Can I Apply for a Credit Card If I’m Unemployed?

Can I apply for a credit card unemployed
Can I apply for credit card with no job

Yes, you can apply for a credit card and get approved unemployed as long as you still have access to income. Here’s how to qualify for a credit card unemployed even without access to income.

In this article, we would be talking about how to get a credit card without a job, the best credit cards for unemployed applicants, and how to use a credit card wisely.

Your credit card application getting approved is dependent on some factors such as your income, credit history, and debt-to-income ratio. The debt-to-income ratio is your current debt payments as a percentage of your income.

Though you don’t need a job to apply for a credit card, you need to show that you can offset your bill. Without a good source of income, you could be at risk of missing payments and running up a high balance which can affect your credit score

The Credit Card Accountability Responsibility and Disclosure Act of 2009, requires that card issuers should consider an applicant’s ability to make payment before opening a new credit card account for them. This is why you’re being asked about your income when applying for a credit card.

Acceptable Income Sources for Credit Card Issuers

If you have no job and want to apply for a credit card, there are income sources you can list on your credit card application and get approved. We have made a list of other income sources you can get approved with.

  1. Unemployment Benefits
  2. Your spouse’s earnings.
  3. Investment returns.
  4. Retirement income
  5. Alimony or child support payments.
  6. Social Security payouts.
  7. Rental property proceeds.
  8. Trusts and inheritances.
  9. Allowances and gifts.
  10. Government benefits.
  11. Scholarships and grants.
  12. Earned income from self-employment.

No source of income? No problem, we got you covered. You still have other options to apply for a credit card without a job.

How to Get a Credit Card With No Job

  1. Apply for Secured Credit Card

Secured credit cards unlike regular credit card, requires that you make a refundable security deposit as collateral in case you don’t pay your debts. Your security deposit determines your credit limit. As your security deposit is usually equal to your credit limit.

Due to this deposit, it’s much easier to get approved for a secured card than a regular, unsecured credit card. The minimum deposit is decided by the card issuer.

Some issuers increase your credit limit over time if you make a larger deposit or show responsible credit use over time. Your deposit will be refunded when you close the account or upgrade to a regular credit card.

This can be a good way to increase your credit profile. So be sure the issuer reports your credit activity to the credit bureaus.

  1. Become An Authorized User

Another option to go for when applying for credit card unemployed is becoming an authorized user on someone’s credit card.

You can become an authorized user in a trusted family or friend credit account to access credit. You will be given your card that will be linked to their existing credit account. The main account holder is responsible for making payments.

You can work out an agreement on the spending limit and payment plan with the main cardholder. And ensure you stick to the plan as some card issuers report authorized users to credit bureaus. This means your account activity can affect you both credit score positively or negatively.

  1. Lookout For A Co-signer

Another option when applying for a credit card unemployed is to recruit a cosigner.

A co-signer is just like a guarantor when you apply for a loan or mortgage. A co-signer is one, a friend or family member who agrees to make payment when you can’t. Though it’s rare but some card issuers allow a co-signer.

It’s a big favor asking one to be your co-signer. Because there’s risk associated to be a co-signer.

You’re ultimately responsible for making payments and missing those payments can have negative impact on your credit score. But if you fail to make payments to the account, the responsibility falls on the co-signer.

Generally a co-signer doesn’t have access to your account. But account activity may be listed on co-signers account which can affect their credit score. So before going this part, you would consider reaching an agreement with your co-signer on how you plan to make payment.

Best Credit Cards for Unemployed Applicants

Here’s a list of credit cards you might want to consider first as you’re unemployed and hoping for approval:

  1. A credit card with a 0% introductory APR:

Lots of card issuers offer 12 to 18 months of interest-free swiping. But you’ll probably need at least good credit to qualify (typically FICO scores of 690 or higher). Always remember that you still need to make at least the minimum monthly payment.

True 0% APR offers, by the way, are different from deferred interest offers, in which retroactive interest is charged if you don’t pay off the balance before your 0% rate expires.

  1. Rewards credit cards. A rewards credit card can be right when you have an super credit score rating and could keep the balance at $0. You can earn miles, points, or cash back rewards as you spend, and plenty cards offer generous sign-up bonuses.
  2. Credit card with low ongoing interest rate:

If you have an average credit (FICO scores of at least 630) — or you have good credit but it will take you longer than the typical 0% APR period to pay off your debt — a card with a low interest rate all the time might be a good option.

“Low interest” credit cards are still costly when compared to other forms of credit, but they could help you save money compared with a traditional high-interest card.

How To Use A Credit Card Wisely When Unemployed

Being employed doesn’t stop you from getting a credit card. But its important that you modify the way you spend with you credit card. Here’s how you can spend wisely:

Budget properly: First of all you have know how much you can spend from your card monthly. Do not charge more than you can repay in that account. You can set a charging limit.

Set Monthly Alert: You should consider this if you’re the type that forgets easily so you can pay up on time. Or rather

Enroll In Autopay: You can have your credit card billed automatically and never have to worry about the due date.

Prepare for the rate hike and pay at least the minimum due on a 0% APR card: Treat this  credit card extra carefully since the clock starts ticking on the 0% APR as soon as you activate the account. Endeavour to pay on time and do not pay less than the minimum or you risk losing the 0% APR. And try to pay off the balance before the interest rate goes up.

Conclusion

Unemployment is not a barrier to getting a credit as it is not a requirement by card issuers. As long as you’ve good credit score and a source of income that can pay the bills.  But the bottom line is whether you are unemployed or have a job, use your card wisely.

Do not charge more than you can avoid. And aim to pay your balance in full every month to avoid interest. Try to pay off your balance as soon as you can to keep a good credit score.

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