You may have heard that because of the Credit Card Act of 2009, you need a job and an annual income to qualify for a credit card. Actually, this isn’t always the case: “Income” means more than just a salary, so you might be better off than you think. And if that doesn’t work, you do have options for getting a credit card. We’ll break down a couple different scenarios where you can qualify without earning a salary, and give some alternatives if you don’t meet the income requirements.
You can still qualify for a credit card if …
You have a reasonable say in household finances, even if you’re not the one drawing the paycheck.
The Credit CARD Act prohibited applicants from listing their household income on a credit card application, a move intended to stop college kids from listing their parents’ income even when the parents didn’t cosign the application. One unfortunate side effect was that stay-at-home spouses found it difficult to qualify for credit. But a tweak in the law now allows you to list the household income if you’re one of the people in charge – for example, if your spouse works and you don’t, but you’re the one who controls the checkbook. In that case, you may list your spouse’s salary as your own.
You receive income from other sources.
Most lenders allow you to include receiving Social Security, child support, disability or alimony payments. Those types of payments don’t have to be reported, but you can include them on your application if they’ll help (unless the lender specifically says otherwise).
You’re living off substantial savings.
If you’ve made your money and are living comfortably off your existing savings, you may be able to list that as a source of income. However, you should be prepared to back up your claims with bank account statements just in case the bank asks to verify your savings.
Keep in mind that even if you can show non-job income, approval of your application still depends on you having a good enough credit score to qualify.
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Finding a cosigner or becoming an authorized user.
One alternative to applying for a credit card on your own is to find someone who meets the income requirements and ask them to cosign the application with you. The other person will be legally liable for the debt (as will you), but you’ll be able to leverage their income in qualifying for a credit card. Alternatively, he or she can apply for the card separately, and add you as an authorized user (here’s the difference), so you can still use the card.
Applying for a secured credit card.
Secured credit cards require you to make an upfront deposit (usually equal to your line of credit) that is returned when you close the account. You don’t use that money to pay off your balance; rather, the bank holds it as collateral in case you default on your payments. Since secured credit cards are lower-risk for the issuer, their eligibility and income requirements may be more flexible. Still, if you have no demonstrable income at all, you could be declined. In such cases, your best bet for plastic may be a prepaid debit card.
You might wonder why you should bother with a secured credit card if you have to pony up the money to begin with. Well, using a credit card can be safer than using debit or cash, and it’s also helpful for building your credit score. It may not earn you super-stellar rewards, but it’s not without value, either. If a secured card is your only option for credit, don’t count it out right away.
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