Can you get a credit card if you're unemployed?
If you’re out of work and not earning you might think that you won’t be able to get a credit card. But that’s not always the case, as our guide explains
Key takeaways
If you’re unemployed, you can still get a credit card, although interest rates may be higher
Repayments may be challenging without regular income or savings, risking persistent debt
Some credit cards have minimum income requirements, which could affect your eligibility
Credit cards can be an effective money management tool and can sometimes still be an option for you if you’re unemployed.
Being unemployed or on low income doesn’t stop you from getting a credit card, however the very best deals may not be available to you.
It’s also important to think carefully about taking on debt if you are not working, as there could be risks if you get into financial difficulties and find yourself unable to make payments on what you've borrowed.
Can I get a credit card if I’m unemployed?
Although interest rates are likely to be comparatively high, there's a good chance you can still get a credit card if you’re unemployed.
That's because many credit card companies understand that unemployment is often temporary and that an individual’s financial circumstances can change.
According to MoneySuperMarket data from September 2024, just 14%
This is likely because credit card providers sometimes perceive unemployed people as a higher risk and won’t offer the best rates of interest, such as the headline rates you’ll see advertised.
Our data shows that the average representative APR for someone that is unemployed is 34.8%
There may also be a lower limit to the amount you can borrow on a card - known as your credit limit. This is to stop you from getting into unmanageable debt.
What are the most popular credit card types for the unemployed?
Based on MoneySuperMarket data from the past 3 months, credit builder credit cards are the most popular choice among unemployed individuals, with 54%
A credit builder credit card is a type of credit card that's designed to allow you to improve your credit score, and is easier to get if have a poor credit history or no credit history.
Card Type | Percentage of MoneySuperMarket enquiries |
|---|---|
Credit Builder | 54% |
Purchase | 21% |
Balance Transfer | 12% |
Balance Transfer and Purchase card | 9% |
Reward | 3% |
Travel Credit Card | 2% |
What credit cards can I get if I am unemployed with bad credit?
Being unemployed can make it harder to be approved for credit by many mainstream lenders. But there might still be ways to improve your credit score when you’re unemployed: ·
Credit builder cards
If you’re not looking to borrow that much money then a credit builder card could be a good option. Credit builder cards come with lower credit limits, so credit card holders won’t be able to borrow as much. The lower limit can work to your advantage when unemployed, as it might be easier for you to make the smaller repayments
Credit cards for bad credit
Credit cards for people with bad credit are available and are easier to get if you've got an impaired credit rating. But be mindful that so-called bad credit credit cards will typically feature smaller credit limits and higher rates of interest
Credit builder prepaid cards:
While they do not offer a credit facility, credit builder prepaid cards could help you improve your credit score. These cards work by being loaded with cash whenever you need to – so there is no ‘credit limit’ or credit facility. They charge a monthly fee and the card provider effectively ‘loans’ you a year’s worth of monthly fees, £5 per month, for example, which you pay off over 12 months. If you meet all the payments, your credit rating should improve.
With credit builder cards, the idea is you pay back your borrowing over 12 months through the monthly fee - by making your monthly payments in full and on time. The way the loan is structured means if you meet all the payments over the 12 months your credit rating should improve.
What are the pros and cons of getting a credit card when unemployed?
Advantages
Can be a useful budgeting tool if you are able to make the repayments
Gives cardholders access to credit they previously didn’t have
Can help build your credit score meaning borrowing is easier – and potentially cheaper – in the future
Provides financial protection on purchases
Disadvantages
Potentially less choice of credit cards available
Rates of interest could be higher than on standard cards, particularly if your credit score is low
Credit limits tend to be lower
Might be harder to make repayments if you don’t have a regular income or money saved – you could run the risk of getting into persistent debt
Personal Finance & Insurance Expert
Our expert says...
“If you’re unemployed, the first question shouldn’t be whether you can get a credit card, but whether you should get one.
"Credit cards can be a flexible way of handling our finances and this guide lays out many of the benefits, but don’t overlook the risks – if you can’t pay off what you owe, you’ll be in a deeper financial hole.
"If you're worried about money and it’s affecting your mental health, visit our Money Talks hub for guides and support.”
Compare credit cards with MoneySuperMarket
It’s quick and easy to compare credit builder cards with MoneySuperMarket.
Just provide a few details about yourself and your financial situation and we’ll search the market to find credit cards tailored to your needs.
You can compare offers by interest rate, rewards and your chances of being approved before making a final decision. We use a ‘soft search’ so looking for a new credit card won’t impact your credit score.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.
Frequently asked questions
Can I get a credit card if I am claiming benefits?
Being on benefits doesn't necessarily prevent you from getting a credit card, but it could reduce your chances of being accepted. What's more, some credit cards will have a minimum income requirement that could rule you out.
Even so, if you have a good credit record and can demonstrate that you can afford the repayments, you've got a better chance of being accepted.
That said, even if you are accepted it's important to note that you may not be offered the best APR and you’re likely to have a reduced borrowing limit.
Does being unemployed affect my credit score?
Your employment status doesn’t show on your credit report and in itself doesn’t affect your credit score. But problems might arise if you borrow beyond your means and then struggle to make repayments.
Late and missed payments quickly start to negatively affect your credit rating making it more difficult to be accepted for credit.
Can I get a credit card if I am self-employed?
If you work for yourself, you can get a credit card. A self-employed person might find it harder to get a credit card because their income may fluctuate.
Our guide on credit cards for the self-employed explains more.
Can I get a credit card if I have a low income?
If you're employed but on a low income it can be harder to be accepted for credit because lenders will likely perceive you as a higher-risk borrower.
For a lot of standard credit cards, lenders will enforce a minimum income of £7,000. But cards designed specifically for people on low incomes exist and are easier to be accepted for.
Be mindful that cards for people with lower incomes will typically feature lower credit limits and higher interest rates.
What are my alternatives to a credit card if I'm unemployed?
A credit card shouldn’t be seen as a long-term borrowing solution. But they can be a useful way of managing your spending on a month-by-month basis.
If you need to borrow money longer term, you could look at a personal, secured or guarantor loans. There are also providers who specialise in loans for those with bad credit.
Before you take out any credit be confident it is affordable and you have the means to pay it back. Otherwise, you could risk slipping further into debt. If you're worried about money and it’s effecting your mental health, visit our Money Talks hub for guides and support.
Author
Tim Heming
Personal Finance Expert
Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
Reviewer
Jonathan Leggett
Former Senior Content Editor
With over 15 years of experience in online content and journalism, Jonathan is a former MoneySuperMarket’s editor at large and works across our Broadband, Mobiles, Energy and Money channels. Along...
