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What happens to student credit cards when you graduate?

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    Having a student credit card is one way for students to start building their credit. But if you’re nearing graduation or just weighing whether a student card is right for you, you may be wondering what happens to student credit cards when you graduate.

    What is a student credit card?

    A student credit card typically works much like a regular credit card, but is aimed specifically at students as a starter card. Starter credit cards for students tend to be easier to get approved for, as they’re offered with those who still need to build credit in mind. Additionally, student credit cards may have fewer rewards options and lower credit limits than other credit cards. Note that Chase does not have a student credit card available to new applicants.

    To open a student credit card, you may have to be enrolled in higher education or trade school. You’ll need to be at least 18 years old and if you’re under 21, you may be asked for a co-signer or proof that you’re able to make regular payments.

    Aside from requirements and rewards differences, a student credit card generally works the same way as most other cards. You can make purchases online or in person using your card and you must make at least the minimum payment each month to help avoid additional fees.

    What can you do with your card after graduation?

    You may be wondering what happens with your student credit card once you’re no longer a student. There are a few options on how to move forward:

    • Keep your card as is: This means you’ll either keep using the card as normal, or you’ll keep it open as-is but not use it.
    • Cancel your card:If you have no remaining balance, you can close your account with the issuer and either remain without a credit card or apply for a new one.
    • Upgrade your card:You may be able to switch to a non-student credit card with the same issuer.

    It’s also possible, depending on your issuer, that your account will be reclassified automatically once you graduate.

    The good news is your issuer usually won’t automatically close or cancel your account just because you’ve graduated. You may have time to decide what you want to do with your credit card as you begin to navigate post-graduate life.

    How to choose the right option for you

    When you’re trying to decide what to do with a student credit card after graduation, it’s also important to think about the pros and cons of your available options. One thing you may want to think about is your credit score. If you’ve been making consistent, on-time payments while you’ve had a student credit card, you’ll likely see that reported positively on your credit report. This may give you more options when deciding which path to take.

    If you haven’t given much thought to your credit score thus far, make sure to do a bit of reading on its importance. Your score can affect numerous things, such as your ability to rent an apartment, get an auto loan or mortgage, determine your interest rates when borrowing and more.

    Keep your card as is

    How long can you have a student credit card? Issuers will likely let you leave it open indefinitely.

    The main benefits of keeping your card the same are:

    • Your credit score will likely not be negatively impacted if you continue paying at least the minimum payment on time each month.
    • Keeping the card open maintains what may just be your oldest line of credit, which may help improve your credit score over time.

    Some of the cons of keeping your card as-is include:

    • This can be limiting, as you may be eligible for a higher credit limit, which may give you more spending flexibility, as well as help keep your credit utilization rate lower.
    • You may also be able to get a card with better rewards than a student card can offer. Non-student cards may offer more robust rewards programs. Plus, you might be able to find a card that has a rewards program that better reflects your interests or lifestyle.
    • If your student card has an annual fee, you may be able to switch to a card without one.

    Cancel your card

    If you’re not sure what you want to do or don’t think you want to continue using your student credit card, you may be wondering: Is it bad to close your student credit card? While the choice is purely personal, there are some potential cons to canceling your card, including:

    • The age of your credit is one of the factors that goes into calculating your credit score. By closing your student credit card, which may be your first or only line of credit, you may see your credit score take a negative hit.
    • If you cancel your card, you could lose access to any benefits or rewards that come with it.
    • If after canceling your student credit card you decide you want a different card, your credit score will be temporarily impacted, as a hard inquiry will have to be run on your credit.

    Upgrade your card

    If you’re ready to move on to a new credit card, you could consider upgrading your card. Some of these benefits may include:

    • You’ll likely maintain your credit age, which will preserve your credit score. Switching to a new card with the same issuer typically means your current account is converted, not canceled. This means you won’t lose the years of work you put into that line of credit.
    • There’s a chance you’ll end up with a better credit card overall once you transition away from the student card. Your new card may have a higher limit, better rewards and more perks.

    Some potential cons to upgrading your card are:

    • You won’t qualify for special introductory bonuses or promotions as you won’t need to fill out a new application for an upgrade.
    • Your issuer may run a credit check before upgrading your card. This would likely cause a small and temporary dip to your credit score.

    In summary

    Ultimately, what happens to student credit cards when you graduate usually lies solely in the hands of the graduate themselves. While it’s possible your issuer could automatically upgrade your card, it’s likely you’ll have to make that decision yourself. Or you may want to keep your card as-is or cancel it altogether. Be sure to weigh the pros and cons of each choice and take into consideration the importance of your credit score as you venture into adulthood. Note that Chase does not have a student credit card available to new applicants.

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