Why You Shouldnâ€^™t Cancel Your College Card After Graduation

Many credit cards are targeted toward college students. Their perks are tailored toward students’ preferences, with low fees and discounts at stores students frequently visit. After graduating, it might feel natural to cancel your student card and move on to a new one with a higher credit limit and better rewards. However, here are some reasons why you should think twice before canceling your college card.

1. Your credit score may drop

Part of what determines your credit score is the duration for which you hold a credit card. In fact, 45% of your FICO credit score is calculated from how long you keep a credit card open. By canceling your college card, you risk hurting your credit score. Therefore, you should not cancel your student card even if you are no longer a student. However, don’t leave it inactive because credit card companies will likely cancel your account after a certain period of inactivity. Instead, you should occasionally use your college card to keep your account open, maybe on a small subscription like Netflix. By doing so, you will help preserve your credit score in the long run.

2. Potential to accumulate debt

Graduating means finding a job, most likely one that pays a higher income than what you’ve received before. Higher income encourages increased spending, oftentimes fueling debt on top of your copious student loans. If you tend to overspend, upgrading to a new credit card may not be the best idea, since student cards often have low credit lines and limited spending. Different cards may have higher credit lines, allowing you to spend more money than before, regardless of whether or not you actually have that money to spend. If you commonly fall to the temptations of shopping, keeping your student card might be a better option. 

3. Higher annual fees

Most college cards have no annual fees, since companies understand that college students have limited money to spend. However, many other credit cards have annual fees, some of which may be very high. It is important to note what the annual fee of a credit card is before applying. If you don’t have extra cash that can be put toward a credit card, you should consider keeping your student card. Some college cards also offer high discounts at particular stores, so if you often use the benefits of your student card, switching credits cards may not be the best option.

Takeaways

In short, no, you should not cancel your college card after you graduate. Even if you are not a student anymore, you can still keep taking advantage of the perks of no annual credit card fees and certain high discounts. Especially if you have a tendency to overspend or want to raise your credit score, keeping your college card is the best idea.