Worried you won’t get approved for a credit card because you’re unemployed? Don’t fret. You could get approved if you have a fairly steady stream of income from another source.
How so? The Credit Card Act of 2009 permits you to include other sources of income that you expect to receive each month on your credit card application. If you’re receiving unemployment or other government benefits, returns from investments, self-employment income or any other forms of non-wage income, you may qualify.
When you apply, credit card issuers will evaluate your credit score, credit history, outstanding debt obligations and monthly housing costs. You will also be asked to provide information about your income. Ultimately, the credit card issuers want to know that you can comfortably afford your obligations.
Assuming your alternative source of income is adequate and your credit history is solid, they may approve your credit card application. But if you appear to be overextended, you could get denied as the credit card issuer may be concerned that an additional monthly expense may be too much for you to handle.
What to Do if Your Credit Card Application Is Denied
There are always other options, such as from other providers or a secured credit card. However, you want to figure out why your application was denied before applying elsewhere. The credit card issuer will send you a Notice of Adverse Action document by email or postal mail.
Read the letter to determine if your income was the issue or if your credit score needs a boost. If you were denied due to insufficient income, you might be able to find other credit card issuers who will approve your application for a new card. But if your credit isn’t quite up to par, it may be worthwhile to improve your credit score before exploring other options.
Should You Get a Credit Card if You’re Unemployed?
What’s your reason for wanting a credit card? Is it to build your credit health or make ends meet? Will you rely on the credit card to cover expenses?
These are all valid questions to ask before making a decision. By opening a credit card, using it responsibly, and paying the balance off each month, you can improve your credit score. Consider cards that offer an introductory APR for 12 to 24 months. It’s also ideal if the card is accompanied by a competitive interest rate.
But if you’re already low on funds and can’t afford to pay the card in full each month, it may not be in your best interest to secure a credit card. Instead, you should wait until you obtain more income and lower your outstanding debt obligations before applying.
A Credit Card Alternative
A Credit Builder Loan can help improve your score. It allows you to access up to $1,000 in just minutes and rebuild your credit, as your timely payments are automatically made each month.
To qualify, you’ll need a consistent stream of income. Unemployment income, government benefits, alimony and child support qualify for consideration. You should also have an active checking account that’s at least 60 days old and in good standing.
Plus, there’s no credit check, so a lower score won’t prevent you from getting approved.
Ready to get started?
Download the MoneyLion app to your mobile device, link your bank account, and apply for a loan as part of the Credit Builder Plus membership.
If you’re approved, MoneyLion will deposit the funds (up to the full loan amount) into your bank account right away. A portion may be withheld in an interest-earning Credit Reserve Account for you until the loan is paid off, depending on your financial situation detected in your linked back account. This will protect you from over-borrowing and help maintain a healthy credit utilization percentage.
Payments are automatically deducted from your bank account, so you won’t have to worry about late payment penalties. MoneyLion will also report account activity to the 3 credit bureaus – Equifax, Experian and TransUnion – each month to improve your credit history.
It’s only $19.99 to access the Credit Builder Loan membership, which includes other perks like access to 0% APR Instacash cash advances.
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Disclosures
Credit Builder Plus membership ($19.99/mo) unlocks eligibility for Credit Builder Plus loans and other exclusive services. This optional offer is not a Pathward product or service. A soft credit pull will be conducted which has no impact to your credit score. Credit Builder Plus loans have an annual percentage rate (APR) ranging from 5.99% APR to 29.99% APR, are made by either exempt or state-licensed subsidiaries of MoneyLion Inc., and require a loan payment in addition to the membership payment. The Credit Builder Plus loan may, at lender’s discretion, require a portion of the loan proceeds to be deposited into a reserve account maintained by ML Wealth LLC and held by Drivewealth LLC, member SIPC and FINRA. The funds in this account will be placed into money market and/or cash sweep vehicles, and may generate interest at prevailing market rates. You will not be able to access the portion of your loan proceeds held in the credit reserve account until you have paid off your loan. If you default on your loan, your credit reserve account may be liquidated by the lender to partially or fully satisfy your outstanding indebtedness. May not be available in all states. Credit Reserve Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Credit Reserve Account, see Investment Account FAQs and FORM ADV.
Instacash® is an optional service offered by MoneyLion. Your available Instacash Advance limit will be displayed to you in the MoneyLion mobile app and may change from time to time. Your limit will be based on your direct deposits, account transaction history, and other factors, as determined by MoneyLion. Expedited delivery requires Turbo Fee. See Instacash Terms and Conditions for more information and eligibility requirements.
MoneyLion does not provide, nor does it guarantee, any third-party product, service, information, or recommendation. The third parties providing these products or services are solely responsible for them, as well as all other content on their websites. MoneyLion is not liable for any third party's failure with regard to those advertised products, services, and benefits. These advertised products and services may not be FDIC insured or bank-guaranteed, and may be subject to a different privacy policy than MoneyLion’s. You should check individual offers, products, and services to become familiar with any applicable restrictions or conditions that may apply. MoneyLion may receive compensation from third parties for referring you to the third party, their products or to their website.
Instacash is a 0% APR cash advance service provided by MoneyLion. Your available Instacash advance limit will be displayed to you in the MoneyLion mobile app and may change from time to time. Your limit will be based on your direct deposits, account transaction history, and other factors as determined by MoneyLion. This service has no mandatory fees. You may leave an optional tip and pay an optional Turbo Fee for expedited funds delivery. For a $40 Instacash advance with a Turbo Fee of $4.99, your repayment amount will be $44.99. Generally, your scheduled repayment date will be your next direct deposit date. An Instacash advance is a non-recourse product; you will not be eligible to request a new advance until your outstanding balance is paid. See Membership Agreement and help.moneylion.com for additional terms, conditions and eligibility requirements.