Credit cards for the unemployed
Compare credit cards for the unemployed
- Search for the right credit card, before you apply
- Check your eligibility without impacting your credit score
- Compare credit cards from leading providers
Types of credit card that might suit the unemployed
If you’re currently out of work and have a poor or limited credit history, you may not be eligible for credit cards from mainstream lenders. Instead, you could look at:
- Credit cards for bad credit – these typically have lower borrowing limits and may charge high interest rates. Some providers may have a minimum income requirement.
- Credit builder credit cards – these are designed for anyone with a low credit score or who has never borrowed before. They also tend to offer low credit limits and higher interest rates. Manage your payments responsibly and this type of card could help you build your credit score.
- Prepaid cards – while not actually credit cards, these pay-as-you-go debit cards let you load them with cash to use on your everyday spending. Some prepaid cards can also help you build your credit history with add-on plans that reward regular repayment.
Why is it harder to get credit cards if you’re unemployed?
If you don’t have a regular income, credit card providers may see you as a higher risk. That’s because without any cash coming in, they’ll want to know how you plan to repay what you owe.
It may also be the case that you’ve struggled with past repayments, which has affected your credit rating. Perhaps because you’ve been out of work on and off, or had long periods without a job.
Similarly, if you’ve been out of work and applied for a lot of credit in a short amount of time, you may be seen as risky because of concern about your ability to repay. Or maybe you’ve simply not borrowed before and you’re an unknown risk.
At Compare the Market, we can show you which cards you’re likely to be eligible for, from the providers we compare.
Simply use our credit card eligibility checker to see what options may be available to you, without it doing any harm to your credit score.
Credit cards for the unemployed
If you’re out of work or on a low income, you may struggle to find a credit card from a mainstream lender. Many banks and building societies won’t consider you unless you earn enough to meet their income threshold.
However, although your options may be limited, it’s possible to find cards for the unemployed, as well as credit cards for the self-employed and for those on a low income or zero-hours contracts.
Can I get a credit card if I’m out of a job?
Yes, you may still be able to find a credit card if you’re not working. Lenders understand that unemployment is often temporary, and circumstances can quickly change. But being unemployed could automatically rule you out of some of the best credit card offers with the lowest interest rates.
Bear in mind, though, that any reputable credit card provider should carefully assess your situation to make sure that you can afford the repayments. If you do qualify, the card is likely to have a low spending limit. And you’ll likely face high interest rates due to the greater risk you pose to the lender.
Should I get a credit card if I’m unemployed?
This is a key question: ask yourself ‘how will I pay back what I borrow?’ When used responsibly, a credit card could help you manage your money better while you’re unemployed.
But if you can’t pay off the balance in full at the end of each month, you could rack up interest charges and end up in spiralling debt – at a time when you can least afford to repay.
Failure to make repayments will also damage your credit score, making it harder and more expensive to borrow in future.
So think about what you need to borrow for. If it’s for a one-off emergency like a broken boiler, then a credit card could provide a temporary fix.
But if you’re using a credit card just to pay for everyday essentials, such as food or bills, then it’s often a sign that you’re in financial difficulty. And seeking help early can prevent much bigger problems later.
If you’re struggling to stay on top of your money, debt charities such as National Debtline and StepChange may be able to help. Or there may be help available from your local council.
Can I afford a credit card?
Yes, if you can pay it off each month. Stick to your credit limit and repay on time, and it could help build your credit score and boost your eligibility for better card deals in the future.
But if you can’t pay off what you owe in full, you’ll pay interest on the remaining balance. That could make your spending much more expensive, especially as credit cards for the unemployed are likely to have high interest rates.
If you can’t afford the repayments, you could then cause further damage to your credit score.
To see how much it could cost you to pay off a credit card, try out our credit card repayment calculator.
Alternatives to a credit card
If you can’t get a card, there are other options to consider if you’re unemployed.
- Bad credit loans could be a possibility if you want longer-term borrowing but don’t qualify for a standard unsecured personal loan. Because of the higher risk involved for the lender, they typically carry higher interest rates and may have strict borrowing limits.
- Guarantor loans involve another person, usually a friend or family member, guaranteeing to cover your repayment if you can’t make it yourself. These loans tend to be a last resort because interest rates are high and they require the guarantor to take on a significant financial risk.
- Secured loans could be an option for longer-term borrowing if you have an asset, such as a home, to put up as collateral. But carefully consider the risk involved: if you fail to make repayments you could lose your home.
- Credit union loans can let you borrow small sums. Some unions might have rules that require you to first open an account – and be a member for a set time – before you can borrow. You may also have to live or work in a particular part of the country. Find a credit union.
Why compare credit card deals with Compare the Market?
It can be difficult to find credit cards if you’re unemployed. And making multiple applications can be damaging for your credit score, so it makes sense to see what you could be eligible for before you apply.
At Compare the Market we compare credit cards from different providers, so you can see our best credit card offers if you’re unemployed. We’ll show you which of our credit card deals you’re likely to be accepted for before you apply. And it won’t impact your credit score.
Frequently asked questions
Can I get a credit card on Universal Credit?
You may be eligible, but you’ll have fewer options without other money coming in regularly. Many credit card providers ask for a minimum annual income, which may be difficult to meet if you’re receiving benefits.
Are there balance transfer credit cards for unemployed people?
Many of the best balance transfer credit card deals are only available to those with a good credit score and a regular income. However, it’s possible to find 0% balance transfer credit cards even if you have a low credit score or are unemployed.
Bear in mind, though, that if you do qualify for a balance transfer card, the 0% period offered is likely to be much shorter. And the interest rate you’re moved onto after the end of the introductory period could be very high.
Can I get a credit card with no credit check?
No, it’s not possible to apply for any type of credit card in the UK without a credit check. However, you can use our eligibility checker to see which credit cards you’re likely to be accepted for before you apply. It uses a soft credit check, which won’t impact your credit score.
Make sure you answer all questions accurately on your credit card application, including your employment status. It could be seen as fraud if you don’t tell the truth.
