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Graduate with financial honours

Graduate with financial honours

Category: Banking

Updated: 04/08/2010
First Published: 04/08/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

With the caps thrown and the gowns put away, many of the class of 2010 will not be immediately drawn to financial matters, but it pays to get you account in order.

Competition for graduate jobs is fierce, a situation that could well be compounded by cuts to the public sector.

Such a transition from full time study to the world of work is likely to throw up a great many challenges, but it is important that graduates prioritise tackling what is sometimes a hefty wedge of debt.

The temptation is always to stay with the provider that students banked with during their university days, but remaining loyal doesn't often pay.

In short, there is no reason not to look around for a better deal.

The most important element of a graduate account is normally the level of interest free overdraft that is on offer, as students usually use the facility with relish.

By finding an account offering the highest level of interest free borrowing, graduates can ensure that they do not have to pay more interest than is necessary at a time when every penny counts.

For those who have built up decent sized deficits, the Barclays Bank Graduate additions account should be considered, as it offers £1,000 interest free overdraft in the year after graduation, although a £7 a month fee is payable.

Santander also have a couple of accounts that should earn a distinction with graduates.

It is also well worth looking into whether an account charges a competitive rate on any additional borrowing, as graduates will sometimes have accumulated more debt than is covered by an interest free limit.

When considering which account would suit your particular needs, Michelle Slade, spokesperson for Moneyfacts.co.uk, offers this advice:

"Graduates shouldn't bury their heads in the sand over their debt. By working out exactly how much they owe, they can set themselves a monthly budget and decide how much they can afford to repay.

"As with any debt, paying off those charging the highest rates of interest first is key.

"Credit card debt is typically the most expensive and should be repaid first, while the interest payable on a student loan is much lower.

"Graduates are key targets for banks, as many will go on to well paid jobs and will likely buy other financial products such as mortgages from them in future.

"Most banks offer specialist advice services for graduates, which will offer invaluable advice for anyone struggling with student debt."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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