Can I Still Get a Credit Card on Unemployment?

When you lose your job and begin collecting unemployment benefits, your income is greatly reduced, since unemployment benefits pay between 50 and 60 percent of your average work pay. For many people, this means they have trouble paying their bills. Having a credit card to use would act like a loan and allow you to continue making payments, though you are also creating additional debt for yourself that will have to be paid back.

Regular Credit Cards

You may still be able to get a regular credit card if you are receiving unemployment benefits. The decision on whether you will be given credit will be based on your credit score, income, assets and how much you are paying in mortgage/rent. So if your credit score hasn't dropped because you have not fallen behind in your debt payments, and you are keeping up with your mortgage, you may be able to qualify for a credit card. You will also need to still have a sufficient income with your benefits and a high level of assets.

Prepaid Credit Cards

If you don't qualify for a regular credit card, you may still be able to get a credit card from a bank that specializes in high-risk credit cards. These are cards that are for people with limited credit, such as a person receiving unemployment benefits. Many times, these cards require you to make a deposit to act as a security deposit to protect the bank in case you don't make your credit card payments. These cards are primarily for people who are rebuilding their credit scores, but if you need a credit card and can't get one another way, prepaid credit cards are an option.

Effect on Credit Score

If you are receiving unemployment, it should not affect your credit score. Your credit report does not show if you have filed for unemployment or are making claims. The only way unemployment benefits will affect your credit score is indirectly because you miss payments to your creditors due to a lack of money. This means that unemployment will also not affect your credit score so you no longer qualify for credit cards.

Use Caution

If you are apply for a new credit card while you are unemployed, you need to use caution if you do get one. It would be easy to use the credit card in place of your lost income. This will only add to your debt until the point when your payments on your credit accounts will be impossible to make while you are collecting unemployment benefits. At that point, your unemployment will begin to negatively affect your credit score.