Can You Get a Credit Card on Low or No Income?

In theory, yes. But we should start with the caveat that it’s not advisable to get a credit card if you have no income, and that we’re only putting this out because we get this question often.

Here is the sole alternative for low or no income earners who want a credit card in Singapore, and why they should think very carefully before applying for one.

Why is it difficult for people with low or no income to get credit cards?

This is answered by the fundamental fact that credit cards give you loans. When you have a credit card, you are granted access to money you don’t actually own.

Access to this money is granted with the understanding that you will repay whatever you spend--not only repay in full, but repay it with interest (around 2% per month, to be precise).

Credit cards can be very flexible in how you make these repayments, but you absolutely have to repay it at some point. And if you cannot prove you have some source of income, the bank cannot simply trust that you are able to do so. That’s why credit cards have qualifying criteria.

What are the qualifying criteria for a credit card?

When applying for a credit card, you must meet some requirements. In general you have to be at least 21 years old, and have a minimum annual income - the lowest qualifying threshold is usually S$30,000 per annum.

Foreigners may have much higher thresholds (often twice that of locals), as the bank is taking on greater risk when issuing cards to them--a credit card is an unsecured loan, so the bank has nothing but your word that you will pay them back. Foreigners have more options to leave the country and default (fail to pay) the owed amounts.

You must be able to prove you meet the criteria, either by producing CPF statements, or tax assessments if you are self-employed. If you have alternative income sources (e.g. you rent out a room in your flat, or are getting cash from a legal settlement), you will have to speak with the bank’s credit officer for the terms--these sources may or may not be accepted.

What if you cannot meet the criteria despite your best efforts?

You still have one alternative, in the form of student credit cards. These credit cards have low credit limits of up to S$500, and typically do not come with an income requirement. An example of this is the DBS LiveFresh student card, which has no minimum income requirement.

These credit cards often give you access to points and rewards like regular credit cards. However, they tend to lack features like fast rewards points accumulation, cashback, or air miles.

Should you apply for credit cards if you have low or no income?

If you are strapped for cash and urgently need credit, you might be better off with a personal instalment loan. These loans have a lower interest rate than credit cards (6% to 8%), and it is easier to qualify for than a credit card.

However, you should think carefully before getting any kind loan, if you lack the capacity to repay it. Defaulting on a low will destroy your creditworthiness, and it can have negative consequences far into the future. You will be unable to take out loans for your house, or during critical emergencies. In some cases, you risk being subject to bankruptcy proceedings, which can affect you for decades or for life.