Oftentimes, when a person is receiving unemployment benefits, he may wish to take out a credit card. Used judiciously, credit cards can be a good source of short-term loans that a person can use to pay bills. However, credit cards are not a right. Finance companies will generally only offer cards to clients who they believe are capable of paying the loans back. A person living on unemployment benefits may, therefore, have trouble getting a card.
Unemployment Insurance
When a person is receiving unemployment insurance, he is making only a portion of the amount of money he was earning when he was working. In addition, he can only receive benefits for a limited period of time. As of March 2011, a person could receive unemployment benefits for a maximum of 99 weeks. This reduced, temporary income may make the person appear a credit risk to credit card companies.
Credit Card Eligibility
When deciding whether to issue a person a card and, if so, a card at what rate of interest, a credit card company will look at various measures of an individual's creditworthiness. Foremost among these factors is an individual's credit rating, but companies will also look at his current income. If a person is making too little money, a company may refrain from issuing him a card, as he poses too high a risk of default.
Lender Policies
Whether a person can receive a card will come down to lender policies. While some companies will refuse to issue a card to someone receiving unemployment benefits, others may be willing to take a chance, particularly if the person has a good credit rating. In addition, if the person wishes to build up his credit rating, he may wish to take out a secured credit card, one with a credit limit equivalent to the money the person sets aside in an account.
Considerations
A credit card company will not know a person's only form of income is unemployment insurance unless the person tells it. This is because the fact that a person is receiving unemployment benefits is not a matter of public record, and is not listed on a person's credit report. A person may be tempted to lie on his credit card application about his income. However, doing so is illegal and could put you at risk of various penalties.
0 comments:
Post a Comment