Getting a credit card without a job is a hard nut to crack but not impossible.
One of the many questions regarding credit cards involve whether you can get a credit card without income. The answer is, yes you can. However, there’s a few caveats. Being employed is not a technical necessity but it plays an important role in your credit analysis and can be a significant factor in your credit card application approval.
Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, credit card issuers are required to give weight to the consideration of whether an applicant has the means and resources to be able to pay their credit debt. One of the ways to gauge that is to see if you’re employed or not. So you’d have to disclose your accessible income in your credit card application.
Although creditors usually don’t demand evidence for your income claim, it cannot be entirely ruled out and they may require you to submit documents relating to tax returns among others to verify your accessible income. Besides, creditors also reportedly use income estimation algorithms to test your income claims. Even if your credit card application is approved, your credit limit would critically depend on how much you earn besides your credit history.
When it is relatively simple for an unemployed applicant to get authorized for credit card is if they can demonstrate evidence of unemployment benefits or of a bank account where they get regular deposits from legal sources. Another way it’s easier to get a credit card is if you have reasonable income from social security. However, this condition is mostly fulfilled by older people who are retired from their jobs and living off on their 401K accounts and social security.
All in all, this leads to people thinking you need a job to get a credit card. But what credit analysts really assess is not employment per se, but the applicant’s ability to pay off credit card debt. It just so happens that employment is the most obvious metric for this. So, are there ways to credit cards for the unemployed? Well, turns out, there are and we’ve discussed them below.
3 Ways to Get a Credit Card without Employment
1- Get a Co-signer
If you’re unemployed, you can apply for a credit card with a cosigner who has a good credit score of their own to take legal responsibility for your credit risk. However, most credit card companies do not permit cosigning. So, you’d be limited in your options. So far, only Bank of America Corporation (NYSE:BAC) and US Bancorp (NYSE:USB) allow co-signing options for credit card issuance. A person without a job or income is most likely to get a credit card by getting a co-signer with good credit health and credit score.
If you’re unable to pay your credit card debt after getting the card, the cosigner has to assume the liability and pay your debt within the designated time. If they don’t, then the holder as well as the co-signer risk getting both their accounts’ shut and their debt sold to a collection agency which is likely to recover this debt through legal action. These actions involve getting court orders for garnishment of your wage or a levy on your bank account to recover the debt. Not to mention that garnishment looks terrible on a credit report.
2- Authorized Usership
You can bypass getting a credit card for yourself altogether and opt instead for authorization to use someone else’s credit card based on their consent. This person could be your spouse or one of your parents or a friend. The legal liability of the debt falls on the official holder of the card. You can obviously contribute to their credit bill payments but are not legally bound to do so.
3- Secured Credit Card
Secured Credit Card refers to a kind of credit card which you can acquire by depositing a small amount of security as collateral and then acquiring the credit card with a small credit limit. The credit limit is small enough to keep your credit card expenses in control and within range of what you can reasonably pay which is reflected in your deposited security. Your issuer will likely steadily move you to an unsecured credit card once you’re able to consistently pay your credit debt. The security is returned to you if or when you decide to close your secured account.
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