29 DECEMBER, 2021

The covid-19 pandemic has swept across the world, leaving everyone facing multiple challenges like loss of jobs, unstable income, salary cuts, and massive layoffs even at the most reputed organizations in India. This has resulted in creating a pressing need for many people to resort to loans and credit cards to help them sail through the financial challenges.

While when you have a job, applying for a credit card is pretty easy, it only gets challenging when you don’t have a job or lose it. This happens because banks and credit card issuers do a detailed check on your income and employment status before issuing you a credit card to be assured of repayment and rule out any possible chances of loan default. Banks prefer to verify the documented source of income like a salary slip or bank statement and income tax returns (ITR) before they go on to approve your credit card application. One crucial point here is to always compare credit cards from leading banks before applying for one.

What happens when you lose your job or don’t have a stable source of income that comes with a job? Will you still be considered by banks to approve a credit card? The answer is yes; you can still manage to get a credit card without a job as long as you’re meeting the credit card eligibility. However, it gets challenging to get credit card approval if you don’t have a job, but it’s not an impossible task either. You’d still get a credit card but with some terms and conditions.

Here are a few ways you can secure a credit card even if you’re unemployed or don’t have a stable income source:

1. Student Credit Card

If you’re a student studying in a college, you’re eligible to apply for a credit card from banks. Many banks offer first credit cards to students, and all students need to do is have a trust fund, any financial assets, or an investment to qualify. Some banks prefer to give student credit cards to those who have an account with them with an adequate balance to ensure their repayment capacity. It is advisable to look around and research the student credit card offers available with the banks and choose the one that best suits your needs.

2. Showing Income Proof

Earning is more important than being employed. All banks and credit card lenders are concerned with applicants having a stable inflow of income into their bank accounts than working full-time. If you’ve substantial income from other sources regularly entering your bank account, you don’t need to be concerned about not getting approved for a credit card.

All you need to do is submit the income proofs and disclose the nature of such income with the banks while submitting the credit card application. Such income sources could be rental income, royalty, alimony, child support, small-scale home-grown business, and more so. Additionally, you could also be asked to submit your income tax returns during the credit card approval process.

3. Add-on Credit Card

If you’re a minor, you can easily get a credit card in your parents’ or an adult’s name. Most banks offer the facility of an add-on credit card to the primary credit cardholders to pass on to their kids, spouses, friends, and more. Such add-on credit cardholders don’t need to be working to attain the same. All the benefits applicable to a primary credit card holder are also available to the add-on cardholder. The responsibility of bill payment in such cases lies with the primary cardholder.

4. Secured Credit Card

A secured credit card works wonders for those who don’t have a full-time job and are self-employed or have income coming in from other sources than salary. One needs to have the funds available as collateral or security to pledge against the credit line. The amount acts as a security deposit to get you issued a credit card, and in the event of a repayment failure, the amount is adjusted against the security deposit.

5. Having a Co-Signer

A co-signer is a guarantor that signs on your credit card application. If you have a low credit score and the co-signer on your application has a high credit score, you’re approved for a credit card without any hassles. A co-signer takes a guarantee of card repayments on your behalf, and if there are any delays and missed payments, his credit score is also affected. Most banks accept parents and guardians only as co-signers.

Not having a job shouldn’t pose a barrier to getting credit card approval if your credit score is decent and a stable source of income to pay your credit card repayments. The options mentioned above are readily available for credit card approval without a job.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.