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Graduate Credit Cards
We are increasingly making more of our purchases on credit. Excessive use of this facility can clearly lead to long term debt problems and cause a real headache but it needn't be the most expensive form of short-term borrowing.
The credit card business is fiercely competitive but this offers the consumer a great choice, especially in the form of introductory offers.
As a recent graduate you probably have a lot of expenditure - moving home, furnishing a house/flat etc. so despite earning a salary you could find yourself with a substantial credit card balance.
In addition, it is estimated that in 2001 as many as 30% of graduating students had outstanding credit card debts. This means that you have an opportunity to take full advantage of some of the benefits.
Myth: Credit Cards are the most expensive form of debt. This is the line often bandied around even the most prestigious financial publications.
Fact: Credit Cards can be extremely cheap compared to personal loans, often it is possible to pay 0% interest for a sustained period of time.
Example: July 2007 Egg offers 6 months interest free credit on balances transferred before November 31 2007.
July 2007 £2k was transferred from NatWest to Egg, thus gaining 6 months interest free.
Mid November 2007 the £2k was transferred back to NatWest for a 10 day period hence gaining no interest.
Late November 2007 £2k transferred back to Egg, balance now interest free until end May 2008.
Result: Interest Free Credit For 11 months only 1 new card account opened.
Offers of this kind are always available DO NOT be afraid to switch your balances NEVER simply accept high rates of interest.
Where necessary if making a large purchase run 2 cards, purchase on first card, hold for interest free period and then transfer balance onto introductory offer as described above.
Warning: these introductory offers often lead into higher rates after the introductory period. Keep a check on interest payments and always have your next move lined up.
Remember the credit card companies seek to attract people to their cards through these offers and then assume you will stay. Play them at their own game. DON'T BE LOYAL, THEY WOULDN'T BE TO YOU.
The American Express Platinum MoneyBack Credit Card is at the moment one of the leading cashback cards on the market, offering up to a generous 5% cashback for the first three months of spending up to a maximum £4,000. As a graduate you could could earn up to £200 on this card just by spending your hard earned cash!
After the initial period three month period, the card offers a tiered cashback rate, so depending on how much you spend a year, as a graduate you will be able to earn between 0.5% and 1.5% cashback.
This card is great for graduates earning over £20,000 and provides you with all the perks associated with American Express.
This card does not come with an introductory or balance transfer deal, so will not be useful if you are looking to borrow on the card. But this is leveraged by the generous cash back amount available.
Find out more about the Platinum American express here.
Welcome to graduate finance, your guide to all things important to recent graduates.
