Key takeaways

The CARD Act of 2009 pushed for issuers to make sure that credit card applicants would be able to pay off their card bills should they be approved.

This led to issuers creating their own rules about how much income is required to get a credit card, as well as guidelines for related factors like credit limits and debt-to-income ratios.

Whether you satisfy the income requirements for an issuer or not depends on the card you're applying for, but in general, you'll have better approval odds if you have a low debt-to-income ratio and you put all eligible income on your application, including any tips, allowances or spousal income at your disposal.

Getting a credit card opens up many possibilities, like the opportunity to build credit, have immediate access to funds, earn lucrative rewards and much more.

The only thing standing between you and these opportunities is a credit card application approval -- and to get that approval, you typically have to answer questions about your annual income. If you're a student or a stay-at-home spouse, or if you're unemployed or have no or low income, trying to report your income on a credit card application may cause some anxiety.

But you shouldn't let income alone keep you from applying for a credit card. What counts as income and how much you need to qualify for a credit card may surprise you. Here's what you need to know about income requirements for a credit card.

Income terms for card applications

The annual income question was introduced with the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) as a way to protect consumers after the Great Recession.

The CARD Act states: "A card issuer may not open any credit card account for any consumer under an open end consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account."

Under the CARD Act, card issuers must make sure that cardholders can afford to pay off their balances, or at least keep up with minimum payments, which are calculated each month based on the card's outstanding balance. Therefore, your income helps issuers determine your credit line and whether or not you'll be able to make payments.

The CARD Act does not, however, dictate a minimum income requirement, which means that it's up to the discretion of card issuers to decide.

Factors that can impact your credit card income requirements

The tricky part for applicants is that card issuers don't typically publish minimum income requirements, since income alone is an incomplete measure of an applicant's financial well-being. It's just one factor of a more holistic measure of a cardholder's ability to make a minimum payment, referred to as the debt-to-income (DTI) ratio.

Debt-to-income ratio

Your debt-to-income ratio shows how much money you owe versus how much money you earn. If you earn a great living but you have too much debt, you could be rejected for a credit card.

So, what's considered too much debt?

While credit card issuers determine their own requirements for DTI ratios, the Consumer Financial Protection Bureau (CFPB) has suggested a maximum DTI ratio of 43 percent to qualify for a mortgage. However, the CFPB has recommended that homeowners keep their DTI ratio at 36 percent or less and that renters keep their DTI ratio at 15 to 20 percent or less. So, these figures are usually taken into consideration when credit cards are in question.

You can calculate your DTI ratio by dividing your total monthly debt (car payments, child support, mortgage payments, alimony, student loans, etc.) by your monthly income.

DTI ratio example

Let's say that every month, you owe $1,600 total for debts like student loans and car payments. If your monthly income is $2,500, your DTI ratio would be 64 percent, which might be too high to qualify for some credit cards. With an income of roughly $3,700 and the same debt, however, you'd have a DTI ratio of 43 percent and would have better chances of qualifying for a credit card.

If you have no credit history or poor credit and are unsure if you'll be able to meet minimum monthly payments, you could consider applying for credit cards geared toward those with no or bad credit specifically, such as secured credit cards. These types of cards require you to pay a refundable security deposit upfront that typically serves as your credit limit.

Student status

If you're a registered student at a college or university, then you have an opportunity to apply for student credit cards. These credit cards are great tools for building credit when used responsibly, but their requirements differ from traditional cards. Credit card issuers have different rules and guidelines for those showing income as a student, and those rules largely depend on age.

If you're between the ages of 18 and 20, you'll generally need to show proof of independent income or have a guarantor (typically a parent or guardian) who can guarantee payment. Besides income from a job, you may be able to count regular allowances or money that's left over from grants and scholarships after tuition is paid.

If you're a student aged 21 or older, you likely won't be able to get a credit card with a cosigner. Instead, you can show income from part-time or full-time employment (tips count), self-employment, recurring gifts or allowances, spousal income and residual funds from scholarships and grants.

Issuer-specific policies

The CARD Act doesn't set income requirements, which means these requirements are up to the discretion of card issuers. Some issuers have concrete income minimum requirements, as well as debt-to-income ratio limits and minimum credit limits, all of which would affect your ability to get a credit card.

For example, Capital One requires applicants' income to be at least $425 per month higher than their monthly mortgage or rent payments in order to be eligible for the Capital One SavorOne Cash Rewards Credit Card, according to the issuer's terms and conditions for this card at the time of writing.

The Wells Fargo Autograph? Card, on the other hand, outlines a minimum credit limit of $1,000 according to the card's terms and conditions at the time of writing. So, if your income is too low for you to be approved for a $1,000 monthly credit limit, then you'll likely be rejected for this type of card.

Learn more:

Should you give income updates to your credit card issuers?

What happens if you lie about your income on a credit card application?

You shouldn't lie about your income on a credit card application. Issuers can revoke your card if they find out you lied. Plus, if you get approved for a card you can't afford to pay off, you'll end up in debt and hurting your credit, which can prevent you from renting a home, getting approved for a mortgage, opening another credit card, getting approved for loans and more. Lying on a credit card application could even result in up to 30 years of jail time and a fine of up to $1 million.

Acceptable sources of income for a credit card application

Income from a full-time job isn't the only thing that counts as income for a credit card application. You can usually factor any of the following into your annual net income:

Income, wages and tips from a full-time or part-time job, or freelance work

Spouse's income (household income)

Unemployment benefits (occasionally acceptable)

Child support, alimony or separate maintenance income

Grants and scholarships

Social Security income

Retirement fund and pension distributions

Savings account assets

Gifts (occasionally acceptable)

Allowances

Trust fund or inheritance distributions

Investment returns

It's important to note that there are some income sources that are not accepted on credit card applications. The following will not count toward your annual net income:

Loans

Your parents' income

Non-cash assistance (such as for utilities)

Some types of financial aid

One-time gifts

Can you get a credit card if you have no job?

Yes, you can get a credit card if you're unemployed, but your approval depends on the card you apply for and the issuer's rules surrounding employment. In general, card issuers are more interested in your ability to repay your credit card bill, regardless of your employment status -- although you'll still likely see it asked about on an application. If you can still show proof of income, such as a monthly allowance or grant payout, that could be enough for an issuer.

You can also apply for cards with less stringent income requirements, such as secured cards.

The bottom line

While the CARD Act states that cardholders must be able to afford credit card payments, issuers can set their own income requirements, which they generally don't publicize. When deciding whether to approve your application, credit card issuers factor your income holistically into your debt-to-income ratio. This way, they can determine whether you'll be able to make minimum monthly payments.

And if you have no or low income, receive government assistance or are a student, there are a number of income streams you can factor into your net annual income on your credit card application beyond traditional wages.

For the best chances of approval, however, remember to take into account the type of card you're applying for. Secured credit cards and student credit cards, for example, will typically have more lax income requirements than premium cards.