credit, you may qualify for a better credit card elsewhere.)
No matter how you get a credit card after you graduate, you should follow these basic rules when using it: