A salary is typically regarded as the primary criterion for eligibility as banks and financial institutions typically prioritise income stability when evaluating credit card applications. This requirement of a regular income may deter many individuals such as freelancers, students, homemakers, or retirees from accessing credit card facilities. Yet, various methods and tailored solutions have now emerged to address this disparity in eligibility criteria.

For instance, secured credit cards offer a viable option for those lacking a conventional salary. These cards are backed by a security deposit. The deposit serves as collateral and helps people without regular income streams to access credit facilities. Bankbazaar’s latest report – How to get Your First Credit Card — highlights several factors offering you a solution to avail a credit card even when you have no regular income.

Let’s go through all the options available and what should be done to avail credit cards without regular income!

Pledge Your Fixed Deposits

You can utilise your existing fixed deposits as collateral to secure a credit card with a credit limit of up to 90% of your FD amount. While your FD continues to accrue interest, in the event of non-payment of bills, the bank deducts the outstanding amount from the FD balance.

Also Read: Retire Rich: How to retire with a corpus of over Rs 1 crore

Add-on Card

Have your spouse or parents apply for an add-on card on your behalf. The credit limit remains consistent for both primary and secondary cardholders. The primary cardholder is responsible for providing the ID and address proof details and is obligated to make payments.

Student Credit Card

If you’re a college student, you may be eligible to apply for a credit card from various banks. Many banks offer credit cards specifically designed for students. To qualify, students typically need to have a trust fund, financial assets, or investments. Additionally, some banks prefer issuing student credit cards to those who maintain an account with them with a sufficient balance, ensuring their repayment capacity. It’s advisable to research and compare the student credit card offers available from different banks to find the one that best suits your needs.

Secured Credit Card

A secured credit card is an excellent option for those without a full-time job, including self-employed individuals or those with non-salary income sources. To obtain a secured credit card, you need to provide funds as collateral. This amount serves as a security deposit for the credit card. In case of repayment failure, the outstanding amount is adjusted against the security deposit.

Enhancing Creditworthiness

Even without Income Proof, you can take measures to boost your creditworthiness. Establishing a robust credit profile heightens the likelihood of qualifying for credit cards and other financial products down the line.

Bank Account

Maintaining a bank account showcases financial stability, bolstering your credit card application. It provides credit card issuers with a reliable reference point, particularly in case of default.

Disclose Your Earnings

If you earn income through freelancing or unconventional sources, it’s crucial to disclose all sources. This contributes positively to your credit score, heightening the likelihood of qualifying for a credit card without a formal income proof.

Credit card issuers may also consider their track record of consistent bill payments such as rent, utilities, or phone bills, as evidence of financial responsibility. It’s advisable to maintain up-to-date documentation showcasing your consistent payment history and responsible financial records.

Timely Payments

Timely payments of debts hold paramount importance when applying for a credit card due to several reasons. Firstly, your payment history accounts for a significant portion of your credit score, which is a crucial factor considered by banks when assessing your creditworthiness. Timely payments demonstrate financial responsibility and reliability, thereby enhancing your credit score.

Secondly, banks rely on your repayment behavior as a predictor of your future repayment capacity. By demonstrating a track record of punctual payments, you reassure lenders of your ability to manage credit responsibly, thereby increasing your chances of approval for a credit card.

Pankaj Bansal, CBO, BankBazaar.com, says, “You can receive a higher spending limit on your card by paying back your dues in a timely manner.”

Moreover, a history of late payments or defaults can significantly tarnish your credit report and reduce your credit score, making it challenging to qualify for credit cards or other financial products in the future. Therefore, maintaining a clean payment record is essential for building a positive credit profile, which is essential for accessing credit facilities like credit cards.