Applying for a new credit card is typically a process that takes quite some time to finish. Suppose you have a big purchase ahead that you cannot afford to pay for in cash, for example. In that case, you probably don’t have time to wait for 7 to 10 business days to find out whether you’ve been approved and then wait another two weeks to receive your credit card and start using it. When you don’t have time to wait, instant decision credit cards might be your solution. Many banks and credit card issuers offer instant decision credit cards that you can easily apply for online.
It typically won’t take more than a few minutes to determine whether you will be approved for a card, making the application process much more manageable. It’s not wise, however, to apply for an instant decision credit card before you know exactly what they are. So, let’s look closer at these credit cards to help you determine whether they’re a sound financial decision for you.
What is Instant Decision Card?
Most credit card issuers offer instant decision credit cards, and applications can be made online. They’re also sometimes known as instant approval cards and are a good choice for those who want to know immediately whether their application will be approved. When applying for this type of credit card, typically, you will receive a notification informing you about the success of your application within just two minutes. Your application depends on your FICO score and is processed by computer algorithms instead of a human agent.
If you have an excellent or good score, you are likely to get approved, but with a poor score, it tends to get more complex. Since you cannot explain the circumstances of your current financial situation or provide any additional details to the computer, chances are higher that your application will be denied. There are three possible outcomes with instant decision cards. You can get: Accepted, Rejected, or Referred for closer examination.
- Application Accepted. If you get accepted, you will need to sign an agreement before you can get your card. Depending on the issuer, this can be done online, or you might have to wait for the proper paperwork to be sent to you.
- Application Rejected. If your application is rejected, you might or might not be contacted by the issuer, who will explain why it was unsuccessful.
- Referred for Closer Examination. And finally, if you’re referred for further examination, the credit card issuer will most likely contact you and ask you to provide additional information.
If you don’t get an immediate answer after submitting your application, it is likely still being examined, but you should contact the issuer just in case.
These cards are convenient, but convenience shouldn’t be the most critical factor you consider before getting your card.
Instant Decision vs Guaranteed Approval
As mentioned, instant decision cards are also known as instant approval cards, but this name tends to be misleading. Many applicants confuse them with guaranteed approval cards. The two are pretty different and typically have different approval criteria.
What is an Instant Decision?
Instant decision cards are usually regular cards that require you to have a higher credit score. Although you’ll be notified about your application status almost immediately, that doesn’t mean you’ll be approved.
What is Guaranteed Approval?
Guaranteed or aka 100% approval cards are a bit different. They function the same way as every other credit card, but the requirements to get them are usually lower, so even if you don’t have an excellent credit score, you might still be approved for these credit cards. However, remember that even though their name might suggest otherwise, guaranteed approval offers are not available to everyone and anyone. You still have to meet specific requirements imposed by the issuer.
RELATED: See 100% Approval Offers
Applying Online with a Poor Credit Score
You will often find two types of online applications: one for those (a) with excellent or good credit history, and the other for those (b) with fair or bad / no credit history.
Although most instant cards require you to meet high criteria, this isn’t always the case. You can still find suitable offers for poor credit with the “instant decision” feature.
If you belong to the second category, finding instant cards that initially perform a so-called “soft search” of your credit history is in your best interest. With soft searching, the issuer will do a basic credit verification check that doesn’t leave a trace on your credit file. It also doesn’t affect your credit rating, but it gives enough information to estimate whether you will get approved.
It’s important to note that soft search results aren’t always definite. A full credit check might yield a negative outcome even if the initial results are positive. All this shouldn’t discourage you from applying online if you have a bad credit rating. Applying online is fast and convenient, especially with instant response cards. However, checking whether you’re eligible for a card before submitting your application is essential.
Information Collected by the Lenders for Instant Cards
It doesn’t matter if you’re applying for a fast-decision card. It doesn’t matter whether you’re applying for it online or in person. Your issuer must collect certain information before you can get approved for a card. They will review your credit history, verify the information you provided, and more. To ensure that the process is as quick and easy as possible, it’s best to have the following information at hand when you’re making your application:
- Personal information. This includes your name and contact information. You must provide proof of identity, typically an ID card, driving license, or passport.
- Address. Your current home address is a must. You must state your accommodation status, i.e., whether you own or rent the home, and how long you’ve been at the address.
- Previous address. This will be necessary if you’ve recently moved to your current address. Most issuers will pay attention to how often you change addresses and consider you to have better financial stability if you don’t move frequently.
- Employment. You must state your job title and provide your employer’s contact information. Again, the longer you’ve held the job, the better, as it’s a sign of stability.
- Finances. Your issuer must have information about your salary and bank account. This lets them know whether you can afford to take on the credit card.
- Credit history. This is among the most vital pieces of information your card issuer collects. They look at your credit history, how much credit you’ve taken in the past, how quickly you paid it back, whether you paid it back on time, etc.
These are just examples of the information collected by issuers, and different issuers might ask you to provide additional information. Having all this information when applying for a fast decision offer makes the process smoother.
How Long Does it Take to Get an Instant Approval Card?
While instant cards allow you to get approved immediately if you meet the requirements, this doesn’t mean you can start using your card as soon as the next day. You might have to wait until you receive the necessary paperwork in your mail. Even if the issuer allows you to sign the paperwork online digitally, you will still have to wait until your card arrives at your address. This can usually take anywhere between 7 and 10 business days.
Certain issuers ship the cards overnight for high-net-worth persons, and some give you the option to request overnight shipping. However, remember that this might come at a cost, as some issuers charge a fee of up to $35 (or more) if you request your card to arrive in 1 or 2 business days. If you’re hurrying to use your new card, you can look for issuers offering instant card numbers. These issuers offer you all the essential information that allows you to use your card before you physically have it with you.
How Does an Online Application Work?
Your online application for an immediate decision offer will be instantly sent to the issuer. The issuer will then refer to the credit reporting agencies that collect information about your financial history, previous credit borrowing behavior, etc., and they will do a credit check. This can be completed within seconds, and you will be notified of your application status almost instantaneously.
The biggest question in most applicants’ minds is whether online applications are safe. The simple answer is – they are. Banks and credit unions that issue credit cards rely on secure servers to protect their websites. All the information is encrypted and can only be read by the issuing bank.
Making Multiple Applications
Applying for your fast decision offers online is simple, easy, and convenient, but it doesn’t mean you should apply for everyone you can find. Making multiple applications can have a detrimental effect on your credit score and will make it more difficult for you to get approved. Every time an issuer does a full credit check on you, they leave a trace on your credit report. If an issuer notices that you’ve made multiple applications, this might raise red flags for them as it will seem like you’re in a hurry to get some cash, which is a sign that you’re financially unstable.
Only issuers who offer soft searches don’t leave a trace on your records, so you can make multiple applications without consequences in this situation. However, it’s still better to apply for a single card. If your application is rejected, it’s best to find out why you’ve been denied and contact the issuer. It’s generally a good idea to wait at least three months before making another credit card application to avoid damaging your credit report.
RELATED: 20 Financial Rules To Live By