Credit cards for unemployed people and bad credit are easier to get hold of nowadays but they often come at a bigger cost
There are more credit cards for the unemployed – as well as those with limited and bad credit histories – than ever before.
Credit card providers have been keen to make their products more readily available and adaptable to consumers’ circumstances.
In the past credit cards were purely for those with regular incomes and unblemished credit histories, but in recent years, that has all changed.
There are now credit cards designed to meet the requirements of the self-employed and those with uncertain or fluctuating income – such as those on zero-hour contracts.
Whether your circumstances are constantly changing or you need some credit to make ends meet while switching careers, you’re likely to find a credit card provider who’s willing to listen.
However, being accepted for one of these credit cards can be a little trickier, so it’s worth shopping around and carefully checking each provider’s terms and conditions to minimise the risk of damaging your credit history by getting rejected.
If you’re new to credit, then have a look at our guide to first credit cards and learn more about what goes into your credit history file.
Low-income and unemployed credit cards
Many of the bad credit credit cards specify a minimum income requirement of around £10,000 per annum, however, some providers are even willing to consider applicants earning £4,000 over 12 months.
If you are earning above the minimum threshold, that does not mean you’re guaranteed to be accepted – only that you meet the requirements for consideration.
Remember, there will be other conditions attached to the application that you’ll need to be aware of such as how recently you applied for a similar card, if you’ve had any county court judgements (CCJs) or a history of bankruptcy.
Before you consider applying, it’s important to check what the terms are regarding late payment fees, minimum monthly repayments and the APR.
As mentioned before, credit card providers do not like taking risks, so if you do not have a fixed income, you are likely to be hit with higher penalty charges and an above average interest rate if you don’t keep on top of your finances.
If you don’t have a chequered credit history but your income is still low or fluctuating then you may be considered by some balance transfer credit card providers.
The chances are slimmer than with the bad credit credit cards so it’s important to take extra precaution.
Some balance transfer credit cards on the market will ask that your income is above £10,000 per year, but they’re less likely to accept people who don’t have fixed employment.
Ultimately, having some form of regular income is the best way to improve your chances for credit card approval, but there are options for those who aren’t in employment right now and those with changing circumstances and bad credit histories.
If you are in desperate need of credit then you may be better off speaking to your local credit union, which can sometimes provide better rates than the banks and credit card companies.