Explore the best credit cards for unemployed or low-income individuals.
Best Credit Cards for Unemployed People
Credit cards are a great money management tool that allows you to borrow and pay back money and helps build your credit report.
Many people associate credit cards with high earners, and although that is sometimes true, it's not always the case.
You can still get a credit card even if you're unemployed, have a low income, or have a bad credit score.
Chances are you won't be accepted for the top credit cards but don't lose hope just yet. Right now, you may be entering retirement or between employment, but that's where low-income credit cards come in to help you.
In this article, you'll learn all about low-income credit cards and credit builder cards and explore the best credit cards for unemployed or low-income individuals.
|1. Tesco Bank Foundation Credit Card||★★★★★||Click Here|
|2. Barclaycard Forward Card||★★★★★||Click Here|
|3. Ocean Credit Card||★★★★★||Click Here|
|4. Capital One Classic Credit Card||★★★★★||Click Here|
What Credit Cards are Available for Unemployed or Low-Income People?
Before applying for a credit card, you must know your credit history. Your credit score determines credit limits, annual percentage rate, and whether you'll be accepted. You can check your credit rating via Equifax or TransUnion. Your credit score ranges between 0 and 999. The higher your score, the more likely you'll be accepted for a credit card.
Your credit rating may fall on the lower end, meaning you have a bad credit score, but that doesn't mean all your options are closed off. You may not be the ideal candidate for a premium credit card, but credit card options are still available.
There are three types of credit cards you can apply for if you've currently unemployed, have a low income, or simply looking to improve a bad credit score.
The two types of credit cards available to you:
- Poor or bad credit rating credit cards: a card for bad credit allows you to borrow a line of credit to help you spread the cost of large purchases. It also teaches you to budget and helps you form the habit of using credit and paying it back on time.
- Credit builder cards: a credit builder card helps improve your credit rating. They're ideal for people with bad credit or no credit history, as they help you go from a poor credit rating to an excellent credit score over time.
- Low-income credit: these cards are ideal for people with low or irregular incomes under £10,000. The credit limits on these cards are manageable, so you can afford to pay back the balance. Low-income credit cards also work as great credit builders, as you can create a good credit history by borrowing small amounts and paying them back on time.
Before applying for the best credit cards for unemployed and low-income people, you must compare credit cards to find the best deal most suitable for your needs and financial situation.
Pros and Cons of Getting a Credit Card
If you're unemployed, retired, or have a low income, you must know all the responsibilities of signing up for a credit card.
Look at your financial history, credit history and personal circumstances to determine if a credit card is the right financial tool.
✔️ Access to credit: since this is probably your first credit card, you have newfound access to a credit you didn't have before.
✔️ Improve credit rating: using your credit card balance and paying it back on time will positively impact your credit report. Credit builder cards are designed to improve bad credit history and create a more positive credit record.
✔️ Purchase protection: when using a credit card to make purchases, they'll be protected under the Consumer Credit Act. So, if any issues arise or your card is stolen, you can report the card missing and get reimbursed.
✔️ Spread the cost of purchases: buying big ticket items can be expensive, and using a credit card can help give you more time to pay them off. Sometimes emergencies like a washing machine breakdown can occur, and knowing you have a credit card to help you out in your hour of need can help ease your worries.
❌️ Higher interest rates: as people with a low income or bad credit rating are considered high-risk borrowers, credit card providers usually set much higher APR rates than people with a good credit score.
❌️ Lower credit limits: if you've got bad credit or a low income, you'll usually be offered a lower credit limit than someone with an excellent credit score. You are unlikely to be offered a high limit, but you may find credit limits ranging from £50 to £1,500. Most credit card providers will increase credit limits if you demonstrate good card management.
❌️ Increased debt: if you've already got existing debt and have endured recent financial difficulty, it may not be the best option to take out another line of credit. If you miss monthly payments on a credit card, you may do further damage to your credit rating. If you want to eradicate debt from an existing credit card, consider getting a balance transfer credit card.
❌️ Late payment fees: most credit card companies have a late payment fee if you cannot make the minimum monthly repayments. So, if you decide to get a credit card, ensure you set a reminder in your calendar for when the payment is due to avoid any extra costs.
Best Credit Cards for Unemployed and Low-Income People — Reviews
Here are the best credit cards for unemployed or low-income individuals.
1. Tesco Bank Foundation Credit Card
Representative Example – If you spend £1,200 at a purchase interest rate of 29.9% p.a. (variable) your representative APR will be 29.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- APR rates: 29.9% variable
- Credit limit: £250 up to £1,500
- Minimum repayment amount: £25
Representative APR Example: a 29.9% variable annual purchase rate, with a 29.9% representative APR with an assumed credit limit of £1,200. Your APR rates and credit balance may vary depending on your circumstances.
The Tesco Bank Foundation Credit Card is a credit builder card that allows you to collect rewards by simply using it to make purchases. When you first apply for the credit card, you'll be offered a credit limit from £250 to £1,500. If you continue to make your minimum payments on time and stay within your limit, you may be considered for regular credit increases.
Tesco rewards you with Clubcard points when you use your credit card for making purchases. You can earn five points for every £4 spent at Tesco, one point for every £8 spent outside Tesco, and one point for every £4 spent on Tesco Fuel, plus one point for every litre bought.
With a Tesco credit card, you'll gain access to Tesco Bank Creditview for three years from your account opening. So, you can track your credit score, see it improve in real time, and receive monthly updates on your credit file.
2. Barclaycard Forward Card
Representative Example – If you spend £1,200 at a purchase interest rate of 33.9% p.a. (variable) your representative APR will be 33.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- APR rates: 33.9% variable
- Credit limit: £50 to £1,200
- Minimum repayment amount: £5
Representative APR Example: a 33.9% variable annual purchase rate, with a 33.9% representative APR with an assumed credit limit of £1,200. Your APR rates and credit balance may vary depending on your circumstances.
With the Barclaycard Forward Credit Card, you can make 0% interest purchases for the first three months of opening the account. You can benefit from a personalised credit limit based on your credit history.
This card is ideal for people with zero-hour contracts because the limit can be as small as £50, and if your financial situation changes, you won't have to worry about accruing a lot of debt to pay back.
Additionally, starting with a smaller credit balance is great for budgeting. The more you get into the habit of using your limit and paying it back on time, the more you can earn a credit limit increase of 3% after the first year.
If you're worried about forgetting to make your monthly payments, this card is ideal because you can manage your account with handy alerts helping you keep on top of spending and building your credit score. With your new Barclay credit card, you'll get up to five months free of Apply Subscriptions for AppleTV+, Apple Music, Apple Arcade, and more.
You must meet the minimum income requirement of £3,000 per annum to qualify for this credit card.
3. Ocean Credit Card
Representative Example – If you spend £1,200 at a purchase interest rate of 39.4% p.a. (variable) your representative APR will be 39.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- APR rates: from 24.9% to 39.9% variable
- Credit limit: £200 to £8,000
- Minimum repayment amount: 3% or £5 (whichever is greater)
Representative APR Example: a 39.4% variable annual purchase rate, with a 39.9% representative APR with an assumed credit limit of £1,200. Your APR rates and credit balance may vary depending on your circumstances.
With the Ocean Credit Card, applicants with all credit histories will be considered, so even if you've got bad credit or no credit, you still have a chance to be accepted. Credit limits are personalised to each candidate depending on their circumstances.
If you're worried about hard checks on your credit record, with Ocean, you can check your eligibility without harming your credit score, and you'll receive a response within 60 seconds.
You can keep up-to-date with your credit via the Ocean Mobile App, where you can make payments and check your balance on the go. Keep track of your spending; you can control your spending with free email and text alerts.
You may also be eligible for 0% interest rates on balance transfers and purchases for six months. And if you continue to demonstrate good card management, you may become eligible for limit increases.
If you're looking for a credit card for your household, the Ocean Credit Card allows you to add up to three other cardholders.
4. Capital One Classic Credit Card
Representative Example – If you spend £1,200 at a purchase interest rate of 34.94% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- APR rates: 34.9%
- Credit limit: £200 to £1,500
- Minimum repayment amount: £5
Representative APR Example: a 34.94% variable annual purchase rate, with a 34.9% representative APR with an assumed credit limit of £1,200. Your APR rates and credit balance may vary depending on your circumstances.
The Capital One Classic credit card is ideal for anyone looking to fix a bad credit rating or build credit. To be eligible for this credit card, you must have some history of managing your credit. However, you don't need to worry if you've had county court judgements or defaults in the past. So, this credit card is ideal if you've got bad credit and looking to improve it.
You can benefit from an interest-free period for up to 56 days on purchases if you continue to pay the balance in full and on time. Additionally, if you stay up-to-date with your monthly repayments, Capital One rewards you with up to two optional credit limit increases per year for good card management.
Leading Credit Card for Unemployed and Low-Income People: The Verdict
If you decide to get a credit card, it can help you build your credit record, making a massive difference in your future life and financial decisions.
A good credit score can make you a more promising candidate for getting a mortgage, applying for loans, and more. Working on your credit rating as soon as possible will help build you a brighter financial future.
Before you start improving your financial situation, consider the following before you fill out a credit card application:
- Affordability: ensure you have enough money in savings or some form of steady income like benefits or pension that can guarantee you can afford to pay back what you borrow on a credit card.
- Eligibility: do you need the credit card's eligibility criteria? Applying to many applications at once can further damage your credit history, so always check for an eligibility checker beforehand to save yourself time and harm to your credit file.
- Other options: if you're looking for a quick fix to borrow money, other financial tools may be more suitable, like guarantor loans. A guarantor loan does not depend solely on your credit report and usually has lower interest rates than credit cards. Equally, other types of credit cards may be a better option, like a cash advance credit card.
- Employment status: although credit card providers may allow applicants to be unemployed, they are considered a higher risk borrower than someone with a regular income. You must afford to repay the monthly balance and ensure that your credit fits into your monthly budget.
- Credit score: Your credit score plays a huge part in credit card approval, so you should improve it the best you can. Applying for a credit builder card would help you improve your credit report, and you could go from a bad to a good credit rating.
So, the final verdict is yes, you can get a credit card if you're unemployed, self-employed, or have a fluctuating income. As long as you make timely payments, you should be able to create a more positive credit record.
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