Yes, you can get a credit card while on disability benefits. Here's how to build credit safely without risking your SSI or SSDI.
In this article, we'll cover:
- Credit cards and benefit eligibility
- Best credit cards for disability recipients
- Building credit safely
- Avoiding debt traps
1. Credit Cards and Benefit Eligibility
Does credit affect SSI?
- Credit cards don't affect eligibility
- Debt doesn't count as a resource
- Available credit doesn't matter
- Only cash/assets count
Does credit affect SSDI?
- No impact on SSDI
- No asset limits on SSDI
- Credit history doesn't matter
- Benefits fully protected
Income for applications:
- SSI/SSDI counts as income
- Can list on applications
- May limit approval amounts
- Be honest on applications
Key point:
- Having a credit card is fine
- Using it wisely matters
- Don't overextend
- Keep payments manageable
Important: Credit cards themselves don't affect your disability benefits. But going into unmanageable debt can create financial stress.
2. Best Credit Cards for Disability Recipients
Secured credit cards:
- Deposit becomes limit
- Easier approval
- Builds credit
- Good starting point
Credit builder cards:
- Designed for low credit
- Small limits
- Help establish history
- Step to regular cards
Cards to consider:
- Discover it Secured
- Capital One Platinum Secured
- OpenSky Secured
- Self Credit Builder
What to look for:
- Low or no annual fee
- Reports to all bureaus
- Path to upgrade
- Reasonable terms
What to avoid:
- High annual fees
- Subprime offers with bad terms
- Store cards with high interest
- Cards you can't afford
3. Building Credit Safely
Start small:
- Get secured card
- Low credit limit
- Use sparingly
- Pay in full
Good habits:
- Use less than 30% of limit
- Pay on time always
- Pay full balance monthly
- Keep accounts open
Building strategy:
- One or two cards only
- Consistent small use
- Automatic payments
- Monitor your credit
Timeline:
- 6+ months to see improvement
- 1-2 years for good credit
- Patience required
- Steady progress
4. Avoiding Debt Traps
Risks on limited income:
- High interest accumulates quickly
- Minimum payments trap
- Fees add up
- Hard to pay off
Warning signs:
- Only paying minimum
- Using card for necessities
- Balance growing
- Multiple maxed cards
Safer alternatives:
- Debit card for daily spending
- Emergency savings in ABLE
- Avoid impulse purchases
- Budget carefully
If in debt:
- Stop using cards
- Pay more than minimum
- Consider counseling
- Avoid debt settlement scams
Credit Score Basics
Why credit matters:
- Housing applications
- Utility deposits
- Some employers check
- Future loans
What affects score:
- Payment history (35%)
- Credit utilization (30%)
- Length of history (15%)
- Credit mix (10%)
- New credit (10%)
Checking your score:
- Free annual reports
- Many cards show scores
- Credit monitoring services
- Doesn't hurt to check
Improving your score:
- Pay on time
- Keep balances low
- Don't close old accounts
- Limit new applications
How Purple Helps
Purple supports your financial goals:
- Track spending clearly
- See available funds
- Avoid overspending
- Simple budgeting
- Manage money wisely