Are there low income credit cards?
Yes. The Consumer Financial Protection Bureau amended the Credit CARD Act to make it easier for stay-at-home spouses and partners to get credit cards. Card issuers can now consider third-party income if the applicant has access to that money — for instance, a stay-at-home spouse who has access to their spouse’s income. If this applies to you, you may list your spouse’s income on your application when applying for a credit card.
Even with low income, you can still get your hands on a few terrific credit cards, such as the Discover it® Cash Back. Just know that your income can affect your total credit limit.
What should I look out for when applying for a credit card with low income?
Low income credit cards have their benefits but also their drawbacks. Keep an eye on:
- Annual fee. Because someone with a low income is considered a higher risk by banks, they will look to get as much money from you upfront in case you default on your monthly credit card payments. Watch out for credit cards with a high annual fee.
- High interest rate. Again, because you may be considered high risk, you can expect a higher APR, which means you’ll be paying more in interest on your purchases. Look for the lowest possible APR, but more importantly — pay your balance in full and on time.
- No frills features. Most cards that a low income earner will qualify for don’t offer extras such as rewards, access to concierge services, travel benefits and complimentary rental car insurance coverage.
- Low credit limit. If you earn a low income, your credit limit will also be low. By law, card issuers can only extend credit that the borrower can realistically repay. In some cases, you can request a credit limit increase.
Consider secured credit cards
If you are turned down during the application process, don’t lose hope. There are still options available to those with low income and poor credit. If you find yourself in this situation, consider applying for a secured credit card. Secured credit cards present a great opportunity to fix your credit history and build your credit score. With a low security deposit, you can start adding positive information to your credit history and eventually qualify for a non-secured card.
Compare secured credit cards
This type of cards can be a solid option as a low income credit card. Just make sure you compare multiple cards until you find the best card for your financial needs.
Become an authorized user
If your income is keeping you from the credit card you want, consider tagging along on a loved one’s application as an authorized user. While the card account won’t be in your name, you’ll reap the benefits of the card as and good credit habits will reflect on your credit score in addition to the primary user.
Find a co-signer
Similar to becoming an authorized user, you can also find a co-signer to vouch for you and apply alongside you. In this case, you’ll both take responsibility for the card account.
Having a low income doesn’t have to stop you from getting a credit card. But if you keep getting declined for ones you want, consider a secured credit card to compare your other options.
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