Ever since lawmakers passed the Credit CARD Act of 2009, regulators have required banks to only issue credit to borrowers with a demonstrated ability to repay. For most of us, that means reporting income from a job. However, thanks to a recent clarification of those rules, more Americans can qualify for credit cards, even without consistent employment.

Under the updated guidelines, banks can offer you a line of credit based on whether you can pay down your full balance on relatively short notice. If you can expect "reasonable access" to cash from a spouse's paycheck, a structured settlement, trust fund payments or other forms of family income, a bank might accommodate your request. Instant approval credit card applications may not always be programmed to ask you the right questions, so you may have to work directly with a lender's customer service team or with a branch manager to verify your financial situation.

On the other hand, if you're asking about opening a credit card while you're unemployed, that's a trickier situation. Even lenders that were once somewhat generous with credit based on your past employment history have since tightened up their purse strings. That's as much to protect themselves from another credit crunch as it is to comply with the aforementioned regulations.

This leaves you with two options:

  • Open a secured credit card account with a trusted issuer. Capital One offers an affordable secured credit card to applicants nationwide, while Wells Fargo and Bank of America extend secured accounts to customers of their retail branches. Some community banks and credit unions also provide secured credit cards to members. These accounts can help you build a strong credit history, provided you can afford to keep a few hundred dollars locked up as a security deposit for a few years.
  • Start using a free, prepaid debit card from American Express. American Express, a CardRatings.com advertiser, after launching a variety of free and low cost prepaid cards under the Bluebird, Serve, and American Express (American Express is a CardRatings.com advertiser) brand names, company officials noted that they monitor usage activity on those cards to determine eligibility for future charge card memberships. Using an AmEx prepaid card now won't guarantee you a credit card in the future, but you will enjoy significant purchase protection and personal security benefits.

Remember to check your free, annual credit report each year to ensure that mistakes in your file don't hang up your future credit card applications.

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