Applying for a credit card when not employed - any issues to be aware of ?

Halfempty

I took voluntary redundancy at the end of September and I am currently looking for work. I always pay my credit card bill on time and I remain in a position to do so. My current credit card provider is removing cashback this month. I want to apply for a credit card which has cashback but I am worried that an application may be refused as I currently don't have a regular income and that my credit rating (which is very good) may be affected. Any thoughts on this?

PARIS_5000

Halfempty wrote: »

I took voluntary redundancy at the end of September and I am currently looking for work. I always pay my credit card bill on time and I remain in a position to do so. My current credit card provider is removing cashback this month. I want to apply for a credit card which has cashback but I am worried that an application may be refused as I currently don't have a regular income and that my credit rating (which is very good) may be affected. Any thoughts on this?

It can be hard to get a prime credit card such as 0% while unemployed. The only credit card that may accepted you will be subprime credit cards such as Vanquis,Aqua and Capital One.

HappyMJ

If you really must apply for a credit card...
Are you registered unemployed? If yes I wouldn't mention it. Could you use some of the redundancy invest in a small business idea and become self-employed? Then you could put the job that you would then do on the application. As you don't yet have an idea of the actual income you could put a figure for the forecast income as you would for the bank when applying for a small business loan.

Doesn't really work for me as my net profit forecast is only £1,800 on £12,000 turnover. My small business pays expenses such as travel, computer, telephone, broadband and a few other bits. It's stuff I would normally use after tax income to pay for so I'm saving most of the £1,800. Because of that I still declare the full £12,000 on any credit applications.

izools

Yes you'll be very hard pushed to get a 0% card whilst unemployed. Your options as far as I can see are to enter the details of your previous employer or wait until you have another job.

It won't damage your credit score to be declined, all that will be left is a record of the fact you applied - not any record of whether you were approved or declined.

What can damage your credit score is a large number of recent applications, so if you've applied for nothing else in the last six months and try your luck at one cashback card; and get knocked back, your score won't be affected.

If however you've already applied for credit searched products in the last six months, e.g. mobile phone contract, british gas, credit card, bank account, etc; and try your hand at several cashback cards you'll definitely have a lowered credit score due to all the recent searches - whether or not you are approved.

Good luck! With the job as well as the card :beer:

chattychappy

izools wrote: »

Your options as far as I can see are to enter the details of your previous employer

That could be a fraud (depending on what is asked).

Halfempty

Thanks everyone. That's really helpful. Think I'll wait till I have a job to apply for another cashback card and stick with the one I've got for now.

starM

chattychappy wrote: »

That could be a fraud (depending on what is asked).

Not always - John Lewis card accepts previous employment -
https://secure.partnershipcard.co.uk/gethelp/help.html#1

We need your employment details to assess your application. Please give details of your primary employment. If you are self-employed, please give details of your company. If you are retired or unemployed you will need to provide details of your previous employment role. If you are a house person, you will need to provide your partner's details, with their consent.

MS

chattychappy

starM wrote: »

Not always - John Lewis card accepts previous employment -

Yep, that's why I said depends what's asked. Sometimes employment isn't asked about - eg those "you've been pre-approved" type offers, often from your own bank.

ILW

HappyMJ wrote: »

If you really must apply for a credit card...
Are you registered unemployed? If yes I wouldn't mention it. Could you use some of the redundancy invest in a small business idea and become self-employed? Then you could put the job that you would then do on the application. As you don't yet have an idea of the actual income you could put a figure for the forecast income as you would for the bank when applying for a small business loan.

Doesn't really work for me as my net profit forecast is only £1,800 on £12,000 turnover. My small business pays expenses such as travel, computer, telephone, broadband and a few other bits. It's stuff I would normally use after tax income to pay for so I'm saving most of the £1,800. Because of that I still declare the full £12,000 on any credit applications.

Sounds like fraud to me.

Hax

ILW wrote: »

Sounds like fraud to me.

My thoughts precisely - lying on an application can't be a "good" thing...

A similar discussion has already been had on here where someone claimed that they could state that they are self-employed and then claim that their salary is £50K as they can make the decision as to what they pay themselves - despite the fact they aren't actually self-employed - they're a student that occasionally does some part-time work.

If there's ever a problem in the future and you need to prove that your application was genuine, you could be asked to provide accounts for your business to show where the profit is made from which you are taking your salary. You can't extract your salary from "future" profits - only from profits already banked.

Otherwise, there would be no point in them asking what your salary is as everyone could put down anything they like: "Well, I'm going to apply for a job that pays £100K so I'll put down £100k on the application" - doesn't wash does it?