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Credit cards for the unemployed

Getting a credit card with low or no income

 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

By Tim Heming

Published: 14 June 2021

Person using a credit card

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Can I get a credit card with limited income and bad credit?

It’s still possible to get a credit card if you are unemployed and on a limited income – and even if you have a low credit rating.  

Lenders realise that unemployment is often temporary and that an individual’s financial circumstances are likely to change. But you probably won’t be able to get the best interest rates, such as the headline rates you’ll see advertised. There may also be a lower limit to the amount you can borrow on a card. 

Should I get a low-income credit card? 

This depends on how much you need a credit card. 

If it’s to help build your credit score because you’ve struggled with debt in the past or you haven’t built up a credit history, then a low-income credit card could be a good idea. 

Credit cards can help you be more flexible with your purchases and offer more financial protection on the goods and services you buy. But they only work well and don’t become costly if you can pay off the balance in full every month. Unless you can do this, the interest can start to build up and you could slip further into debt. 

Pros 

  • Give you access to credit you previously didn’t have

  • Can help build your credit score meaning borrowing is easier in the future 

  • Provide financial protection on purchases

Cons 

  • Less choice of credit cards available  

  • Interest rates tend to be higher than standard cards 

  • Credit limits tend to be lower

What are my alternatives to a credit card? 

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 personalsecured or guarantor loan. There are also providers who specialise in loans for those with bad credit

But before you take out any credit you should be confident you have the means to pay it back. Otherwise you could risk slipping further into debt.

Charities such as National DebtlineStepChange  and Citizens Advice offer free, impartial debt advice to anyone struggling with financial problems, helping them to get back on their feet. 

Can I get a credit card if I am claiming benefits?

Yes, but you may not be offered the best APR and you’re likely to have a reduced borrowing limit. 

Some credit cards will have a minimum income requirement, which could rule you out if you’re claiming benefits.

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.  

What factors determine my eligibility for a credit card?

Lenders take a number of things into consideration when deciding whether to give someone a credit card: 

  • Age: You’ll usually need to be over 18 to qualify for a credit card 

  • Income: Most credit card providers will require you to be earning at least £7,500 a year 

  • Financial history: If you’ve been bankrupt or have a County Court Judgment (CCJ), it reduces the chances of being accepted for a credit card

  • Credit score: Lenders use your credit score to work out how likely you are to meet your repayments 

Compare credit cards

It’s quick and easy to compare credit 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. 

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