I recently applied for a new credit card. Not because I want more credit, but because I have a credit card at the moment which is carrying more than a thousand pounds of debt and charging me 34% APR for it and I want to move to a cheaper card. I’ve had that level of debt for years now no matter how hard I try to pay it off and I’m certain a large part of that is paying a third of the balance a year in interest charges.
Applying for credit while living on benefits isn’t straightforward. First off, you have to specify your occupation. I’d love to reply “working full time managing my illness” but that isn’t an option. As someone who cannot work I resent having to select “unemployed” from the list. Some people have suggested that the correct option is “retired” but if so then the banks have not said this anywhere that I can see. I’d really like the banks to clarify what someone who cannot work should chose, or add an option to specify that.
The larger problem is working out what income to put and how it is arranged. Do all benefits count as income? Are some excluded because they are less likely to continue? Is DLA excluded because it covers costs that other people don’t have? Some benefits are paid jointly to a couple, how do you divide that up?
In my case, I receive Employment Support Allowance and Disability Living Allowance. My wife receives Carer’s Allowance. We jointly receive Housing Benefit and Council Tax Benefit. It’s quite hard to know which of those count as income in the view of the bank.
I would like to see the banks add an option to the list of occupations for people who cannot work due to sickness and disability, and I would like them to clearly state what benefits count as income and how to divide them up.
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