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Many credit card providers require you to earn a minimum annual income for a credit card. The minimum income requirement for basic credit cards typically sits above $12,000 while for premium credit cards you could be required to make as much as $100,000. Find out more about how much you’ll need to earn to get a credit card in Canada, and learn more about other alternatives you can explore if your annual income for a credit card isn’t high enough.
What are minimum credit card income requirements?
Minimum credit card income requirements are classified as the lowest net income you can make to qualify for a specific credit card. Minimum income requirements generally start at $12,000 a year (before tax). Basic cards tend to come with lower credit card income requirements while premium cards typically demand higher incomes. Requirements can apply to your personal or household income, depending on your marital status.
Credit card income requirements in Canada are often broken down into different earning brackets for personal and household income. These are outlined below along with several examples of credit cards that fall into each category.
Examples of minimum credit card income requirements
Why do credit card companies check annual income for a credit card?
There are two main reasons why credit card companies check your annual income for a credit card:
1. To make sure you can make your repayments
Credit card companies have minimum credit card income requirements in place to make sure you have enough money to repay your credit card. By checking your annual income for a credit card in advance, they can make sure you’re set up to be able to make your repayments on time. This protects them against losing money due to a high volume of accounts in default.
2. To protect merchants from high fees
Credit card companies impose requirements on premium cards to reduce the interchange fees that merchants have to pay. Premium credit cards come with higher merchant fees than basic cards, which has caused many merchants to complain about the number of premium credit cards in circulation.
In 2010, the federal government introduced a voluntary code of conduct to protect merchants against rising credit card processing fees. Many credit card companies complied by placing more restrictions on premium card ownership to appease merchants and avoid mandatory regulation which might restrict them from charging higher rates altogether.
Do credit card companies actually verify your income?
It seems to depend on the provider. Some customers indicate that they were able to get approved for a credit card without meeting the mandatory credit card income requirements. Others indicate that they had to send pay stubs and employment verification into their credit card provider in order to qualify.
Again, this boils down to how much risk a provider is willing to accept by issuing a credit card to you without knowing whether you have the income required to pay it back. It also depends on whether you apply for a basic or premium credit card, as providers will limit premium cards to abide by the voluntary code of conduct established to protect merchants from high fees.
Compare credit cards with a low minimum income requirement
How can I find out the income requirement for a specific card?
Credit card providers usually include credit card income requirements on their websites or product pages, so you can double check before you apply for a particular credit card. Other lenders prefer not to outline minimum credit card income requirements, so you won’t see this information for every credit card you look at.
If you can’t find minimum credit card income requirements for a particular card, you can try calling the provider’s customer service department to ask about your eligibility. Here is an example of how the Royal Bank of Canada discloses the annual income requirements for its credit card products:
Picture: RBC Royal Bank
Why are some income requirements so much higher than others?
The main reason that credit card income requirements are much higher for premium cards than for basic cards is to minimize the processing fees that merchants have to pay. Premium cards come with much higher processing fees so credit card companies try to hand out fewer premium cards to make it fair for merchants.
Many credit card companies also impose higher credit card income requirements to make sure that they’re targeting big spenders with their premium cards. This helps to ensure that customers spend a decent amount of money on their card and can afford the annual fee that comes with most premium cards.
What other sources of money could count as income?
You may qualify for a credit card even if you’re between jobs or are currently relying on government assistance. Many credit card issuers will look at other sources of annual income for a credit card when deciding whether to approve you. These include the following:
Retirement fund distributions
Investment returns
CPP or pension income
Inheritance or trust fund distributions
Government benefits such as the child tax benefit or disability support
Unemployment benefits
Alimony or child support
Liquid assets such as a savings account
Other factors that affect your credit card application
Credit card issuers weigh a range of other factors before approving or denying your request for credit. These include the following:
Credit score
The better your credit score is, the more likely you are to be approved for a credit card, even if you don’t meet the minimum income threshold. This is because it’s up to credit card companies to decide whether or not they want to accept you based on your credit alone.
You could also find it difficult to qualify for a credit card if you have bad credit or no credit at all. You’ll typically need to have a credit score of 650 or higher to be considered for a credit card and your eligibility will vary based on your provider.
You may be required to show proof of employment to qualify for some credit cards. In this case, you could show letters of reference from employers or pay stubs. If you can’t show an ongoing employment status, you may need to prove that you have enough money from other sources to make your repayments on time.
While credit card issuers typically prefer people to have full-time employment, you could still be eligible for some cards if you work part-time, are self-employed or if you have a pension or other steady source of income.
Other financial information
Each credit card issuer will have its own process to evaluate the risks involved in lending to you. Aside from checking your credit score, your provider may pull your credit report to find out more about your history of missed payments or bankruptcy. It may also do some detective work to figure out how much debt you have and what your assets are worth.
Many credit card companies will approve you based on assessing your overall financial health. For this reason, you should try to gather as much proof of your income and financial stability as possible before you apply for a credit card to make sure you have the necessary documents on hand to demonstrate your eligibility and overall credit worthiness.
Alternatives to credit cards with minimum income requirements
If you’re struggling to get approved for a credit card due to not having a high enough income, you still have options.
Apply for a secured credit card. You may be able to apply for a secured credit card if you have money on hand to secure your balance. Many secured cards still let you earn rewards though most don’t come with additional benefits.
Take out a line of credit. You may be able to qualify for a line of credit with your bank if you’re a long-term customer and have a good credit score. This will give you access to a revolving pool of funds that you can pay off as you need.
Sign up for a Visa Debit or Debit Mastercard. If you just want the convenience of having a credit card, you can get a debit card affiliated with Visa or Mastercard. This will let you spend money online without needing to qualify for a credit card.
Bottom line
Credit card income requirements are in place to make sure you’re in a position to make your repayments. They’re also used to limit how many premium credit cards get dispersed to reduce the transaction fees that merchants have to pay. Now that you have a better understanding of minimum income requirements, you can compare credit cards to see which one might be the best fit for you.
Frequently asked questions
You may be denied a credit card if you have a low credit score or are carrying too much debt. The minimum credit card income requirements are only one factor that credit card issuers will take into consideration when determining your eligibility for a specific card.
Personal income is the amount of money you get from your own income. Household income looks at the combined income of you and your spouse. For example, you might not be able to qualify for a credit card with a $60,000 personal income requirement on your own. However, you may be able to qualify for the same card if your combined household income equals $100,000.
You may need to consider an alternative credit card that offers similar rewards and benefits with less strict eligibility requirements. You could also look into the credit card alternatives listed above if you can’t seem to qualify for even a basic credit card.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
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