Layoffs, health issues, relocation, and a number of other factors can leave people without a job, and that can make it extremely difficult to make ends meet. It may also put you at risk of missing payments and winding up with bad credit.
While you should stick to strict budget during your period of unemployment, you may still need access to credit to get you through hard times. The catch-22 is that it can be difficult to qualify for a credit card without steady income.
Luckily, credit card issuers look at other sources of earnings besides employment, so you can often qualify if you get a public assistance check or receive money from a spouse or relative.
7 tips for getting a credit card without a job
Ultimately, you’ll want to secure enough income from employment or side gigs to achieve financial stability. But while you’re struggling with unemployment, a credit card can help you avoid more costly methods of borrowing, such as payday loans or pawn shops. Here’s how to get one, whether you have income or not.
1. Count all of your income
Eligible income sources vary by credit card issuer, but they often include things like:
- Earned wages from part-time, full-time, or seasonal employment
- Self-employment income
- Interest or dividends
- Retirement income
- Public assistance
- Money that someone else regularly deposits into an account for you to use
The income threshold you must meet may not be as high as you think, especially if you have a good credit score and don’t have debt.
To ensure the greatest likelihood of success, include all acceptable sources of income when calculating your total. Read the terms and conditions for the card you’re applying for to see what qualifies because you might be able to include things like alimony and child support.
2. Include your spouse’s income
The Ability to Pay provisions of the 2009 CARD Act stipulate that credit card issuers must verify your ability to meet monthly payments prior to approval for a card.
However, credit card issuers can include “any income and assets to which the consumer has a reasonable expectation of access.” This means, for example, if you share a joint account with your spouse or your spouse regularly deposits money into an individual account for you, you can count that amount as income for the purposes of most credit card applications.
3. Go with a cosigner
If the above income streams aren’t enough to qualify you, consider asking a family member or trusted friend with healthy credit to cosign a credit card application for you.
By cosigning, your friend or family member is agreeing to be responsible for your credit card debt in the event that you can’t pay it. This can help your chances of getting approved if you have a low income. But make sure that you’ll be able to meet the monthly payments or your cosigner will take on your debt as well, which could tank their credit score — and potentially harm your relationship with them.
You also want to see to it that you choose a cosigner who has good or excellent credit to decrease the risk of rejection. Additionally, pick someone who will continue to be responsible about making their payments on time.
Note that not all credit card issuers allow cosigners on applications. You’ll need to verify that it’s permitted or submit an application for a different card that does allow cosigners.
4. Become an authorized user
Another way to get access to credit without any income is to become an authorized user on someone else’s credit card. It’s usually free to add an authorized user on a credit card without an annual fee, and the primary cardholder can often set a spending limit for you if they’re worried about you running up their credit card bill.
As an authorized user, you’ll get a credit card that you can use to make purchases, but you won’t be responsible for the payments. This option is especially helpful for people who have poor credit or no credit history, since the status of the cardholder’s account affects your credit score. If the cardholder authorizes you to use an account in good standing, it can help you with building credit.
5. Consider a secured credit card
With a secured credit card, you put down a refundable security deposit upfront, and that amount becomes your line of credit, or how much you could potentially spend. The deposit reduces the risk to the credit card issuer, which is why you’ll have a better chance of getting approved. The catch is that many secured credit cards have high interest rates with few perks, and some also have annual fees.
A great option for a secured credit card is the OpenSky Secured Visa Credit Card. There is no credit check when you apply for this card and you don't need to have a checking account either. While the card does have a low annual fee of $35, it also reports to the three major credit bureaus. That means that if you use this card regularly and responsibly, you can start to improve your credit score and get your finances back on track.
6. Get a debit card that comes with credit card perks
With Aspiration Spend, you can receive up to 10% cash back when you use your debit card to pay with select merchants that belong to the bank’s Conscience Coalition. Examples of retailers in the coalition include Toms, Warby Parker, Blue Apron, Arcadia, Inc., and more.
Other valuable features of an Aspiration Spend & Save account include:
- You get unlimited fee-free ATM withdrawals at more than 55,000 ATMs.
- Your deposits aren’t used to fund fossil fuel exploration or production.
- You can opt to plant a tree every time you swipe your debit card.
- You can manage your account from the Aspiration mobile app, which is available for iOS and Android.
- Your first set of paper checks is free.
What’s more, if you open a Spend & Save account and make $1,000 in purchases with your debit card in the first 60 calendar days after opening, you’ll receive a $100 cash bonus. Sign up here to make sure you qualify for the bonus offer.
- Earn cash back rewards - up to 10% - when you spend with your debit card
- Get $100 bonus when you spend $1000 in the first 60 days
- Up to 1.00% APY interest (up to 25 times higher than Big Banks)
- Unlimited fee-free withdrawals at 55,000+ ATMs
- Deposits are FDIC insured
7. Try credit card alternatives
If you have a checking account, your bank will likely give you a debit card to use. If you don’t have one, you can purchase Visa gift cards or try an alternative card like the American Express Bluebird, which bills itself as an alternative to banking.
It allows you to access ATMs and provides you with Purchase and Fraud Protection. There are fees for certain transactions, but you can also use the card completely free if you know the rules.
The downside of these options is that you’ll only have access to the money that’s currently in your account. If you’re struggling and looking for a way to cover your expenses while you look for a job, these alternatives won’t help you.
The bottom line
Whether you’re looking to access credit or just protect your money while you’re unemployed, you have options. But remember that even the best credit cards don't provide free money, so you’ll need a plan to pay back what you owe. Add up your income sources and set a stringent budget, then try to pick up a side hustle while you look for a new full-time job.
No matter what led to your job loss, you probably won’t be unemployed forever. Keep your head up, work on your resume, limit your spending as much as possible, and keep practicing good financial habits so credit card issuers see you as having creditworthiness. Once you’re back in good financial shape, you may be able to apply for a rewards credit card with a higher credit limit, which could open the door to all kinds of opportunities.