When COVID-19 first hit the US in the early spring, lawmakers quickly implemented a series of measures to buoy the economy and the millions who lost their jobs or experienced reduced hours or wage cuts. But now that most of these provisions are over, these individuals — including yourself perhaps — have limited financial support.
Some have turned to credit cards to make ends meet. But if you didn’t have one before losing your job, getting approved can be difficult. However, that doesn’t mean it’s impossible. There are more options than ever when it comes to credit cards for the unemployed, low-income earners, or individuals with bad credit.
Some credit card companies have loosened restrictions or modified their policies, allowing people to secure a line of credit. Credit cards are no longer exclusive to people with steady jobs and perfect credit scores. Previously ineligible applicants can choose from a variety of credit builder cards.
Uwitch.com explains what you need to know about credit cards for the unemployed.
How To Get A Credit Card When You Are Unemployed
Unemployment can happen for any reason and at any time — which is more apparent than ever. Because everyone faces different financial challenges, there isn’t a credit card designed specifically for individuals who lose their jobs or have a low income or poor credit. Instead, the lender will base their decision on the details you give and your previous credit history when you apply.
What Help Can Credit Card Issuers Offer During The Pandemic?
Credit card issuers, mortgage companies, and other creditors are aware of the financial burden brought on by the coronavirus. By law, some lenders must offer hardship programs for struggling customers, although some offer them regardless. These can include deferral or forbearance periods or some other break.
If you lose your job or experience some other type of income disruption, the first thing to do after filing for unemployment is to contact your credit card company. Your lender should be willing to help and discuss your options. And if you’re concerned about your credit, don’t worry — coronavirus hardship programs will not hurt your score.
What Is The Best Credit Card For The Unemployed?
If you are self-employed or have an unstable income right now, you have several options available, depending on your financial situation. But if you’re not earning anything at the moment, you may have a much harder time qualifying.
Just as you would with any credit card, before applying for an unemployed card, compare different issuers’ terms, restrictions, and interest rates. Doing so can help avoid needlessly hurting your credit rating if lenders reject you.
Look for secured credit cards, as they have the best chances of approval. Or, if you still have good credit and consistent income — such as unemployment benefits, trust fund distribution, scholarships, etc. — you could consider credit cards that offer cash back or long-term financing.
Here are WalletHub’s top credit cards for unemployed people:
Discover it Secured
Earn 2% cashback when you spend $1,000 or more on dining and gas every quarter and an extra 1% on everything else. Discover will also match the total amount of cash back you earned during your first year. You pay $200 to open an account, but there’s no annual fee, and you can qualify even with bad credit.
Capital One Secured
The Capital One Secured credit card doesn’t offer a rewards program like the Discover it Secured, but you do have more flexibility when it comes to the initial deposit. Depending on your credit history, you pay $49, $99, or $200 to open an account. You don’t have to worry about an annual fee, and Capital One will consider your application even if you have bad credit.
OpenSky Secured Visa
With the OpenSky Secured Visa credit card, you pay $200 to open an account and a $35 annual fee. There’s no credit check to apply, but there’s also no rewards.
Citi Double Cash
Earn 2% cash back on everything (1% at the time of purchase and 1% when you pay your statement) and pay no interest for 18 months on balance transfers (except a 3% fee). Because the Citi Double Cash is an unsecured credit card, you need to have good credit. However, that means no deposit, and you don’t pay an annual fee.
Bank Of America Cash Rewards
If you filed an application online and spent at least $500 within 90 days after opening your account, you’ll receive a $150 bonus. Plus, you can earn 3% cash back on the first $2,500 you spend at the gas station, supermarket, and wholesale clubs every quarter. After that, you can still get 2% back at the grocery store and wholesale club and 1% on all other purchases.
Plus, when you deposit your cash back rewards into your Bank of America checking or savings account, you’ll qualify for a 10% bonus. There’s no annual fee, but you must have excellent credit.
Capital One QuicksilverOne
The Capital One QuicksilverOne gives you 1.5% cash back on everything. You pay just $39 per year, but you can qualify even if you’re new to credit or have fair credit.
HSBC Gold Mastercard
With the HSBC Gold Mastercard, you can enjoy 0% APR for the first 18 months, including purchases and balance transfers. There is a 4% charge for balance transfers, but there’s no annual fee. This card doesn’t offer a rewards program, and you must have good credit.
- Jamieson, Marshall. “What Are the Best Credit Cards for Unemployed People?” WalletHub, 15 May 2018, wallethub.com/answers/cc/best-credit-cards-for-unemployed-people-2140664510/.
- Martin, Tom. “Credit Cards for the Unemployed.” Edited by Florence Codjoe, Uswitch, 18 Sept. 2020, www.uswitch.com/credit-cards/guides/credit-cards-unemployed/.