The Minimum Qualifications for a Credit Card

A credit card can be either beneficial or detrimental to your financial situation depending on its use or misuse. According to statistics compiled by Hoffman, Brinker and Roberts, credit card debt in 2010 totaled $886 billion among U.S. citizens, a number expected to increase to $1.177 trillion in 2011. Because of the responsibility required to manage a credit card, an applicant must meet minimum requirements to qualify for one. Specific numbers vary by issuer, but they can be broken into general categories.

Age

To be the sole borrower on a credit card, an applicant must be 18 years of age in the United States. Some companies allow a borrower under 18 if he has a parent or legal guardian co-sign for him. The limits are usually much lower than those for someone over 18. Another option is prepaid credit cards. A parent or guardian can purchase a card. The amount used to purchase the card is the amount of "credit." For example, if the parent purchases a card for $500, the credit limit is $500. These two options are the only ones available for those under 18. Once an individual reaches 18, he can apply for a card on his own.

Credit Score

Your credit (FICO) score plays a major part in the credit card approval process. There is no stronger indicator of ability to repay credit than your credit history. Borrowers with poor credit, typically 620 and below, find themselves unable to qualify. Even if the credit card company approves them, they likely face extremely high interest rates and low limits. While score is a major factor, there are other red flags on your credit report. Late payments and too many applications in the past 12 months work against you.

Income Level

One provision under the Credit CARD Act of 2009 is a guideline for proof of income. Essentially, a credit card applicant must prove he has the means to pay the monthly credit card bill. This provision prevents applicants with low income from taking out multiple cards, running up the debt and finding they are unable to pay it back. The decision to verify the income ultimately lies with the issuers. They may request documents including, but not limited to, pay stubs, W2s, tax returns, credit reports and account statements.

Other Creditors

Another major factor in qualifying for a credit card is the number of other obligations on your credit report. Multiple credit cards do not work against you if you carry low balances. Multiple cards that are nearly maxed out, however, can work heavily against you. If you are near the top of your limit on your other cards and only make the minimum payment each month, it looks bad. It tells the prospective issuer that you are likely just to run up their card and leave the balance near the top. It can be very difficult to get approved in this situation.