You may be able to keep any benefits you have with your student card after you graduate. Certainly do not cancel the card. At Discover®, for example, you can still snag 1 percent cash back and no annual fees. After you graduate, Discover will just reclassify your student credit card account so it’s not tagged as student anymore.

You may also want to upgrade to a Discover cash back credit card.

Cancelling a card, on the other hand, can negatively impact your credit score. If your student card is your oldest card, canceling it could reduce the length of your credit history, which is a factor in your overall credit score.

Shifting credit card options are just the tip of the iceberg for newly graduated students. Life after college is an exciting time of new beginnings and unlimited possibilities — many 20-somethings are truly out on their own for the first time.

But while some students may have continued living at home or held jobs while attending school, managing bills, budgeting, and a credit score after graduation can be an education in itself.

1. Upgrade Your Card

2. Budgeting for Life After School

3. Why Good Credit Matters

4. Good Credit Card Practices

1. Upgrade Your Card

Many students have a credit card, but what happens to those cards after graduation? Such accounts can be fantastic launching points for helping build credit as an adult.

Student cards are usually issued with lower credit limits that reflect the higher risk students with no income or low income can pose to credit card issuers.

After you graduate, call your credit card provider to update your information. This includes:

  • Your date of graduation
  • Contact information
  • Housing information (such as rent or mortgage payments)
  • Income

Sharing this information allows your credit card issuer to consider you for a credit line increase, since your ability to pay increases with a higher income. You can often do this online or within your mobile app.

If you’ve been enjoying rewards as a perk of your student credit card and aren’t ready to redeem them, some credit card issuers allow you to transfer them to other cards. There might be another card that’s better suited to your post-graduate needs and lifestyle.

2. Budgeting for Life After School

Even with a degree and a professional job, entry-level paychecks may not go far. Now is the time to start budgeting — not only is it a good habit, but smart money management now can set you up for a solid foundation for your working life.

  • Create an expense and budget spreadsheet. The aim of your spreadsheet is to calculate the bills you expect to pay, like rent, insurance, internet and utilities, so that you know what you can afford. It’s best to overestimate the amount you expect to pay so you can be sure you’re not shorting yourself.
  • Think before buying a new car. Your car can be a major expense. Consider whether you could buy a used car instead, and put the extra money toward long-term savings or to paying off other debts. Cars are meant to be a form of transportation, not a financial burden.
  • Consider moving home or living with roommates. It might be tempting to rent your own apartment, but you can save some serious money by living with roommates, especially in a high-cost city. There’s no shame in moving home with your parents, especially if it can help you build up your savings.
  • Plan for paying off debts. Focus on paying off your highest-interest debts first, while still making at least the minimum monthly payments on the others. One of the biggest financial challenges for many new graduates is paying off their student loan debt. If you’re a Discover customer, you can use the Discover Paydown Planner to set a target date for paying off your balance. Or use the free Student Loan Repayment Calculator to estimate your monthly payment.

3. Why Good Credit Matters

Ensuring you spend within your budget limits will help you control your credit. Good credit isn’t just a number on a page — that data can have large implications for your adult life. Here are just a few examples:

  • Potential employers may check credit. Some companies check credit to understand how responsible you are meeting payment deadlines and managing your money. It’s good to review your credit report to see what a potential boss may find. Some credit card companies, like Discover, offer free credit checks.
  • Rental application may check credit. Landlords may use a consumer report to evaluate the rental applications of potential tenants, and the most common type of consumer report is a report from a credit reporting agency.
  • New loans use credit scores. Lenders review your credit score as part of your borrowing application. Poor repayment history, such as partial or late payments, may damage your score and ability to borrow.
  • Responsible actions can redeem your score. Pay bills on time and in full, and don’t use too much of your available credit. Never use credit cards to live beyond your means. To help monitor your credit card balances, consider setting up credit card alerts that will notify you by email or text when your balance exceeds an amount chosen by you.
  • Credit impacts your interest rates. A lower credit score suggests you may be a higher-risk borrower, and lenders who are willing to lend you money may choose to do so at a higher interest rate. That goes for loans or credit cards.

4. Good Credit Card Practices

While credit card rewards that fit your lifestyle are a great way to get more out of your budget, avoid applying for brand cards at every retailer you frequent. Holding more than a few open lines of credit makes it much easier to miss payments and lose sight of your total amount of debt. Also, each time you apply for a new line of credit the inquiry is recorded on your credit file. Frequent applications for credit in a short time frame can have a negative impact on your credit score.

That said, if you commute to school or work, a card that gives extra rewards for gas purchases can help add more to your rewards bank. The best rewards cards often have higher application requirements than standard credit cards. If you spent time in the workforce and managed credit responsibly between undergraduate and graduate school, you may be able to qualify for cards you didn’t qualify for previously.

If you’re studying overseas or planning your first vacation, be sure you understand which countries accept the card and if the card has foreign transaction fees. Contact your credit card company to inform them of your travel plans, or overseas charges may raise an alert with the fraud protection service and the card could be declined.

A poor credit score isn’t the end of the world. Responsible actions on your part can redeem your score. The key to cleaning it up: pay bills on time and in full, and don’t use too much of your available credit. In other words, be as smart with your budgeting as you were with your college studies, and your finances and future self will thank you.

Originally published August 21, 2015

Updated April 14, 2020

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.