Credit cards

Best Credit Cards For Low Income

How Does Your Income Affect Credit Card Applications?

When you apply for a credit card, your income is a factor that the card issuer uses to decide if they will approve you. Low income won’t necessarily prevent you from getting a card – it’s just something the card issuer takes into account when assessing your creditworthiness.

Credit card companies are required by law to ask applicants for their income when making applications. To approve an applicant, the credit card issuer must believe that this person can afford the monthly payments. Because of this, if you have low income and have significant debt, it will be more difficult to get a new credit card, let alone the best credit card.

If your application is approved, the credit card issuer will also use your income to set a credit limit for your card. Your credit limit is the maximum amount you can spend with the card. Low-income consumers generally receive lower credit limits.

LEARN MORE: How your income affects credit card applications

Is there a minimum income to get a credit card?

There is no minimum income required by law to obtain a credit card. It normally takes an annual income of at least $ 5,000 to $ 10,000 to be approved for most cards, but this is not a rule.

Credit card companies may have their own requirements depending on their policies and the specific card. In general, the best credit cards with more features will require a higher income than basic credit cards without all the bells and whistles.

What can you include as income on a credit card application?

You can include your personal income and income from other sources on a credit card application. What exactly you can include depends on your age, as there are different rules for applicants under 21 and applicants 21 or older. Those who are 21 or older may include the following:

  • Income from employment, self-employment or other self-employed activities
  • The income of a spouse or partner
  • Social Security
  • Pension fund distributions
  • Trust fund distributions
  • Scholarships and grants

If you’re under 21, the types of income you can include are more limited. In this case, you can include personal income from work, scholarships, grants, and any allowances you receive. This gives students without a traditional job other means to qualify for a student credit card.

LEARN MORE: How to find a credit card for students with no income

Can I get a credit card if I am unemployed?

Yes, you can get a credit card if you are unemployed, but you will need some form of income or a co-signer. Keep in mind that unemployment benefits count as income for credit card applications. If you get unemployment benefit, you can include it in your income when you apply for a new credit card.

LEARN MORE: Can I get a credit card if I am unemployed?

What to look for in a low income credit card

If you are looking for low income credit cards, you might want to look for a few different features.

No annual fee: When you are on a tight budget, it helps keep additional costs to a minimum. It is not difficult at all with credit cards, as there are many cards with no annual fee. They can still offer many valuable benefits, especially no annual fee card aimed at consumers with a “good credit” rating.

LEARN MORE: Best No Annual Fee Credit Cards

Rewards: Rewards are a bonus that you get from your credit card every time you make a purchase. There are different types of rewards available, including cash rewards, points you can use for travel, and airline miles. Cash back is a great choice for a low income card because it’s like getting a small discount on every purchase.

LEARN MORE: Best Cash Back Credit Cards

Lenient approval requirements: If you’ve never used a credit card before, or have had trouble with credit cards in the past, your credit score may not be high. In this case, it is important to find a credit card that you can qualify for. Look for cards that you can get with a limited credit history or cards that are available to consumers with a credit score in the “bad credit” range.

SEE MORE : Best starter credit cards and best credit cards for bad credit

Low security deposit (for secured credit cards): Secured credit cards require a refundable security deposit from the cardholder. The deposit provides some protection if the cardholder does not pay their credit card bill and allows the card issuer to be more lenient to applicants it approves. You can often find secured and unsecured credit cards when your credit score is low, but secured cards are popular for replenishing credit or creating credit for the first time.

If you are looking for a secure card, be sure to check the minimum deposit amount. Some require deposits of $ 200 or more, but there are also secure cards with minimum deposits of less than $ 100. It’s a good choice when you don’t have too much money to spend on getting a credit card.

LEARN MORE: What is a secured credit card?

0% introductory APR: Credit cards with an introductory APR of 0% don’t charge you interest for an introductory period, such as 15 or 18 months. There are two types of 0% APR offers:

  • An introductory 0% APR on purchases, which you can use to make large purchases and pay them back over time
  • An introductory 0% APR on balance transfers, which allows you to transfer your credit card debt and pay it off without interest

LEARN MORE: A Complete Guide to Balance Transfers