When you apply for a credit card, the card provider will take your income into account to help establish whether (and how much) you can afford to borrow. But just how much income must you earn to be approved? And what other factors might be considered? This guide will answer those questions and more.
The credit card market does not have a standard minimum income requirement that needs to be met. Instead, each card will come with its own minimum income requirements or in some cases, the card issuer may simply not declare a minimum.
Lenders in the UK are required by the Financial Conduct Authority (FCA) to lend responsibly. In other words, they shouldn’t offer credit to the point where borrowers are at an increased risk of getting into unsustainable debt.
Simply put, a credit card issuer must consider your ability to repay the debt. To do this they will usually look at your credit history to see whether you have a visible track record of repaying debt and are a reliable borrower. This means that if your credit score is low or you have struggled to repay debt in the past, you’re unlikely to be offered huge sums of credit again.
Lenders will also look at your income vs outgoings. You might have a super-high income but be in debt up to your eyeballs or have a large number of inflexible financial commitments, for example. By contrast, you might have a low income, but very little in the way of financial commitments or outstanding debt.
All of this will be taken into account by the lender to establish whether you can afford to borrow more, and how much. Credit limits are always set to the individual, so if your income is low, it’s likely you’ll be offered a lower credit limit. However, if you use your credit card sensibly over time, your provider may agree to increase your credit limit after a few months.
A card issuer must ensure that given your credit history and your income and outgoings, you’d be able and likely to keep up the repayments on a fully maxed-out card.
Below you’ll find the minimum income requirements for some of the major credit card providers.
Back in 2016, American Express announced it was removing minimum income requirements for its credit cards. However, you’ll still be asked about your income (and other personal details) when you apply for a card with Amex.
To apply for your first Barclaycard, you’ll need a minimum income of more than £3,000 a year. However, if you already have a high amount of debt, this will also be factored into whether you can borrow more.
There is no particular minimum income requirement specified for Halifax or its big sister Lloyds Bank, but they do say you’ll need to have a “regular annual income” to be able to qualify for one of their credit cards.
HSBC requires a minimum income of at least £6,800 a year to apply for one of its credit cards. Unusually specific! As you might expect, minimum income requirements depend on the card you’re applying for, and HSBC does offer some premium deals.
To apply for a credit card with Nationwide, you’ll need a minimum income of at least £5,000 per year, depending on the card.
To apply for the majority of Santander credit cards, you’ll need a minimum annual income of £7,500.
If your income isn’t simply from an employer, lenders may still take it into account. Each lender will have its own policy on what can and can’t be included in your income, which could take into account some or all of the following:
Like most industries, the world of credit cards is full of different companies trying to make a buck in different ways. An old, established card issuer might only be interested in serving borrowers it deems the safest bets, but a smaller, younger card issuer might have found a way to serve other sectors of the market by looking more closely at borrowers’ situations, for example.
Some cards come with all sorts of intricate features and rewards, but a card issuer will usually want to recoup this expense by charging an annual fee or encouraging the cardholder to spend lots of money on the card. Cards aimed at those with lower incomes, by contrast, will often be pared-back and straightforward.
Yes, you will always need an income to get a credit card as this will help to prove to lenders you can afford to pay back the amount borrowed.
Lenders will generally be happier lending to you if you have steady employment with a steady income. If you’re unemployed or have irregular work, you’ll likely find it much harder to qualify for a credit card as lenders will be more concerned about your ability to repay the debt.
The best way to get a credit card with a low income is to shop around and use a comparison site’s “eligibility checker“. You can also find eligibility checkers on most credit card provider websites.
The advantage of using an eligibility checker is that it will show you which cards you’re most likely to get accepted for without hurting your credit score. As it only uses a “soft search” it won’t leave a mark on your credit file as a “hard search” would.
This reduces your risk of applying for cards that you’ll get rejected for which can have a damaging effect on your credit score.
It is also sensible to make sure your credit score is as good as it could be before you make your credit card application. The better your credit score, the more likely you are to get accepted. So it’s worth taking steps such as checking you’re registered on the electoral roll, correcting any mistakes on your credit report, paying bills on time and doing your best to pay down any other debt.
Yes, it is possible. In fact, the minimum annual earning threshold for many credit cards tends to sit around this level, or in some cases it’s even lower. However, your options may be more limited and you’re unlikely to qualify for credit cards that offer exclusive rewards and benefits.
If you don’t have a lavish lifestyle and your outgoings are low, card issuers are more likely to deem a credit card affordable.
Potentially, yes. When considering your application, lenders may take other sources of income into account, not just your salary. In some cases, this will include certain benefits such as Universal Credit and Personal Independent Payment (PIP). Just keep in mind that it can be harder to get accepted for a credit card if you’re receiving benefits. Each lender will have its own policy on what can and can’t be included in your income.
There’s no clear-cut answer to this as your income is just one of the factors lenders will consider. When considering your application, lenders will also look at your outgoings, and especially your debt-to-income (DTI) ratio which essentially compares your monthly debt payments to your monthly gross income. It’s calculated by dividing your monthly recurring debts by your monthly income, then multiplying this figure by 100.
For example, let’s say Angela earns £5,000 a month but also pays out £3,000 a month to cover her debt repayments. Her debt-to-income ratio will be 60%.
In comparison, Leanne earns £1,500 and pays out £500 a month, and has a debt-to-income ratio of 33%.
In this situation, Leanne is more likely to be offered credit than Angela due to her lower DTI ratio.
It’s possible that you will be offered a higher rate of interest on your credit card if you have a low income. After all, card issuers only have to give 51% of their card users the advertised “representative APR”. That’s why it’s important to shop around and look for the most competitive deal you’ll qualify for.
Minimum income criteria vary from card to card, but the good news is that even if you have a low income, it is still possible to get a credit card. Most card issuers now offer an “eligibility checker” service, so you can find out before you apply (and without hurting your credit score) whether or not your application would be likely to get approved. Better still use Finder’s card eligibility checker to check multiple card issuers in one go.
To increase your chances of getting accepted for a credit card, it also pays to make sure your credit score is up to scratch. Lastly, it’s a good rule of thumb to only borrow what you can comfortably afford to repay.
Lastly, it’s a good rule of thumb not to try to borrow more than you can comfortably repay.
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