Key takeaways
- You can get approved for a credit card even if you’re unemployed, although you need to list at least one eligible source of regular income on your application.
- This income doesn’t need to be money from a job, and can instead include your spouse’s income, unemployment benefits, alimony, child support payments and more.
- If you can’t get a traditional credit card right now, you can consider alternatives like becoming an authorized user on someone else’s card or applying for a secured credit card.
With economic uncertainty and major layoff announcements, consumers may experience periods of unemployment. While it’s important to be cautious about amassing large amounts of high-interest debt in periods of financial instability, a credit card can offer financial backup while you search for a new gig.
Fortunately, being unemployed doesn’t disqualify you from credit card approval. While credit card issuers ask for your income when you apply, you can list alternative forms of income on your application. You should also keep other options for building and maintaining credit in mind while unemployed, which may be safer or more attainable than a credit card.
Do you need a job to get a credit card?
You don’t need to have a job to get approved for a credit card, and that’s true whether you only plan to be unemployed for a short period of time or you haven’t worked for a decade or more. After all, various income options count for the purpose of applying for credit, and many don’t require traditional work at all.
What you do need to get a credit card is a stable, predictable income you can count on and prove if you need to. Some income sources that count on credit card applications don’t even need to be your own, provided you have access to them on a regular basis.
How to qualify for a credit card
When you apply for a credit card, credit issuers use a number of factors found in your credit reports to determine your creditworthiness. They will also ask for additional information, such as name, address and income, on your application.
In order to approve you for a credit card, issuers must assess whether the risk of issuing you credit aligns with their requirements. If you have a history of managing payments well and keeping accounts current, your credit score will reflect your creditworthiness. And your income helps issuers determine your debt-to-income ratio, which may predict your ability to make payments. This ratio will also help determine your credit limit upon approval.
What qualifies as income?
Your income does play a part in your credit application, but income is not just the paycheck you receive from a job. Income may be more loosely defined as any money you receive consistently.
This means there are other forms of income you can provide to help you qualify if you are currently unemployed. The 2009 Credit CARD Act allows anyone over the age of 21 to list any income to which they will have reasonable expectation of access, including income from their spouse or partner, funds accessed through a shared account and unemployment benefits. If you have investments, those returns may count towards your income. And if you receive Social Security payments, those can be included, as well.
Additional types of income that can be listed on your credit card application include:
- Side income earned through self-employment
- Investment or retirement income
- Public assistance, including SSDI and housing vouchers
- Regular insurance payments, including long-term disability and workers’ compensation payments
- Alimony and child support
- Certain types of financial aid for college
- Regular allowance you have consistent access to
Credit card options if you can’t qualify on your own
If you aren’t able to qualify for a credit card on your own, you still have options for accessing credit. Here are some other pathways to credit while unemployed.
Authorized user
Becoming an authorized user on someone’s credit card account can help you build your credit score, while accessing someone else’s line of credit. As an authorized user, you will have access to a credit card through the primary cardholder. Before you do this, take some time to learn how being an authorized user affects your credit.
While you’re not legally obligated to pay any balances on the credit card, you should have an agreement with the primary cardholder about how payments need to be made. You should make sure the primary cardholder is responsible for making payments on the account in full and on time. You won’t be legally obligated to pay, but missed payments could negatively affect your credit score.
Joint account holder
While some credit cards used to allow co-applicants in the past, the option to apply for a credit card with another person at the same time doesn’t really exist anymore. As an alternative, there are a slim number of joint credit cards that allow you to share one account with another person, such as your spouse.
The best example of a joint credit card available right now is the Apple Card Family Account. This account lets one person apply for the Apple Card*, after which they can add another co-owner to their account for the purpose of sharing one line of credit and building credit together.
The Apple Family Account can also include other family members who are set up as authorized users on the main account, although the total of people in one account is limited to six. This lets all users on the account, including adults and teens, share one credit limit and earn rewards together on all their purchases.
This being said, it’s also important to understand the obligations of joint accounts before applying for one. While both parties share the responsibility of making payments, both parties will also take the blow for any missed payments.
Secured credit cards
Secured credit cards can be easier to get than unsecured credit cards because they require a deposit, which acts as your credit limit. Your credit score and income may be less influential factors than they are for most cards. Instead, your ability to guarantee the required deposit is essential. If you do decide to go this route, look for a secured card with low fees and read the terms carefully. You should also ensure that your payments are reported to the credit bureaus so you can continue building credit.
Also note that some secured credit cards work with a connected savings account that is used to “secure” the line of credit consumers can use. Examples of this include the Chime® Credit Builder Secured Visa® Credit Card and the secured Self Visa® Credit Card.
The Chime Credit Builder Secured Visa is an attractive option since it requires no fees or interest and doesn’t require a credit check when you apply. It also doesn’t have a minimum security deposit, so you can tailor your card’s credit limit to the funds you have in the connected checking account.
The bottom line
Unemployment can present some financial uncertainty, but it doesn’t mean you can’t get a credit card and continue to build your credit. If your debt-to-income ratio and payment history are solid, and you can list alternative forms of income, you may be able to qualify for a new card and use it as a line of credit to hold you over.
If a new card isn’t possible, consider becoming an authorized user or building credit with a secured credit card. As long as you avoid taking on debts you can’t pay off, you can still reap the benefits of having a credit card — until that next job comes along, and you can qualify for better credit cards.
*Information about the Apple Card has been collected independently by Bankrate. The card details have not been reviewed or approved by the issuer.
The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your card for its issuing bank.
*No Interest: Out of network ATM withdrawal fees and over the counter advance fees may apply. View The Bancorp agreement or Stride agreement for details; see back of card for issuer. **No Minimum Security Deposit: Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.
-To apply for Credit Builder, you must have an active Chime® Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
*SpotMe is an optional service that provides fee-free overdraft if a member meets certain qualification criteria. Chime SpotMe enables members to draw their Chime Checking Account negative for debit card purchase transactions, ATM withdrawals, cash back transactions or “over the counter” or OTC withdrawals (“Qualifying Transactions”) up to a specified amount (the “Limit”). This Limit is determined by Chime in its sole discretion based on the history of any Chime-branded accounts you have, direct deposit history and direct deposit amounts, spending activity and other risk-based factors.
**Safer Credit Building – On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
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