Types of Income Considered
By law, credit card issuers are required to consider your ability to pay before approving your application. Most applications include guidelines about what they want to know, and those vary in detail. All applications will ask for income—sometimes called “total income” or “personal income.” Here’s what you should and shouldn’t include.
Income From a Job
Income is earnings from full or part-time jobs, including seasonal employment, self-employment, or internships. Capital One says if you have a job as part of a work-study program, you should include that as well.
Money From Parents
The rules about receiving funds from a parent are more strict if you are under 21. Young adults are only allowed to include financial help from a parent or someone else if the funds are regularly deposited into an individual or shared bank account with their name on it. For those who are at least 21, however, income from someone else (like a parent or spouse) can be included if it’s regularly used to pay the applicant’s expenses, whether there are bank account deposits or not.
Financial Aid
Many students worried about getting approved for a credit card want to know whether financial aid can be included in their income. Credit card applications often don’t address that question. How you use your aid is a big factor in whether it can qualify as income. The Discover it Student Cash Back card, for example, only lets you include scholarship or grant money if it’s used for living expenses. For cards issued by Bank of America, you’re allowed to include money from scholarships, grants, and financial aid that you have remaining after you cover your direct education expenses, according to a bank representative.
Student Loans
Student loans are a type of debt, not income, and you probably don’t want to start an early habit of paying off debt with debt. Credit card issuers—including Bank of America, Barclaycard, and Capital One—say they don’t let applicants use loans as income, but the rules may vary by issuer. Technically, issuers are allowed to include any student loan proceeds that aren’t used to cover tuition or other bills from the college, such as proceeds used for living expenses.
Getting a Co-Signer or Other Options
If you don’t meet the income requirements on your own, you can still have a family member or someone else 21 or older co-sign with you, as long as the issuer allows co-signers. Just remember that co-signers have the same responsibility for credit card debts; the charges and payments on the card will affect their credit score just as much as yours. Another option is to be an authorized user on another adult’s credit card. Your income isn’t considered at all. Still, you must have a relative or friend who trusts you and agrees to it, just like when you use a co-signer. As an authorized user, you can make purchases, but the credit card issuer won’t require you to make payments on the balance.
How Much Should You Make to Get a Credit Card?
Issuers don’t specify an amount of income you must have to qualify for a credit card. However, the higher your income, the more likely you’ll be approved for the card, and the higher your credit limit will be. (Some may ask for proof of your income, so have a copy of your pay stubs, bank statements, or other income available.) Don’t be tempted to inflate your income so you can qualify for the credit card. Technically, that’s illegal. If you’re caught, you could be prosecuted. Inflating your income also puts you at risk for getting a credit limit you can’t handle. While the thought of a large credit limit may sound great, you don’t want to rack up thousands of dollars in high-interest credit card debt before you’ve graduated.
