Understanding Income and Other Factors for Credit Card Applications

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What Counts as Income on a Credit Card Application?

When applying for a credit card, one of the key factors that issuers consider is your income. This is to ensure that you have the financial means to make credit card payments. Even if you are a college student without a substantial paycheck, you might still qualify for a student credit card.

Most card issuers do not publish minimum income requirements for student cards, but having a higher income increases your chances of approval. Employment income is not the only type of income that counts. Income from grants, scholarships, and other sources can also help you qualify. Here’s a breakdown of what can be considered as income on a credit card application:

Grants and Scholarships

If you receive grants or scholarships for school and have money left over for daily expenses, you might be able to include that income on your application.

Student Loans

Student loan funding that exceeds tuition and fees may be considered income. For example, if you receive $10,000 in loans for a semester and your school costs are $8,000, the remaining $2,000 could be accepted as income, depending on the card issuer.

Allowances

Money that parents or relatives regularly deposit into your personal account may also be considered a source of income.

Public Assistance, Alimony, or Child Support

Card issuers may accept financial support you receive from assistance programs, alimony, or child support as income.

Employment Income

The money you earn from full-time or part-time work is another source of earnings you can include on your credit card application.

Household Income

If you have a partner or spouse contributing to your household income, you may be able to include their additional income in your credit card application, provided you are over 21 years old. If you are under 21, only your personal income can be considered.

When completing a credit card application, it is crucial to be honest and not overstate your earnings. Misrepresenting your financial situation to get approved for a credit card is a form of fraud and can result in immediate rejection, fines, jail time, and other consequences. Submitting a truthful application helps card issuers properly assess the credit limit you can manage, which benefits you. If you receive a high credit limit and use it without the cash flow to make payments, it can result in debt that is hard to pay off.

What Other Factors Matter for a Credit Card Application?

Income is just one factor considered in a credit card application. Here are other variables that will impact your approval odds when applying for a student credit card:

Age

The minimum age to get a credit card is usually 18 years old, as that is typically when you can enter a contract. However, it can be easier to qualify for a credit card after your 21st birthday.

Credit Score

Your credit scores are based on the credit history that appears on your credit report. Issuers of student credit cards understand that student applicants may have limited credit history or no credit, so credit eligibility criteria can be flexible. However, having poor credit could still affect your ability to qualify, and having stronger credit may improve your chances of getting approved with a better interest rate. If you do not have enough credit history for a score to be calculated, you can use tools like Experian Go™ to establish your credit and become scoreable.

Debt

Other debt payments you are managing can affect your ability to qualify for new credit since juggling those existing payments could make it harder for you to keep up with a new credit card payment.

School Enrollment

Some card issuers require proof of enrollment in school during the card application process before approving you.

Student Credit Cards Can Be a Good First Card

Student credit cards tend to be a good starter card option if you are working to build credit from scratch. Note that student credit card limits could be less than $1,000, so your purchasing power may be limited.

Keeping your card usage low and establishing a good payment history on a student credit card could help you eventually qualify for a major credit card with a higher credit limit. Shopping around is the best way to find student credit cards that meet your needs and credit profile. With comparison tools, you can receive offers that match your credit profile, allowing you to compare card requirements, terms, fees, and reward offers before applying.

At O1ne Mortgage, we are here to assist you with all your mortgage service needs. Call us at 213-732-3074 to speak with one of our experts today.