Other forms of debt for those just starting out, like student loans and car payments will also help establish your credit profile, as long as the payments are made on time. Some alternatives to credit cards, like debit cards linked to a checking account, or prepaid cards, which act as a defense against overdrafts, can help build good habits, but right now neither contributes to a credit history.
Choosing the right — and right type of — card can make a difference. Grads who have never had a credit card before will likely need a secured credit card to start. Some secured cards, like Discover it Secured, which requires a cash deposit that then serves as the credit line, can be a good fit for those without a proven payment history, according to Jill Gonzalez, an analyst at credit card comparison site CardHub.
Then there is the partially secured card, like the Capital One Secured MasterCard, which lets you get a credit line in excess of your security deposit, depending on your credit standing and disposable income (with no annual fee).
To skip the secured card route, there are cards that require a co-signer. In that case, the parent, or co-signer, is responsible if the account isn't in good standing.
If you are considering graduate school and still have an email address with an ".edu" extension, you may be eligible for a student card, like BankAmericard Cash Rewards for Students, which offers an initial bonus and cash back on gas and groceries. These types of cards, however, may suddenly expire when you graduate or turn 25, and you could be automatically rolled into a new card with fees, fewer rewards or a higher interest rate, Gonzalez said.
If you have a full-time job and enough of a credit history to get a standard credit card, you may want to choose a card that offers cash back with no annual fees, like the Citi Double Cash Card.