Tuesday, April 11, 2017

Can I get approved for a credit card if I don't have a job?

The Ultimate Guide to getting a credit card for spouses that have no income and no (or little) credit history

Problem: You want to get approved for a credit card, but you are a stay-at-home mom (or dad) and don't have an income and/or you don't have any credit history.

So really, I've presented 2 problems:

1. Not having a credit history...or maybe you don't even know if you have a credit history
2. Not having an income because your spouse is the wage earner

These 2 things are very important because this is basically all the banks will look at when deciding to approve your credit card application or not.

How to look up your credit score 

My favorite resource for looking up my credit score is Creditkarma.com.

  • It's completely free, does not ask for payment information
  • You can get an updated credit score every week. 
  • It will also give you a credit report (a credit report is different than a credit score).

Even if you've never had a credit card before, that does not mean you don't have a credit score. You can get credit history in many different ways....renting, paying utilities, car loans, student loans, and other ways. Yes, credit cards and making installment payments on loans and mortgages are the most common ways to build credit.

Other resources that will give you a free credit score (please don't pay money for your credit score!):

  • Creditsesame.com - I look at this one every once in a while
  • DiscoverCard - No, you do NOT have to be a discover card member. I've never used this before, but it looks easy to use.

Next, What is a good enough credit score to apply for a credit card?

The are hundreds of different credit cards and they are not all equal. Some require top notch credit scores.

  • I would say a credit score of 750+ will be good enough for basically any credit card
  • Then there are medium range credit cards that might require a score in the range of 670-750
  • Then there are the easiest to qualify for credit cards in the range of 620-670

These numbers are NOT official numbers. I'm just giving you an example. The banks won't tell you, "you need a credit score or 720+" to get approved. Generally speaking, the credit cards with NO annual fees are the easiest cards to get, the ones with highest annual fees are the most difficult, and somewhere in between are the medium ones.

How to build your credit history fast

  • If your credit score is in the low 600's or lower then you'll probably need to do some things to improve your score. For those that simply have never had credit card before and don't have any credit history, the best way to improve your score fast is to have your spouse or family member (or friend if they trust you) add you as an authorized user. This will basically make their credit history part of yours! 
  • Apply for a store credit card (Gap, Kolh's, Old Navy, gas stations, etc.). These credit cards are generally very easy to get.
  • Secure credit cards via your local credit union/bank. If you don't have a local bank then you'll need to apply for a checking/savings account with them first. 

Finally, how to apply for a credit card while not having an income because your spouse is the wage earner

If you put on the credit card application that you have $0 in income then you will more than likely not be approved. The good news is that if your spouse has an income you can include that on your application! Here is what Chase and American Express say about income on their application:

From American Express's credit card application

From Chase's credit card application
There you go! All you need to be able to include your spouses income is to be over 21 and you use some of the money he/she makes!

So when it asks what your occupation is you can put your spouses occupation and employer or you can put that you are a stay-at-home mom or "other" and list your spouse as the income source. When my wife applies for a credit card, I just put in my employer on the application.

Recommended credit cards if you have never had a credit card:

Chase Freedom Unlimited - $150 bonus after spending $500 in first 3 months. 1.5% cash back rewards. Rotating 5% cash back categories. No annual fee.

DiscoverIt - $50 bonus after first purchase. 1% cash back rewards. Rotating 5% cash back categories. No annual fee. If you shop at Costco, Sam's Club, or BJ's a lot, this can be a good one to have because the 5% cash back category is often wholesale clubs.

BarclayCard CashForward - $200 bonus after $1,000 spending in 3 months. 1.5% cash back rewards. No annual fee.

I recommend these for if you have never had a credit card because they all have 1. No annual fee, 2. Cash back rewards is pretty good, 3. Come with some kind of new account bonus.

Basically, you can get one of these cards (or all 3) and keep the card for the rest of your life cause they are all around solid cards.

Disclaimer: As always, be very careful when getting a credit card because the risks can far out weigh the benefits. Check out some past articles about credit cards to learn more. 

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