His career began with Manchester City where he featured largely as understudy during a downturn in the clubs fortunes. His full debut came in May 1990, deputising for the suspended Tony Coton in a Manchester derby at Old Trafford, and retained his place for the following match against Sunderland. In the next two seasons he made four appearances, but did not make a single first team appearance in the two seasons after. His next first team appearance was an unusual one. In a League Cup match against Wycombe, Manchester City had used both outfield substitutes when Richard Edghill sustained an injury and could not continue. Margetson, the only remaining substitute, was introduced as a striker for the final few minutes of the match.
Unfortunately, despite performing well in the run-in to the club's relegation battle to the 3rd-tier of English football in 1998, he was guilty of picking up a back pass to concede a free-kick inside the penalty area against Queens Park Rangers. He proceeded to hand the ball to opposing forward, Mike Sheron, who then quickly took the free kick, passing to a team-mate who stroked the ball into an unguarded net. This goal proved the difference between the two teams at the end of the season and City were relegated in QPR's stead.
He joined Cardiff City in August 2002 on a free transfer from Huddersfield Town, spending three years at the club mainly as back-up to Neil Alexander. Other previous clubs include Southend United, Luton Town, Bolton Wanderers, Bristol Rovers and Manchester City.
In June 2007 he fully retired after spending one year as a player-coach at Cardiff City and took over as the team's full-time goalkeeping coach.