Some card issuers which serve people with bad credit or limited credit, like Deserve, may also require access to your bank account to check the balance themselves. This is because they want to ensure that people with less-than-great credit have the ability to pay their debts, and typical credit scoring systems won’t provide this information.
Issuers reportedly might also check that your income makes sense in the context of your employment. They’re probably not, however, going to call your employer or the IRS.
But that doesn’t mean you should lie on your credit card application. Technically, doing so would amount to loan fraud, a serious crime – and could land you hefty fines or even jail time.
Although it’s extraordinarily rare, it does happen: One man paid nearly $50,000 in fines for falsely inflating his income on credit applications, and another got five years in prison.
That could lead you to rack up high-interest credit card debt you can’t pay back. And, if you eventually declare bankruptcy, those lies could prevent you from receiving discharges of your debt.
Insider tip
A recent Credit Card Insider survey revealed that 61% of Americans believe income directly impacts your credit scores. It doesn’t. However, your credit limits do affect your utilization ratio, which means your income may play an indirect role in the scoring process.
It’s tough to answer the question “What should my credit limit be based on income?” because so many different factors are involved, including:
- Credit history and scores
- Debt-to-income ratio
- Employment and housing status
To give you a ballpark range, here are the average credit limits for various scores, according to CNN Money and Experian:
As you can see, the higher your scores, the higher your credit limit generally is. Having a higher income and low DTI will also help.
Insider tip
Before applying for new credit, it’s smart to check your credit scores and credit reports. You can also see if you’re pre-approved for any credit card offers.
Can You Get No-Income Credit Cards?
If you’re trying to apply for a credit card without income, we’ve got some bad news: They don’t really exist.
It’s virtually impossible to get a credit card with no annual income. Your best option would be to explore secured credit cards. These require you to pay an upfront deposit that, in most cases, then serves as your credit limit.
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If you have no income, and plan to rack up charges without paying them off, we’d urge you to avoid credit cards altogether. Because of their high interest rates, they’re an extremely unforgiving form of loan.
Case in point: Even if you somehow managed to get an 18% APR credit card with a $1,000 limit, and then maxed it out and only made the minimum payments, you’d spend $798 in extra interest, and it would take you ten years to pay off. Um, thanks but no thanks.
Instead of looking at credit cards as an emergency fund, focus on repaying debt and increasing your income. Then, when you’re ready, apply for one of the best credit cards available that’s right for your particular situation.
Susan Shain
Susan is a freelance writer who specializes in turning complex financial topics into engaging and accessible articles. She’s been writing about personal finance for six years, and was previously the senior writer at The Penny Hoarder and a staff writer at Student Loan Hero. Her personal finance writing has also appeared in publications like MarketWatch and Lifehacker.
The responses below are not provided or commissioned by bank advertisers. Responses have not been reviewed, approved or otherwise endorsed by bank advertisers. It is not the bank advertisers’ responsibility to ensure all posts are accurate and/or questions are answered.