What kind of credit cards should low income earners get?

August 16, 2017
People with low annual income will not be able to get approved for the best rewards credit cards. However, there are some cards that are perfect for low income consumers and young people without a full time job and a credit history.
What kind of credit cards should low income earners get?

Why get one of these cards? If you manage your card account correctly, you will be building a positive credit history that will help you get better cards and larger loans in the future.

Here is what low income earners should know about applying for credit cards.

  • The first option, especially for young applicants, is to get someone (a parent or relative) to cosign with you. The card company will then take their income and credit score into account so that you can get a better interest rate and a higher credit limit.
  • Get a secured credit card. These credit cards require an initial deposit that is used by the card company as a kind of default insurance. If you do not pay off your balance on time, they will take the initial deposit. These cards often have high interest rates, so you do not want to carry a balance from month to month. On the plus side, however, credit bureaus treat secured cards just like regular cards. This means that if you manage your account well, your credit score will improve quickly and you will be able to be approved for better cards in the near future. 
  • Get a regular card with a very low limit. Some cards for low income earners are not secured, but they have a very low credit limit. Low limit cards are not for major purchases, but, like secured cards, they are very helpful for improving your credit score.
  • Another thing to remember: consider all your income, not just the income from your main job. If you have additional income from another job or business, however small it might be, you can include it on your application’s income statement. This could help you get accepted for better credit cards.

Need money quick? An online personal loan is probably better than a credit card

Online personal loan providers may not check your complete credit score. Instead they ask to see a pay stub and bank statement. With these loans, the money is disbursed quickly, so you do not have to wait through a lengthy approval process. These quick loans usually have a borrowable maximum of $700-$750. This is higher than the credit limit for low limit or secured credit cards (which usually offer between $200-$500).