Home / Money Articles / Can you get a Credit Card if you are on benefits?

Can you get a Credit Card if you are on benefits?

should I cancel unused credit cards

Written by:

Whether you’re moving house and need some new furniture, your car needs some essential repairs or you just want to pay for goods online, there are times when a credit card would be useful. However, if you’re on benefits it’s not always easy to get accepted for one. There are some options available to you, depending on your previous credit history.

Traditional Credit Cards

Recent research by Confused.com found that there has been a considerable increase in the number of credit cards that accept unemployed people and those on low incomes. Between July 2011 and July 2012, there was a 26% rise in cards available for unemployed people (a choice of 23 cards). Lenders have also reduced their minimum income criteria on many cards, with the average now standing at just over £9,000 a year.

Beware of high interest rates

If you’re applying for these cards it’s important to remember that the interest rates and charges will usually be much higher than for those with larger salaries. You will also start with a lower credit limit. However, if you continue to pay off the balance at the end of the month you may be accepted by more lenders and be able to obtain a larger limit.

As more people become unemployed or have less than perfect credit scores, the rules on who lenders will accept have become slightly relaxed. Your chance of being accepted for the best rates, though, will still depend on how credit worthy they think you are. Therefore, it’s always best to pay off balances on a monthly basis and stay within the credit limits.

What if you’ve got a Poor Credit History?

If you’re on benefits and don’t have a good credit history, then the options open to you will be more limited. However, there are lenders out there who offer cards for people in these circumstances. Most of the major high street banks have more stringent criteria, but if you use the online comparison sites you’ll be able to compare the rates of cards for people with bad credit. There are even some cards that will accept people with CCJs and previous bankruptcies.

These credit cards can be used if you want to start rebuilding your credit score. They often charge extremely high interest rates, but if they’re used sensibly they can be of benefit. The trick is to pay off the balance on time every month and not go over your limit. This way they won’t charge you any interest: some cards can have an APR of over 30%.

Can you get a credit card if you are on benefits?

Prepaid cards

The other alternative is to use a prepaid card. The beauty of these is that everyone is guaranteed to be accepted, but they can be costly. The majority of cards charge an application fee and then either have a monthly charge or you pay for transactions.

Build up your credit score

If you choose the correct card, they can help to build up your credit score, allowing you to apply for a more beneficial rate. For consumers on benefits, who want a way of paying for items online these can be a good choice.

Can you afford a credit card?

Whatever type of card you apply for, it’s always worth considering if you can afford the monthly repayments. If you can’t pay off the balance each month, they can end up becoming an unmanageable debt.



4 Responses to “Can you get a Credit Card if you are on benefits?”

  1. Anneliese welsh

    I’m looking for a credit card and can’t seem to get one as I’m on benifits

  2. Anneliese welsh

    Hi I’m looking for a credit card and can’t seem to get one as I’m on benifits


About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

View all posts by