can you get approved while on unemployment?

[Anonymous]

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@Butter41 wrote:

i want to continue to build up my credit, but i am on unemployment. I have had zero job offers and may not work again for several months.

Myfico TU is 670 and I currently have an AMEX zync (8 yrs with AMEX) and a cap1for about 16 months.

Since I'm kind of starting over, my income, when I start working again, will be around minimum wage levels. My current unemployment is much higher than that.

I'm just trying to survive and build my credit. Would anyone approve me with my current situation? I'm thinking an AMEX revolver, Chase Amazon Visa or Discover it

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It should be possible for you to get approved for at least some cards. Being on unemployment, itself, probably isn't a bar to getting credit most of the time. Your unemployment benefits are considered income and should be added to any other sources of income you have when responding to an income question on a credit application. What will make it harder to get credit is that your benefits are a lot less than you were making at your previous job (probably 50% of it or less, and they are generally capped at a statutory maximum). If they're enough that you'd meet income underwriting criteria for the lender there's no reason they wouldn't approve you provided you meet other underwriting conditions.

Some cards simply will not approve you if your income isn't at least a certain amount, and my own state (New York), which is probably one of the more generous states in the union, caps unemployment benefits at around $350 a week if I remember correctly. That would work out to $18,200 if you received benefits for an entire year, although since you are normally only able to receive benefits for 26 weeks that would only be $9,100 in benefits. (If they ask for annual income, you should probably report the $9,100 figure because extended benefits are not guaranteed.)

There are some lenders (e.g. Citibank) that seem to have a hard minimum income for their cards where if you don't make enough money it doesn't matter if your credit score is 850, you have 30 years of 100% on-time payments and you've had no bankruptcies, liens, etc.; if you don't have the inflow of money they require, you don't get approved, period.

Still, there are some others that would approve you, but they may do so at a higher interest rate or lower credit limit (or both) than they would for someone with a higher income. Still, a card is a card, and it's generally my opinion that having a card with a higher APR is better than having no card at all.

Some lenders may ask on their credit application what you do for a living. "Unemployed" is generally the correct response here unless you have some other source of earned income that you can report instead.

[Pilotdude]

Ask yourself this:\

Would you lend money to someone with no job?

Being unemployed is a bit of a stigma.  There is a massive sentiment in the court of public opinion that people on unemployment longer than just a couple months are being lazy and simply not lowering their standards to get a job.  Yes, I believe in this economy that for the most part, that particular sentiment is pure horse dooky...but it is there and many institutions live and die by it.

truth in lending is key for everyone, so I cannot condone misleading a card company about having a job.  However I do know that many do not exactly tell the truth when it comes to their acual income.  Its sorta like the embellishment which occurs on Resume's.

Then there is one more crucial detail, Getting in over one's head.  Taking out credit cards while not having a job is a dangerous game to play.  Its very easy to run up a balance(s) to the point at which one may not be able to make the payments.

If I were you, I might go for only Discover IT and that is all.  I say this simply from the stand point that you can get the card and pay only that which you can pay off in full each month.  IE: Cable bill, electric bill, phone bill etc.  This will help your AAoA in the long run and should prevent over extension.

be careful.

[eviLution]

I was approved for Discover IT when I was a week into unemployment. My job is seasonal so every year I'm usually on unemployment for 2-3 months.

It sucks that I'm gonna be returning to work in 2 weeks, but my Discover is at 60% utilization and that's not good! lol