Credit Card Guide
Follow Us  twitter facebook You Tube Google+
Credit Cards > Credit Card News > Ask Erica > Can I get a credit card if I'm unemployed?


Can I get a credit card if I'm unemployed?

December 10, 2013
Ask Erica
email print comment

QDear Erica,

What do you think my chances are of getting credit cards if I'm unemployed? Do I need regular income at the time of application when I apply for a card? I want to get another card just in case, so I have something to live on in case finding a job takes a while. But do you think I'd get rejected if I've been unemployed for about a month? I have some savings. – Yvonne

AHi Yvonne,

One of the basic requirements for credit card acceptance is income. It can be your own or what you bring in as a household. That can mean a job held by a spouse or any other working person. Certainly it makes sense that an issuer would expect that you, as a potential customer, have the means to repay anything you're able to borrow.Ask Erica

The other major factor that the issuers would examine is credit history. If you're applying for a card in your name only, they'd consider your credit history alone. However, if you're going in on an account with someone and will have joint ownership, the issuer will take that person's reports and scores into consideration as well.

So what are the odds of you getting a card with no means of economic support? If your credit rating is excellent, it's possible that an issuer will take a chance on you. I wouldn't bet on it, though. Credit card issuers want to lend money, but also reduce the risk of loss. Without a job, you may be perceived as too much of a risk. Then again, if you list the amount you may be receiving in unemployment benefits as “income,” that may be sufficient, at least for a small credit line.

Interestingly, you'd think that with so much at stake, credit card issuers would take pains to make sure that applicants really are earning as much as they say they are. But in general, they don't. You write down what you earn, and that is basically that. If this sounds like an honor system to you, that would be true, except that there are ramifications for fudging the numbers. For example, if you lie on the application and say that you earn twice what you actually do, and then default on the balance, the issuer can sue you. If they identify the fraudulent income in the proceedings, you could be in big legal trouble.

You may have a better chance at a secured credit card. You'd put down some cash as collateral, and that gives the issuer greater confidence in you. In the event you walk away from your debt, the issuer can claim the money you put in the savings account as security. Although income is also a deciding factor for secured cards, the requirements may be loose enough for the odds of acceptance to be in your favor. Some “hybrid” secured cards (the Capital One Secured MasterCard, for example) will even give you a credit limit that's a little higher than the amount you put down.

If you're trying to build up your credit, you might consider one of these cards. But if your credit is already good and you already have a regular card, a secured card won't offer many advantages — and you'd be better off keeping your savings for an emergency. Plus, secured cards generally come with annual fees, which could chip away at the money you do have as you ride out this bout of unemployment.

Before you start looking into secured cards (or any type of credit card), I'd like you to stop and think about what you'll really use the card for. Never live on your credit cards. Without a way to make the payments, you'll get yourself into a load of debt. Each charge will add to the balance, which will also be increasing due to the finance fees. Miss a payment (or two or three), and your interest rate could soar, causing the fees to further mount.

Instead of relying on plastic to help you though the hard times, do everything possible to make ends meet on your own. Take any job you can find to bridge the gap, and refine your resume on off hours. Pare your expenses down to essential food, housing and transportation costs.

Credit cards are wonderful, but they will never take the place of a job, even on a temporary basis.

Got a question for Erica? Send her an email.




How to make the most of a new travel rewards card - Charge what is required to secure the one-time bonus and make payments on time, then you will be on your way to getting your plane tickets...

Debt settlement unlikely until you're behind on payments - That doesn't mean you can't try, but settlements have their downsides...

How hard inquiries hurt your credit score - Applying for a loan or credit card will trigger a hard inquiry, which will ding your score temporarily...



  If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the ‘Post to Facebook’ box selected, your comment will be published to your Facebook profile in addition to the space below.

Our editorial content is not sponsored by any bank or credit card issuer. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Secure SSL Technology
Secure SSL
Twitter Facebook You Tube Google+
About Us Privacy Policy Editorial Team Terms of Use
Contact Us California Privacy Rights Media Relations Site Map

Close X