Income Rules for College Students Applying for a Credit Card

Three college students laugh at a table with drinks while one of them holds a credit card
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Before you’re approved for a credit card, card issuers have to make sure you can afford to pay 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.

To help young adults avoid getting trapped with credit card debt they couldn’t afford to repay, the federal government made the rules for people under 21 more stringent in 2009.

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

Income 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 as well. 

Money From Parents

The rules about receiving funds from a parent are more strict if you are under 21. Young adults are only allowed to include financial help from a parent or someone else if the funds are regularly deposited into an individual or shared bank account with their name on it. For those who are at least 21, however, income from someone else (like a parent or spouse) can be included if it’s regularly used to pay the applicant’s expenses, whether there are bank account deposits 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 they don’t let applicants use loans as income, but the rules may vary by issuer. Technically, issuers are allowed to include any student loan proceeds that aren’t used to cover tuition or other bills from the college (proceeds used for living expenses, for example), according to the Consumer Financial Protection Bureau.

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 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 graduated.

Article Sources

  1. Consumer Financial Protection Bureau. "Code of Federal Regulations, Part 1026 (Regulation Z) Subpart 51, Ability to Pay," Accessed March 9, 2020. 

  2. Consumer Financial Protection Bureau. "12 CFR Part 1026. Truth in Lending (Regulation Z) Final Rule. Official Interpretations." Pages 46 and 47. Accessed March 9, 2020.

  3. Consumer Financial Protection Bureau. "12 CFR Part 1026. Truth in Lending (Regulation Z) Final Rule. Official Interpretations." Pages 50 and 51. Accessed March 9, 2020.

  4. Experian Financial Services. "What Is a Credit Card Cosigner and Should You Use One?" Accessed March 9, 2020.

  5. Chase. "Are Cosigners Needed for Student Credit Cards?" Accessed March 9, 2020.

  6. United States Department of Justice. "Criminal Resource Manual 814: False Statements, 18 United States Code Section 1014," Accessed March 9, 2020.