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Cash, credit or loan: How to pay for a new professional wardrobe after college

New grads face a slew of expenses they have to cover after they get their diploma. How should they pay for it all?

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We earn a commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

Unsure whether to dip into your savings or swipe your credit card to cover your next major purchase? Email reporter Megan DeMatteo at megan.dematteo@nbcuni.com to share your upcoming purchase and question to be part of Select's new "Cash, credit or loan?" series.

The old adage "it takes money to make money" certainly seems to apply as soon as you start looking for your first job after college. Even in the age of Zoom interviews, there's pressure to have just the right outfit to impress your future employer.

And then there's a question of what you wear once you land the job. Putting together a work wardrobe might not be top of mind as many of us have spent the past year in soft pants. But for graduates who plan to work in an environment with long-standing dress codes and etiquette (think a bank, hospital or corporate environment), your clothes can matter.

All this shopping can quickly drain your resources, and it can be tough to know the smartest way to pay for a work wardrobe. Ahead, Select spoke to three financial planners who've been there. Each has their own advice for new grads who want to put their best-dressed professional foot forward and confidently pursue a new job on a limited budget.

Mark Reyes, CFP

Los Angeles
Cash, credit or loan? Cash

Albert financial planner Mark Reyes is no stranger to wearing a suit and tie. His first job out of college came with a business professional dress code.

"The senior partners were like, 'You've got to go to my suit guy,'" Reyes tells Select. And when he did, Reyes quickly learned that even with the word-of-mouth discount from his managers, the average three-piece suit still cost around $1,000.

"I was like, 'Oh my gosh,'" Reyes recalls.

His advice? Bargain shop. Doing so helped him find a number of professional-looking suits in the $100 price range. When you don't have a lot of extra cash, start out by buying one or two affordable items and slowly build up a better wardrobe.

"I found suits on sale at Macy's and online retailers," Reyes says. "Having a work wardrobe is very important because it can boost your confidence and reflects who you are externally to the world. The better you feel about yourself, the better you'll be at your job."

And this even applies to those working from home: Dressing up for Zoom calls helps break up the day and establish a rhythm of patterns, says Reyes.

When possible, use cash to buy any items you need for your first job. Using cash helps you stay within your budget and protects your credit score when you're just getting on your feet. Every time you open a credit card to make a purchase, whether a store card or a normal one, the hard inquiry results in a small ding to your score. And even if you already have a credit card, knowing you can spend up to a certain credit limit might encourage spending beyond your means, argues Reyes.

"So I typically don't recommend credit cards and recommend instead just saving up for [major purchases]," he says.

Michaela McDonald, CFP

New York
Cash, credit or loan? Cash or credit

Bargain shopping is also the number-one piece of advice from Albert financial planner Michaela McDonald. But she has an added suggestion.

"With your first paycheck buy a totally bomb outfit," she says. "Spend a couple hundred dollars if you have it. It's OK to spend a little more than you normally would on this outfit."

That way, when you really need to feel powerful, say for an important meeting or quarterly review, you'll have this nice outfit that you can put on and know that you look your best.

"I love TJ Maxx, Marshall's, you name it," says McDonald. "Look to see what the professional dress trends are right now and see if you can bargain shop for outfits that are similar. At the end of the day, no one is really looking at you as much as you're looking at yourself, right?"

Last, it's OK to use a credit card if you have to, says McDonald: "If you're in a situation where you know your income stream is going to be solid because you have this new salary job, don't be afraid to charge on your credit card just a little bit."

Keep your spending to under 10% or 20% of your total credit limit, McDonald advises. And once you start receiving regular paychecks, set aside enough money every pay day to bring your credit card balance back down. The longer your balance sits unpaid, the more money you pay in interest charges over time.

Alicia R. Hudnett Reiss, CFP

Washington, D.C.
Cash, credit or personal loan? Cash, then credit card

If you can affordably save cash to pay for the cost of your new wardrobe, use cash first, Business of Your Life founder Alicia R. Hudnett Reiss advises.

But if you need to put something on a credit card, it's OK since money will be coming in with your first paycheck.

Just make sure you're mindful of your spending. Hudnett Reiss suggests limiting purchases to between $100 to $500, depending on your salary. And make sure you only buy things you need.

Focus on picking out a few basics, such as shoes, tops/blouses and pants/skirts. Then, take a breather and adjust to your new budget before gradually adding additional items to your closet.

No credit card? How to start building credit after college

Recent grads who have a very short credit history (or none at all) may not be able to finance their new professional wardrobe with a credit card just yet.

In that case, a first step to building credit is to open a secured credit card after graduation. With an upfront security deposit (usually $200), cardholders can access a small credit limit (usually the amount of the security deposit) and start getting in the habit of making regular purchases with your card and paying your bill on time and in full each month. It's a good way to pace your shopping while also getting into a good money routine.

The deposit acts as a form of collateral in case you don't pay your bill. Once you establish a history of regular on-time payments, you'll likely qualify for better rewards cards (with no deposit needed), and/or a bigger credit limit.

Here are three of Select's top-rated credit card picks for recent college grads:

  1. Best card for no credit: Petal® 2 "Cash Back, No Fees" Visa® Credit Card
  2. Best card for bad credit: Capital One Platinum Secured Credit Card
  3. Best card for fair and average credit: Capital One QuicksilverOne Cash Rewards Credit Card

Petal® 2 "Cash Back, No Fees" Visa® Credit Card

On Petal's secure site
  • Rewards

    1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments; 2% to 10% cash back at select merchants

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    None

  • Regular APR

    13.24% - 27.24% variable

  • Balance transfer fee

    N/A

  • Foreign transaction fee

    None

  • Credit needed

    Fair, Good, No Credit

Terms apply.

Capital One Platinum Secured Credit Card

Information about the Capital One Platinum Secured Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the cards prior to publication.
  • Rewards

    None

  • Welcome bonus

    No current offer

  • Annual fee

    $0

  • Intro APR

    N/A for purchases and balance transfers

  • Regular APR

    26.99% variable

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    No credit history

Terms apply.

Capital One QuicksilverOne Cash Rewards Credit Card

Information about the Capital One QuicksilverOne Cash Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards

    Unlimited 1.5% cash back on every purchase

  • Welcome bonus

    None

  • Annual fee

    $39

  • Intro APR

    None

  • Regular APR

    26.99% variable

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    Good/Fair

Terms apply.

Petal 2 Visa Credit Card issued by WebBank, Member FDIC.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.