How To Get a Credit Card Without Income Proof?

With the unique benefits that credit cards offer, they have become a necessity. They are no longer just a credit instrument as they help save costs, reduce your expenses, and offer exciting rewards in the form of vouchers and cashback. Applying for credit cards has become easier than ever with digitalization. However, to apply for a credit card, you must submit certain documents such as your identity proof, address proof and income proof. Proof of income is an important document for the bank as it is used to assess your repayment ability. Without proof of income, it can be difficult to get a credit card, but it is not impossible to get one. In this article, we have explained in detail how to use a credit card without income proof.

What is Proof of Income?

Proof of income is a group of documents used to confirm how much money a person or a business earns each month or year. It helps banks and other lenders decide if someone can afford to pay back loans or credit they apply for. These documents also show where the income comes from, making sure it’s from a legitimate source. Providing proof of income helps build trust with financial institutions and makes the lending process smoother.

What is a valid income proof for a credit card?

Income proof, as the name suggests, is a document that confirms your income from various sources, including salary, business income, interest, dividend and rent. Proof of income helps financial institutions such as banks, non-banking financial companies (NBFC), and asset management companies assess your creditworthiness and ability to repay your loans. Moreover, income proof is also used to trace the original source of income and check whether it is from a clean source.
The following are the documents that are considered as valid income proofs.

For salaried employees

• Salary slip: A salary slip or pay slip is a document containing details about the gross salary, allowances, deductions, and take-home salary. An employer issues the pay slip to an employee every month. It is an important document as it confirms a person’s employment status and also acts as a proof of income.
• Form-16: It is a legal document provided by the employer or any institution and acts as proof that they submitted the money to the government authorities that was deducted as tax from your income. Form 16 helps you file your taxes easily as it shows clearly the TDS (tax deducted as source) and TCS (tax collected at source) deducted before you receive your income.
• Rental agreement or lease: A legal contract between the owner of the property and the person who desires to rent the property is a rental agreement. On the other hand, a lease is a legal agreement between two parties for a fixed period to earn a fixed income in exchange for land, property or services.
• Bank statements: A bank statement is a document provided by your bank which includes information about the current bank balance and all your transactions (income and expenses).
• Income tax return (ITR) statements: An income tax return statement is a form through which you will report your income from all sources to the income tax authorities. The authority will then decide your tax liability based on the information you provide and verify it.

For self-employed

• Business ownership proof: Documents such as partnership deed, proof of directorship in a company, and any document supporting your sole proprietary firm will help the bank access the state of your business.
• Profit and loss statement: Your business’ profit and loss statement will act as a proof your your financial position and fulfil the need for an income proof.
• Professional practice certificate: Doctors, chartered accountants, lawyers, and architects need to provide a copy of their professional practice certificate received by the respective professional bodies.
• Dividend statements: Individuals receiving dividends from mutual funds, or companies as a major source of income need to provide a copy of their dividend statements.
• Trade license: A trade license is issued by the local authority to operate a business in the jurisdiction of a local body.

Ways to Apply for a Credit Card Without Income Proof

If you don’t have income proof, there are still ways to get a credit card. Here are some approaches that might work for you:

1. Get a secured credit card

   Most credit cards in the market are unsecured. This means they do not require any collateral to back the credit card. However, it is these unsecured cards that require an income proof. So, instead of opting for an unsecured credit card, you can apply for a secured credit card that doesn’t require any proof of income. Banks usually issue secured credit cards against fixed deposits (FD).

   To get a credit card against your FD, you must invest at least a certain minimum amount as specified by the bank. The banks decide the credit limit based on the amount deposited in the FD. It is usually around 75-85% of the FD amount. If you want a credit card with a higher limit, then the deposited amount in the FD should also be higher.

2. Get an add-on credit card

   If you are applying for your first credit card and have no credit history or income proof, then you can get an add-on credit card through any family member. The primary family member should have a good credit history and credit score to get an add-on credit card. Then, you can easily apply for an add-on credit card through their credit card. The card will be issued in your name, and you need not pay any joining fee or show any income proof to get this card. Moreover, you can improve your credit history through it, and the primary credit card holder will be responsible for paying your credit card bills.

3. Apply for a student credit card

   Any student who is above the age of 18 years can apply for a student credit card. To apply for this card, you need not show any income proof or provide extra documentation. This card also comes in handy for people who quit their jobs for higher studies. However, you must be a student to apply for this credit card.

4. Show Your Investments

   If you have investments, they can help you qualify for a credit card even if you don’t have income proof. For example, you can show a strong balance in your savings account or investments like shares, mutual funds, bonds, or certificates of deposit. These demonstrate financial stability and can assure the credit card provider that you are capable of managing repayments.

5. Apply for a Credit Card Backed by a Fixed Deposit

   Many banks allow you to use your fixed deposit (FD) as collateral to get a credit card. This is one of the easiest ways to apply without income proof. Typically, the bank gives you a credit limit of 85% to 95% of the FD amount. The best part? Your FD continues earning interest even when you use it as security. If you’re unable to pay your credit card bill, the bank will use the FD amount to settle the balance.

6. Talk to Your Bank

   If you’ve been with the same bank for a long time, it’s worth asking them for a credit card. Banks often look at your overall banking history, including your average account balance, past transactions, and how you’ve handled loans or debts before. A solid history with the bank can increase your chances of getting approved, even if you don’t have income proof.

What alternatives are available to Pay Slip?

If you do not have a salary slip or pay slip, you can show any of the following documents to get a credit card.

• Offer letter: Your employer might not give you a salary slip, but there would be at least an offer letter which can act as proof of your employment. Banks accept even an offer letter to give a credit card.
• Monthly cheques: If you are a freelance professional or work on a contract basis, you can show a copy of the monthly cheques you receive from your clients as proof.
• Bank statements: As mentioned above, your bank statement can also serve as proof of income to get a credit card.
• Income tax returns: If you file your returns every year, you can show your ITR forms as income proof to apply for a credit card.
• Financial investments: You can obtain a secured credit card against your fixed deposits, mutual funds, equity shares, and even insurance policies. You can always request the bank to help you build or improve your credit history by issuing a secured credit card against your financial assets.

Frequently Asked Questions