How to Qualify for a Credit Card

Do you meet the requirements for eligibility to get a credit card? There isn't a one-size-fits-all answer. Qualification depends on both the card issuer (bank) and the information you supply when you apply. For competitive reasons, banks aren't eager to share their requirements to the public.

That said, having studied many of the best credit cards on the market, as well as the banks that issue them, we have a very good idea of the factors that may affect whether or not you qualify, and how to improve your chances of qualifying and getting approved for a credit card.

1. Your income is the starting point

It doesn't matter if you have an 800 credit score and a perfect credit report that is 20 pages thick -- if you don't have an income, the bank has every reason to worry about getting paid back. For this reason, income is the starting place for qualification.

Age plays a factor in the importance of income at the time of application. People who are under the age of 21 "must provide proof" of "independent income or assets" to show their ability to repay their credit card, according to Discover. That's all thanks to the Card Act of 2009, which made it more difficult for people younger than 21 years of age to get a card. If you're under 21 years old, you'll need to prove you have either income or assets (or both) that will be available to help pay your credit card when the bill comes due.

People who are 21 years or older will find it much easier to get a credit card. The typical credit card application asks for "household income," an annual figure that includes the applicant's income, as well as any other income to which the applicant has "reasonable access." Thus, a spouse's income can be included, making approval more likely.

When listing your household income, consider the following sources:

  • Your wages
  • A spouse's wages
  • Alimony
  • Earnings from investments, gifts, pensions, and government benefits

Having some income is the most basic box to check for getting a credit card. More is always better, of course, but the difference between $10,000 and $20,000 per year is obviously more important than the difference between $100,000 of income and $110,000.

2. Your credit history

Second only to income, your credit history plays an important role in whether or not you qualify for a credit card.

If you have a bankruptcy, judgment, or serious delinquency (30-plus days past due on a bill) in the recent past (last six months), getting a credit card may be very difficult. In this case, your best bet is probably a secured credit card, which requires applicants to put up collateral in the form of a deposit.

Bad credit from the distant past is unlikely to be a concern. Negative marks become less important as they age. After seven years, late payments and other negative events simply fall off your credit report. A late payment three years ago probably isn't indicative of your current financial standing if you haven't had any problems paying on time since then. Thus, banks don't tend to worry about what's happened in the distant past.

3. What do you owe to other lenders?

In addition to your payment history, your existing balances will also be an important consideration for the bank's underwriters. Most credit card applications ask about your monthly rent or mortgage payments. From your credit report, the card company can estimate how much you are required to pay on your existing debts (student loans, car loans, or other obligations, for example).

These figures matter insofar as their relative size compared to your income. The bank knows that if forced to make a difficult decision about which loans to pay, most people will opt to pay their mortgage or car loan and skip a payment on their credit card. For this reason, banks are most concerned about how much money you have left over after paying your other obligations.

For this reason, high income isn't necessarily reason for approval. Someone who earns $4,000 per month and pays just $500 a month for rent would likely be a better risk than someone who earns $5,000 per month and pays $2,000 on rent and other obligations, for example.

As a rule of thumb, the minimum payment on a credit card bill is typically equal to 3% of the balance. Thus, cardholders who carry a $5,000 balance would need to pay at least $150 per month to stay current on the account. Credit card companies use numbers like these to think about whether or not to approve you for a credit card, and how large your credit limit should be.

4. Make your application count by applying for the right card

The single best way to get approved is to apply for the right credit card. Certain types of cards tend to be marketed toward people who fit certain criteria. I generally break down credit card offers into these five categories in the table below:

Knowing a little bit about a credit card can go a long way toward assessing your ability to qualify. Not surprisingly, you'll find that many of's best picks for travel rewards and sign-up bonuses also appear on the list of cards that are best fit for people with excellent credit. If you have some credit issues in the recent past, you should probably shouldn't apply for them.

In contrast, balance transfer credit cards are typically marketed to people who have credit scores from low to good, given that the benefits (0% promo APRs) are most advantageous to people who have existing credit card debt. Having higher levels of credit card debt generally leads to a lower credit score, all else being equal.

Worried about where you fit in? Don't be. Apply for a card that you think best fits your current credit score and income. If you aren't approved, the same bank may recommend a different card that you qualify for.

Realistically, a credit card isn't out of reach for most people. At a minimum, a secured credit card is available to almost anyone, making it an easy way to get approved for a card to start building or rebuilding your credit history.

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Jordan Wathen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.