Income Rules for College Students Applying for a Credit Card
Before you’re approved for a credit card, card issuers have to make sure you can afford to pay back any balance you might charge. That also goes for college students, many of whom don’t earn a regular paycheck. So you may be wondering: just what are the income requirements if you’re in school? Applying for a card as a student can be tricky, but you do have options.
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 or personal income. Here’s what you should and shouldn’t include.
- Income from a job: This 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 too.
- Money from parents: If you are under 21, you are allowed to include help you may get from a parent or someone else, but it must be income that is regularly deposited into an individual or shared bank account with your name on it.
The federal government made the rules for young adults stricter in 2009 to help them avoid getting trapped with credit card debt they couldn’t afford to repay. Anyone who is at least 21 may include income from someone else (like a spouse or parent) if it’s regularly used to pay the applicant’s expenses. This applies whether there is regularly deposited money 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 you’re not allowed to use loans as income.
You can include alimony and child support in your income, but you don’t have to.
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 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 it is that 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.)
If your credit card application asks for your annual income and you’re paid weekly, multiply your weekly amount by 52. If it asks for monthly income, multiply your weekly amount by 52 and then divide by 12. Also, pay attention to whether the issuer wants gross (before taxes) or net income.
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 even graduated.
Consumer Financial Protection Bureau. "Code of Federal Regulations, Part 1026 (Regulation Z) Subpart 51, Ability to Pay," Accessed Oct. 3, 2019.
Consumer Financial Protection Bureau. "Can a Card Issuer Consider My Age When Deciding Whether to Issue a Credit Card to Me?" Accessed Oct. 3, 2019.
Discover. "Discover It Student Cash Back," Accessed Oct. 3, 2019.
Bank of America. "Credit Cards for Students," Accessed Oct. 3, 2019.
Consumer Financial Protection Bureau. "What Is a Co-Signer?" Accessed Oct. 3, 2019.
Consumer Financial Protection Bureau. "Ask CFPB," Accessed Oct. 3, 2019.
United States Department of Justice. "Criminal Resource Manual 814: False Statements, 18 United States Code Section 1014," Accessed Oct. 3, 2019.