Key Insights
- For students younger than 21, only personal earnings, familial allowances, and leftover scholarship or grant funds after covering tuition and college expenses are valid income sources.
- Once past 21, students can also factor in freelance earnings, household income, and a broader range of financial aid.
- Those without employment have alternatives such as becoming an authorized user, securing a secured credit card, using a credit-building debit card, or enlisting a co-signer.
Embarking on your credit journey as a student? The process isn’t as bewildering as it might seem—there’s a spectrum of credit card choices, and the application process becomes straightforward once you grasp the essentials of what income to report.
Why Income Matters to Credit Card Providers
Credit issuers seek proof of income primarily to verify your ability to meet minimum payments, as mandated by federal regulations. This crucial figure not only influences your approval chances but also dictates your potential credit limit, making it a cornerstone of your application.
For full-time students, showcasing adequate income can be tricky. Understanding precisely what qualifies as income can be your secret weapon to securing that coveted student credit card.
Defining Qualifiable Income for Students
Income reporting rules shift dramatically based on age, so being savvy about your category is vital. Every student can claim wages and allowances; however, restrictions apply for those under 21. They must either demonstrate financial independence to cover minimum payments or have a co-signer aged 21 or older willing to assume liability for the account. It’s worth noting that most top lenders nowadays have phased out co-signed accounts.
So, if you’re between 18 and 20 years old, the only sources you can list as income are:
- Earnings from a job or work-study program
- Consistent allowances from family members
- Residual scholarship or grant funds (excluding student loans) after tuition and college bills
The silver lining? Credit issuers adopt a liberal interpretation of income. It’s not limited to full-time salaries — seasonal gigs, part-time campus jobs, and steady family stipends qualify as well. Plus, leftover scholarship funds after school costs can also count.
— Ted Rossman, Senior Industry Analyst at Bankrate
Income Eligibility for Those 21 and Up
Once you hit 21, the game changes: a co-signer isn’t mandatory, and you can include a broader palette of income sources, including household earnings to which you reasonably expect access. Examples include:
- Wages, bonuses, tips, commissions from full-time, part-time, or casual work
- Self-employment income, such as private tutoring, provided you can back it up with bank statements or other proof
- Allowances or gifts from family or third parties
- Household income encompassing your spouse’s or partner’s earnings
- Scholarships or grants left after tuition and other school-related expenses
Quick Fact
According to recent statistics, approximately 60% of students aged 18-24 carry at least one form of student debt, and around 45% of college students have at least one credit card in their name, emphasizing the importance of responsible income reporting on applications.
Income Sources to Leave Off Your Application
Equally crucial as knowing what to claim is what to omit. Avoid including:
- Loans or borrowed funds. Although they may boost your bank balance temporarily, student loans are liabilities, not true income.
- Fictitious or fabricated earnings. Providing false info not only risks denial but may also lead to fraud charges and steeper penalties.
- Funds inaccessible to you. For instance, garnished wages allocated for child support or alimony don’t qualify.
What’s the Minimum Income Needed?
There’s no magic number to guarantee approval—issuers mainly care you can handle minimum payments after covering essentials like rent and food. Even a modest $100/month in disposable income might suffice, but expect a modest credit limit at first.
Remember: Credit cards aren’t a ticket to splurge beyond your means but a handy tool for managing expenses and emergencies responsibly.
Options When Your Income Falls Short
If your income doesn’t meet the threshold or you’re outright unemployed, don’t lose hope. Several workarounds exist that can pave the way to building credit:
Authorized User Status
Being added as an authorized user on someone else’s card often beats chasing a co-signer. This grants you access to a shared credit line and can nurture your credit score provided the primary cardholder handles payments responsibly.
Rhys Subitch, Senior Editor at Bankrate, shares their experience: “Before college, my parents added me as an authorized user on an Alaska Airlines credit card. That boosted my credit immensely — so much so, I still use the card 16 years later. Later, I moved up to a joint account and eventually applied for my own card with a substantial credit line at my credit union.”
Though it might feel awkward for parents to monitor your spending, this oversight often serves as a safeguard against impulsive expenditures.
“The biggest plus was having my folks watch over my spending. It kept me in check during the temptations of college life,” says Subitch.
However, tread carefully: if the primary user defaults, your credit will suffer. Establish clear agreements upfront, and only become an authorized user if the main account holder has a stellar payment history.
Using Credit-Building Debit Cards
Emerging as a safer alternative, certain debit cards connect directly to your bank account and help build credit by reporting your transactions to credit bureaus without the risk of overspending or debt accumulation.
For example, some cards automate payments directly from your linked account and report activity, effectively nurturing your credit profile. Though these aren’t traditional credit cards, they’re a viable stepping stone towards creditworthiness.
Secured Credit Cards and Co-Signers
Secured cards require a refundable deposit and allow you to build credit gradually. Co-signers can add their income and credit profile to yours, but this option is increasingly rare among major issuers, surviving mostly in smaller banks and credit unions.
Important Considerations Before Applying
To qualify for any student credit card, your income must demonstrate sufficient means for timely payments. For under-21 candidates, income sources are more restricted, while over-21 students enjoy greater flexibility. Reliability and verifiability of income are paramount.
If you fall short, alternatives like becoming an authorized user, opting for a secured card, or using credit-building debit cards can bolster your credit history sustainably and improve chances of future approvals.
Frequently Asked Questions
Do Student Loans Count as Income?
Simply put: no. Student loans, while increasing your bank balance temporarily, are debts rather than earned income. Credit card issuers look only at funds that truly belong to you, such as wages, steady family support, or leftover scholarship money after educational expenses.
How to Calculate Gross Income for a Student Credit Card?
For those under 21, tally all verifiable earnings—part-time jobs, work-study wages, plus steady family allowances. Only the remainder of scholarships or grants after tuition counts. Students 21 and older can add freelance earnings, household income, and full aid amounts. Sum your eligible monthly income and multiply by 12 to find your annual gross income.
What to Declare If Unemployed?
Even without a job, consistent financial support from parents or guardians can qualify, as can leftover scholarship funds after school-related expenses. When no typical income exists, becoming an authorized user or applying for a secured credit card can help you lay the groundwork for building credit.
Important: Never inflate income figures; verification may be requested, and honesty safeguards your credit future.