Can I get a credit card if I'm unemployed?
Key takeaways
If you’re unemployed, you may be able to get a credit card, although interest rates could be higher.
Repayments may be challenging without regular income or savings, risking spiralling or 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?
You may still be able to get a credit card if you’re unemployed, although you could have fewer cards to choose from and may be offered a higher interest rate.
Lenders look at a range of factors when deciding whether to offer you credit, including your income, existing commitments, credit history and whether they think you can afford the repayments.
According to MoneySuperMarket data, just 10%
Our data also shows that the average representative APR for someone who is unemployed is 36.2%
You could also be offered a lower credit limit. This can reduce how much you’re able to borrow and help limit the risk of taking on unaffordable debt.
Should I get a credit card while unemployed?
A credit card can be a useful financial tool but if you’re not able to afford the repayments comfortably, it can quickly push you into unmanageable debt.
Being out of work shouldn’t be a reason for you not to get a credit card, and they can be used for manageable short-term spending. But if you’re using credit to cover essential outgoings, to cover your income, or for long-term use, this generally isn’t recommended.
If you’re not able to make the monthly payments it can lead to extra charges, rising debt levels and harm to your credit score too.
Before you start to look at credit cards, consider the following:
Do I have income, benefits or savings to cover repayments?
Can I clear the balance in full?
Would a lower credit limit help me manage spending?
Am I already missing payments elsewhere, such as on household bills?
If you use a free credit card eligibility tool, this can show you what cards you may be eligible for, without having any impact on your credit score.
What are the most popular credit card types for the unemployed?
Based on MoneySuperMarket data,credit builder credit cards are the most popular choice among unemployed individuals, with 50%
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 you have a poor credit history or no credit history.
Card Type | Percentage of MoneySuperMarket enquiries |
|---|---|
Credit Builder | 50% |
Purchase | 21% |
Balance Transfer | 14% |
Balance Transfer and Purchase card | 10% |
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 options including the following:
Credit builder cards
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 usually easier to get if you've got a poor credit rating. But be mindful that so-called bad credit credit cards will typically have smaller credit limits and higher rates of interest
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?
Having a low income doesn’t automatically prevent you from getting a credit card, but it can affect which cards you’re eligible for and how much a lender is prepared to let you borrow.
Some credit cards have a minimum income requirement, while lenders will also consider factors such as your existing debts, regular outgoings and credit history.
If you are accepted, you may be offered a lower credit limit or a higher interest rate. Using an eligibility checker before applying can help you see which cards you’re more likely to qualify for without affecting your credit score.
What are my alternatives to a credit card if I'm unemployed?
If you need money for everyday essentials or household bills, taking on more credit may not be the best first option.
Before borrowing, check whether you’re getting all the benefits and financial support you’re entitled to and look at whether there are ways to reduce your regular outgoings. If you’re struggling with existing bills or repayments, free debt advice can also help you understand your options.
If you receive certain benefits and need help with an essential one-off cost, you may be eligible for an interest-free Budgeting Advance or Budgeting Loan from the government.
If borrowing is still appropriate, compare the different options available and look carefully at the interest rate, fees, total amount repayable and whether you can comfortably afford the repayments.
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
Victoria Russell
General Manager - Commercial
Vikki has worked across financial services for over 20 years, and for the last 15 years, created and nurtured a career within MoneySuperMarket Group, leading to her current role as General Manager...
