What’s the best credit card for low-income earners?

When life comes knocking, having instant access to credit can be a huge lifeline. And although there are plenty of exclusive triple platinum cards out there that are only available to high rollers, the truth is there is also a range of credit cards designed for individuals on a low income.

When you apply for a credit card, you’ll generally need to enter details about your existing income. But having a low income doesn’t hurt your credit score, so it shouldn’t affect your ability to get approved for a credit card. You just have to do your research and find the best credit card for low-income earners.

That’s where we come in.

This guide explains why building credit is important, whether having a low income affects your credit score, and the three best credit cards for low-income earners.

Why is it important to build your credit?

Before we speed right into the best credit card for low-income earners, let’s pump the brakes for just a minute and talk about why building credit is so important in the first place.

Every time you want to get a financial product like a credit card, a loan, or financing for a big purchase, your lender or the credit card issuer you’re purchasing from is going to want to check your credit history. More specifically, your lender or credit card issuer will want to know your credit score.

Having a decent credit score with a positive credit history shows lenders that you pay your bills on time and spend responsibly. As a result, you’re more likely to be approved when you apply for a new financial product like a car loan or a mortgage.

More importantly, good credit will often sweeten the deal you are offered — meaning that a better credit score will often help you secure a lower interest rate or a longer repayment term. With a low interest rate, you’ll save money because you’ll end up repaying less over the course of your loan.

By contrast, defaulting on a loan, late payments, or delinquent accounts will stand out as a red flag. Believe it or not, employers have been known to pull credit reports. That means your credit history could mean the difference between getting a job or not.

Can you have a credit card on a low income?

The short answer is: yes, you can get a credit card if you’re on a low income. But as always, there’s a little more to it.

Having a low-income job (or even being unemployed) isn’t going to stop you from getting a credit card. A wide range of credit cards are designed for those on low incomes or those looking to build their credit scores back up.

That being said, you may not get offered the best credit card on the market (or even the best interest rate) if you’re on a low income. It’s also pretty important that you think very carefully before getting a credit card. After all, taking on debt may not be a responsible decision if you’re not working — as this could mean even bigger financial problems in the future.

But if you feel like you’re in a position to take on a credit card and want to use it responsibly to build your credit score, a credit card can be a great option to boost your financial capability.

In terms of your credit score, it’s worth noting that your income has no direct impact on your credit score. That means you can have an amazing credit score even if you’re not earning very much money.

But if you suffer from a sudden loss in earnings or a reduction in the hours you’re getting at work, it could hinder your ability to make on-time payments — and that will definitely hurt your credit score.

What’s the best credit card for low income earners?

At the end of the day, you don’t need to be on a high roller’s salary to get a credit card.

There are plenty of credit cards available that are designed specifically for individuals with low income. A lot of these products are secured credit cards that focus on helping customers build credit over time, while others act more like traditional unsecured credit cards and simply give you access to extra spending power.

Because there are so many options out there, it’s really important that you understand what type of credit card you’re looking for, what you want to use it for and do your research before applying.

Here are a few of the standout options on the market to help you get started on your search for the best credit card for low income earners.

Best credit card for low income students: Discover it Student Cash Back

The Discover it Student Cash Back credit card could be a smart option for college students and young adults trying to build up a credit history and earn a few perks along the way.

Unlike some other unsecured cards aimed at those on a low income, Discover doesn’t require you to have a credit score to apply. That means you’ll likely qualify for the Discover it Student Cash Back card even if you’re straight out of high school.

So, what makes this card stand out from the competition?

Above all else, you get cash back.

Discover will give you 5% cash back on all of the everyday purchases you make. That means cash back at grocery stores, dining at restaurants, filling up at gas stations, or shopping online at Amazon. You’ll also get 5% cash back every time you use Paypal.

Better yet, Discover automatically matches all the cash back you earn at the end of your first 12 months with the card — which means you could instantly turn $250 into $500 worth of free money.

That’s pretty generous because Discover doesn’t impose minimum spending or maximum rewards. They offer a dollar-for-dollar match no matter how much you’ve spent or earned already.

There’s no annual fee with the Discover it Student Cash Back credit card, and you get a 0% APR promotional rate for your first six months. After that, you’ll go onto a standard variable purchase APR.

Best low income credit card with 0% APR: Wells Fargo Reflect Card

If you’re looking for a credit card that you can use to make big purchases and spread the cost over time, you’ll want a 0% interest credit card — and if you’re on a low income, your best option is probably going to be the Wells Fargo Reflect credit card.

Wells Fargo offers 0% APR for 18 months on eligible purchases and a 0% introductory rate on balance transfers. If you use your card responsibly and make all of your minimum monthly payments on time, you may even qualify for an intro APR extension of three months after your initial promotional rate has ended.

With the Wells Fargo Reflect Card, there's no annual fee. You'll also get up to $600 worth of cell phone protection if you pay your monthly cell phone bills using your Wells Fargo card (although there's a $25 deductible if you do need to make a claim).

Using the Wells Fargo Deals portals, you can also get regular discounts on eating out or shopping at certain stores.

Best credit card for those without a credit history: Petal 2 "Cash Back, No Fees" Visa Credit Card

If you have little-to-no credit history and you’re not a college student, one of your best bets is going to be the Petal 2 “Cash Back, No Fees” Visa Credit Card.

As the name implies, this card offers no late fees, annual fees, foreign transaction fees, or other types of fees. It also doesn’t require a refundable security deposit.

Unlike some of the other cards we’ve talked about, you’re not going to get a 0% interest period with this one. Variable APRs range from 15.24% to 29.24%, and the rate you’re offered will depend on whether you have a credit history or not.

If you don’t have a credit score yet, Petal will create a “Cash Score” for you to decide what sort of rate and limit you qualify for.

Regardless of the rate you’re offered, this card will give you 1.5% cash back on eligible purchases after you’ve made 12 on-time monthly payments. A lot of credit-building cards don’t offer cash back, so this is a pretty good perk. You can even get up to 10% cash back at select merchants designated by Petal.

Credit limits for the Petal 2 card start at $300 and can go up to $10,000 — so if you’re looking for credit cards with high limits, this might be a good fit.

Petal reports positive credit behavior to all three major credit bureaus (TransUnion, Equifax, and Experian), so this is a good card to help you improve your credit over time.

Conclusion

You shouldn’t let your lack of bad credit history or a low income stop you from working to build your credit. Many credit cards are designed for low income earners or those with bad credit.

You just have to know what to look for in a credit card and make sure the card you’re applying for is going to be right for you.

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