Rewards credit card tips for first-time job seekers
The right card can help you save on networking and job interview expenses
Making complex credit topics simple
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Got your degree? Check.
Now it’s time to move on to the next challenge: landing your first job.
Your to-do list might include polishing your resume and practicing your negotiation skills, but there’s another important step you don’t want to skip. Opening a credit card could help you get your new career started on the right foot.
Adam Vega, a certified financial planner with United Capital in Fort Lauderdale, Florida, works with emerging professionals who are entering the workforce for the first time. He says credit is one of the most important topics of discussion.
“I like to refer to credit as flexibility,” says Vega. “It’s the flexibility to access money when needed.”
He says that for new grads, one of the biggest challenges to building credit is a shorter credit history. Vega suggests applying for credit sooner rather than later, which “allows a person to begin building their credit history as early as possible.”
Using a credit card responsibly can put you on the fast track to a great credit score. But that’s not the only reason to get a credit card after graduation.
Here’s how a rewards credit card can come in handy as you navigate your job search.
How rewards cards can help recent grads land a first job
- Get interview-ready without going broke. Choose a card that offers the most rewards when shopping for clothes, shoes and accessories.
- Make interview travel, networking budget-friendly. Start earning miles and loyalty program points while looking for your first job.
- Cover living expenses while on an internship or in graduate school. Avoid overspending by setting a budget and sticking to it.
Get interview-ready without going broke
Heading to a job interview for the first time can be nerve-wracking. One of the biggest challenges if you’re still living on a broke college student’s budget is putting together a professional-looking wardrobe.
A rewards card can help offset some of the cost if you’re earning cash back on what you spend. The key is to choose a card that offers the most rewards when shopping for clothes, shoes and accessories.
- The Blue Cash Everyday® Card from American Express, for instance, offers 2 percent cash back at select U.S. department stores, with no spending cap. There’s also an introductory bonus of $150 in statement credit when you spend $1,000 in the first three months.
- You could potentially earn a higher rewards rate on interview shopping by choosing a card with a quarterly bonus.
- The Discover it® Cash Back card and the Chase Freedom card both offer 5 percent cash back on selected bonus categories each quarter, up to the spending limit of $1,500 in purchases combined – remember to opt in or sign up for the bonus category each quarter.
Tip: Remember to get the full rundown on a rewards card’s details before opening an account. Specifically, check the annual fee and the APR on purchases, says Ryan Skidmore, marketing specialist at Lift Credit. “If you decide to go with a card with a rewards program, make sure you aren’t paying more for the card than what you get in return,” he says.
Consider all options for scoring rewards – but beware of interest rates
But what if your credit score isn’t high enough yet to qualify for a traditional rewards card?
“People with a low credit score can often still get a store card because banks are more likely to approve users who apply through the store,” says Julie Pukas, head of U.S. bankcard and merchant services at TD Bank. “The catch is that the interest rates are very high” and the credit limits low, so focus on getting a regular rewards card first if you can qualify for one.
Remember to stack rewards whenever possible for additional savings on interview gear. If you’re new to the rewards game, that simply means taking advantage of opportunities to earn discounts or increase your rewards earnings on purchases.
There are several ways to maximize rewards with your credit card, including:
- Shopping through your card’s online shopping portal to earn bonus rewards on purchases.
- Using your rewards card to shop through cash back websites, such as Ebates and Ibotta.
- Taking advantage of card-linked offers, special deals you can scoop up when you shop specific retailers.
- Applying promo codes or coupon codes when you check out online.
- Enabling a cash back browser extension to earn rewards automatically when you shop online.
- Enrolling in retail loyalty programs that allow you to earn coupons or other rewards.
Just don’t let the possibility of saving money – or your hope of landing a high-paying job – tempt you to overspend when prepping for interviews.
Rewards cards make interview travel, networking budget-friendly
If you’re casting a wide net with your job search, the interview circuit may take you across the state or even across the country.
Traveling to job fairs, networking events or conferences and conventions may also be on the agenda as you connect with headhunters and prospective employers.
All of that can add up, but you can bring the cost down with a travel rewards card.
“Travel cards are great for the consumer who spends a lot of time in the air,” says Jerel Butler, a financial planner with Millennial Financial Solutions.
If you’re a recent grad, a travel rewards cards with no annual fee likely makes the most sense.
- The Capital One VentureOne Rewards Credit Card offers 1.25 miles on every purchase, with no annual fee. This choice also gives you a travel bonus in the form of 10 miles per dollar on hotel stays booked and paid through Hotels.com/venture.
- You could easily build up a reserve of miles toward free flights or hotel stays if you’re traveling for interviews or other professional events regularly.
Besides flights and hotel stays, your rewards card could also help you save on meals when traveling.
- The Capital One Savor Cash Rewards card offers 4 percent back on dining and entertainment.
- The Uber Visa card may be an even better choice, earning 4 points per dollar on restaurants, including UberEATS, and 3 points per dollar on airfare and hotels.
- Points are redeemable for cash back or Uber credits, which is a plus if you need to get around while you’re away from home.
The stacking rule can also be applied to both travel and dining rewards.
For instance, you can stack travel rewards by enrolling in airline and hotel loyalty programs and multiply dining rewards by enrolling in restaurant loyalty or discount programs.
Charge for rewards – but keep utilization in check
Pay attention to how much you’re charging if you’re taking some pricier trips. Don’t use more than 30 percent of your available credit limit if possible, says Pukas, since “the lower your utilization rate, the better your credit score will be.”
The same goes for transferring rewards earned with your credit card to an airline frequent flyer program or hotel loyalty program.
See related: First card dilemma: Student card vs. secured card
Use card rewards to cover living expenses for an internship or grad school
Maybe getting your first job isn’t on your radar just yet. Instead of heading into the workforce, you’re completing an internship or planning a stint in grad school.
A rewards credit card still has value in those scenarios, but there are a few rules to keep in mind.
“It’s imperative for new grads and grad students to set a budget for spending on credit cards,” says Michael Gerstman, CEO of Gerstman Financial Group in Dallas. That’s especially important if student loan payments will eventually be part of your financial picture.
“All too often, grad students leave school with mounds of student debt,” says Gerstman. “The last thing they need is credit card debt that’s accruing potentially 20 percent or more per year in interest charges.”
Butler says interns and grad students should first get a grip on what their baseline monthly recurring expenses will be, such as rent, utilities and food. That can give you a framework for spending with credit.
“Credit cards can be helpful for grad students only if they’re used on expenses that would otherwise happen regardless, such as utilities,” she says. “Otherwise, you can enter a slippery slope because of the lack of disposable income.”
If you’re living on a super-tight budget and your first real job is still several months or even years away, Butler says to “avoid carrying around credit cards for leisure activities, such as going out to bars or restaurants, as those charges can quickly add up.”
Vega says a good way to build discipline as a new grad or grad student when using credit is to charge all your fixed expenses to your rewards card, then set up an automatic payment to the card from your checking account each month.
“This is a great way to earn rewards without going into a scary amount of debt to do so, all while building credit,” he says.
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