Getting a credit card opens up many possibilities, like building credit, immediate access to funds, lucrative rewards and much more.

The only thing standing between you and these opportunities is a credit card application, which typically asks for your contact information and annual income. If you are a student, a stay-at-home spouse, unemployed or have no or low income, that income factor may cause a lot of anxiety.

But you shouldn’t let income alone keep you from applying for a credit card. What counts as income and how much you need to qualify for a credit card may surprise you. Here’s what you need to know about income requirements for a credit card.

Income terms for card applications

The annual income question was introduced with the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act [PDF]) as a way to protect consumers after the Great Recession.

The Act states: “A card issuer may not open any credit card account for any consumer under an open end consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account.”

Under the CARD Act, card issuers must make sure that cardholders can afford to pay off their balances, or at least keep up with minimum payments, which are calculated each month based on the card’s outstanding balance. Therefore, your income helps issuers determine your credit line and whether or not you’ll be able to make payments.

The CARD Act does not, however, dictate a minimum income requirement, which means that it’s up to the discretion of card issuers to decide.

Credit card income requirements

The tricky part for applicants is that card issuers don’t typically publish minimum income requirements, since income alone is an incomplete measure of an applicant’s financial well-being. It’s just one factor of a more holistic measure of a cardholder’s ability to make a minimum payment, referred to as the debt-to-income (DTI) ratio. Your debt-to-income ratio shows how much money you owe versus how much money you earn. If you earn a great living but you have too much debt, you could be rejected for a credit card.

So, what’s considered too much debt?

While credit card issuers determine their own requirements for DTI ratios, the Consumer Financial Protection Bureau (CFPB) has suggested a maximum DTI ratio of 43 percent [PDF] to qualify for a mortgage. However, the CFPB has recommended that homeowners keep their DTI ratio at 36 percent or less [PDF] and that renters keep their DTI ratio at 15 to 20 percent or less. So, these figures are usually taken into consideration when credit cards are in question. You can calculate your DTI ratio by dividing your total monthly debt (car payments, child support, mortgage payments, alimony, student loans, etc.) by your monthly income.

Let’s say every month you owe $1,200 for car payments and $400 in student loans, making your total monthly debt $1,600. If your monthly income is $2,500, your DTI ratio would be 64 percent, which might be too high to qualify for a credit card. With an income of roughly $3,700 and the same debt, however, you’d have a DTI ratio of 43 percent and would have better chances of qualifying for a credit card.

Also, note that some credit cards have minimum credit limit requirements, so if your income prohibits you from qualifying for a higher credit limit, then your card application may be rejected.

If you have no credit history, or poor credit, and are unsure if you’ll be able to meet minimum monthly payments, you could consider applying for a secured credit card, which requires you to pay a security deposit that serves as your credit limit.

Credit card income requirements for students

Student credit cards are great tools for building credit (as long as timely payments are made). Credit issuers have different requirements for showing income as a student, which largely depends on age.

If you’re between the ages of 18 and 20, you’ll generally need to show proof of independent income or have a guarantor (typically a parent or guardian) who can guarantee payment. Besides income from a job, you may be able to count regular allowances or money that’s leftover from grants and scholarships after tuition is paid.

If you’re a student aged 21 or older, you likely won’t be able to get a credit card with a cosigner. Instead, you can show income from part-time or full-time employment (tips count), self-employment, recurring gifts or allowances, spousal income and residual funds from scholarships and grants.

Issuer-specific policies

The CARD Act doesn’t set income requirements, which means these requirements are up to the discretion of card issuers. Some issuers have concrete income minimums, debt-to-income ratio limits and minimum credit limits, all of which would affect your ability to get a credit card.

For example, according to the Capital One SavorOne Cash Rewards Credit Card‘s terms and conditions, Capital One requires applicants’ income to be at least $425 per month higher than a monthly mortgage or rent payment in order to be eligible for this card.

The Wells Fargo Autograph℠ Card, however, offers a minimum credit limit of $1,000 according to the card’s terms and conditions. So, if your income is too low for you to be approved for a $1,000 monthly credit limit, then you’ll likely be rejected for this type of card.

Lying about income on a credit card application

You should not lie about your income on a credit card application. If you get approved for a card you can’t afford to pay off, you’ll end up in debt and hurt your credit, which can prevent you from renting a home, getting approved for a mortgage, opening another credit card, getting approved for loans and more. Further, lying on a credit card application could result in up to 30 years of jail time and a fine of up to $1 million.

Acceptable sources of income for a credit card application

Income from a full-time job isn’t the only thing that counts as income for a credit card application. You can usually factor any of the following into your annual net income:

  • Income, wages and tips from a full-time or part-time job, or freelance work
  • Spouse’s income (household income)
  • Unemployment benefits (occasionally acceptable)
  • Child support, alimony or separate maintenance income
  • Grants and scholarships
  • Social Security income
  • Retirement fund and pension distributions
  • Savings account assets
  • Gifts (occasionally acceptable)
  • Allowances
  • Trust fund or inheritance distributions
  • Investment returns

It’s important to note that there are some income sources that are not accepted on credit card applications. The following will not count toward your annual net income:

  • Loans
  • Your parents’ income
  • Non-cash assistance (such as for utilities)
  • Some types of financial aid
  • One-time gifts

The bottom line

While the CARD Act states that cardholders must be able to afford credit card payments, issuers can set their own income requirements, which they generally don’t publicize. Credit card issuers factor your income holistically into your debt-to-income ratio to determine whether or not you’ll be able to make minimum monthly payments, and therefore whether or not they should approve your application. And if you have no or low income, receive government assistance or are a student, there are a number of income streams you can factor into your net annual income on your credit card application beyond traditional wages.