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Which Credit Card Offers Should Low-Income Earners Consider?

Jan. 5, 2015
Credit Card Basics, Credit Cards
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If your annual income is on the lower end, you might have difficulty qualifying for credit cards. But even if you’re making $25,000 or less per year, you can still get some decent offers. We’ll help you decide which is the best option for you, and how you can get a credit card even if you have a low income.

Earning at least $15,000 a year? Consider these cards

Chase Freedom®

If you’re earning between $15,000 and $25,000 a year, you might want to consider the Chase Freedom®. It’s great for recent college graduates and adults alike — it has an annual fee of $0, and offers 5% cash back on rotating bonus categories on up to $1,500 spent per quarter, and 1% back on everything else.

Discover it® Cash Back

The Discover it® Cash Back has a similar structure to the Chase Freedom® — an annual fee of $0, 5% cash back on bonus categories that you activate, up to a quarterly limit of $1,500 in spending, and 1% cash back elsewhere. It goes even further in the no-fee category: It doesn’t charge foreign transaction fees, and your first late payment fee is waived.

Minimum income: Discover requires an income of at least $15,000 ($2,000 if you’re a student).

Consider getting a co-signer

If your income doesn’t top the $15,000 mark, think about getting a co-signer who meets the income requirements who can apply with you. That way, you’ll be able to include his or her income on the application. Of course, you should find a cosigner you trust. You’ll both be on the hook for the debts that either of you could incur on the account.

Secured credit cards

One class of credit cards doesn’t have such strict income requirements: secured credit cards. These are basically zero risk for the issuer: You make an upfront deposit (which usually determines your credit limit), use the card and pay off your balance like you would with a normal credit card. You get your deposit back when you close the account. This way, if you ever default, the bank can just take what you owe out of your deposit. Check out our best secured credit cards to learn more.

What can I do to polish my application?

Even if you meet the income requirements, banks will consider your credit score and other financial health factors when reviewing your application. For example, they’ll look at your debt-to-income ratio, which is how much you owe vs. how much you earn. They’ll also take into account other monthly obligations like student loan payments, as well as your employment status. If you can pay off some of your debt before you apply, you should do so — particularly if you already have credit card debt.

Finally, remember to report all sources of income, including alimony or child support. Your lender may ask you whether your income comes from employment or another source, but you don’t have to answer if you don’t want to.

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