Whether you want to build up your credit history or improve your credit score, you need a credit card. However, it is difficult to get approved for a credit card if you have a poor score or little to no credit history. This might just be one of the greatest paradoxes.
If you apply for a credit card and get denied, you will damage your credit score. If you make multiple applications in a short period of time, this will damage your credit score even further.
To help you get out of this situation, you might want to look into guaranteed approval credit cards. It’s a unique kind of credit card that could help you rebuild your credit if you use it responsibly.
Let’s dive deeper into guaranteed approval cards, learn what their advantages and disadvantages are, and help you discern whether this card might be a good option for you.
What Are Guaranteed Approval Credit Cards?
When you hear the word “guaranteed”, you typically wouldn’t be wrong in assuming that something is 100% certain. Unfortunately, when it comes to guaranteed approval cards, this is actually a wrong assumption, and “guaranteed” can be considered a misnomer.
Not everyone can get a guaranteed approval credit card, and regardless of its name, issuers will still have a few requirements for you to meet before they give you this credit card. If you don’t meet the requirements, you won’t be approved.
Fortunately, though, the requirements are few, and most people can meet them, even with a poor credit score.
Perhaps “easy approval” credit cards would be a more suitable name since, even though it’s not guaranteed you’ll get the card, it’s relatively easy to do so.
Besides the fact that the application process is much easier, guaranteed approval cards are very much the same as regular credit cards. They come with fees, benefits, rewards, and terms and conditions that are set by the issuer.
What Are 100% Approval Card Application Requirements?
As mentioned, even though they’re called 100% approval or guaranteed approval cards, you still need to meet the issuer’s requirements if you are to get approved.
Your credit score doesn’t play as big of a role in your application status as it does for some other types of credit cards. To get approved for a guaranteed approval offers, you will most likely have to meet some of the following requirements:
- You have to be of the proper age
- You need to have a current bank or credit account
- You need a valid ID
- Your address needs to be verified
These are just some of the requirements for a guaranteed approval offers, and different card issuers might have different requirements. Before you apply for this card, make sure you read and understand all of the issuer’s requirements to see whether you would be eligible for their card.
While the application process is typically straightforward and easy, you should always read the fine print of the Terms and Conditions and the Pricing and Information.
Keep in mind that the ease of approval comes with some drawbacks. These cards typically come with higher interest rates and fees and fewer bonuses and rewards.
Guaranteed Approval Cards vs Instant Approval
Guaranteed approval cards are often confused for instant approval cards, also known as instant decision cards. There is, however, quite a difference between these two.
Instant approval cards are those that let you know almost immediately whether you’ve been approved for a card or not. You can fill in your application online, and you’ll typically get a notification within 2 minutes that tells you whether your application has been accepted.
To be eligible for an instant approval card, you’ll normally need to have a good to excellent credit score. There are some instant approval credit cards for poor credit, but this is typically not the case.
Guaranteed approval cards, on the other hand, are designed for those with poor credit. It will take a longer time, between 7 and 10 days, to find out whether your application has been successful.
Guaranteed Approval Cards and Pre-Approval
It’s very likely that you’ve received a credit card offer or two in the mail telling you that you’ve been pre-approved for a card. Does this mean that you’re guaranteed to get a card if you apply for it? The short answer is No.
If you receive a pre-approval offer, it is mostly based on the general information about your financial status and credit score. Card issuers that send you these offers don’t have your exact figures – they just collect lists of consumers who meet certain criteria, who are within a certain income bracket or credit score range.
Only once you apply for a credit card will these issuers do a full credit check on you and tell you if you’ve been approved.
Getting a pre-approval offer for a guaranteed approval credit card might mean you are eligible for this card since you can easily apply for it with bad credit, but again — it’s not 100% guaranteed.
What Are Guaranteed Approval Card Alternatives?
Guaranteed approval card offers are designed for those with a poor credit score or little/ no credit history. They have fewer requirements for applicants, so many with a poor credit score believe these cards to be their only option.
However, you should try to avoid these cards if possible. Since they’re made for riskier clients, they often come with high annual fees, high interest rates, and can quickly become expensive if you have to carry your balance.
The best alternative for a guaranteed approval card is a secured credit card. Secured credit cards are also available to those with poor credit, but they come with lower fees and better rewards and bonuses. (Read: Secured Credit Cards Explain for the detailed secured card information)
The only drawback is that you will need to make a deposit to get your card. If you’re a responsible cardholder and pay off your debts on time, your deposit can be returned to you if you decide to cancel your card or upgrade to a better one.