Can I get a credit card if I’m unemployed?


Can I get a credit card if I’m unemployed?

If you’re unemployed and looking for a credit card, there are a few things you’ll have to carefully think about before you start applying.

You’re unlikely to be accepted for the credit cards with the best interest rates or rewards if you’re unemployed, but there may be other options out there for you. However, you should only be thinking about getting a credit card if you know you’ll be able to repay what you spend.

Is there room in your budget?

The most important thing to consider before you apply is whether you have enough money coming in to repay what you spend on your credit card.

When you’re unemployed, it’s unlikely your budget will leave you with a lot of spare cash. If you’re claiming benefits, a large chunk of this will probably be going on your rent or mortgage and your other essential bills.

This is why it’s worth looking at your bank statements to see whether you have much cash left over after you’ve paid all of your monthly bills. If there’s enough left to put towards making repayments on a credit card, you could start thinking about credit cards that might be suitable for you.

But if there’s nothing left, or very little, you should hold off on applying for a credit card right now. That’s because if you fall behind with your repayments you could be charged a penalty fee and your credit history will suffer.

Tip: We understand that being unemployed can be incredibly frustrating, and that it can sometimes happen completely out of the blue.

But in future, it’s always a good idea to try and set aside around three months’ worth of your wages in savings in case you do ever lose your job. This can cushion the blow as it gives you more time to look for a new job, while still allowing you to meet your essential bills without needing to borrow.

What do you need the credit card for?

Secondly, it’s wise to ask yourself why you’re applying for a credit card. Is it to make an essential one-off purchase, or to pay for repairs? If so then a credit card might be suitable for your situation.

On the other hand, if it’s for a shopping spree, or because your finances are stretched and you need a little extra cash, you really shouldn’t try to take out a credit card at this time. Spending on a credit card when you can’t afford to repay it may mean you miss payments, which will damage your credit history and could result in legal action by your lender.

There may be other reasons behind you wanting a credit card, though. When used responsibly, a credit card can offer protection on purchases over £100, and it can also help you to build your credit history. As long as you make at least the minimum repayment on time each month, your credit history will slowly improve.

Remember, even if you spend on your credit card and just make the minimum payment each month, you could end up with a large credit card bill as the interest piles up. When you can, it’s always better to clear the balance in full as you won’t have to pay a penny in interest. Otherwise, try to make more than the minimum repayment, as this will mean you’re charged less interest.

Be extra careful if you’re unemployed

So if you do have the room in your budget for credit card repayments, and you’re using it for one of the reasons we outlined above, a credit card could be suitable for you.

Because you don’t have an income from a job, you probably won’t be able to apply for the credit cards with the best rates – even if you have a perfect credit history. You may have to lower your expectations, but there are still credit cards that may be useful to you.

The Ocean Credit Card (34.9% APR representative) may be suitable for you if you know you have the spare cash to repay what you borrow. And with Ocean’s QuickCheck, you could find out whether you’ll be accepted before you apply – without leaving a mark on your credit history. 

Again, just because you have a credit card doesn’t mean you should be buying things you don’t think you can actually afford. A good way to make sure you don’t slip up is by asking yourself before you buy something – do I need this? Can I afford it? If you can’t afford to pay for it without a credit card, it’s probably not a good idea to buy it right now.