Some credit cards offer the option of an “instant decision” or “instant approval”. In other words, you could apply for a credit card and receive a yes or no response within minutes if you apply online.
Getting an instant decision on your credit card application sounds great in theory – no waiting for follow-up letters or calls to find out whether or not you’ve been accepted.
However, the term “instant decision credit card“can be somewhat misleading. While some applicants may get a decision in about a minute, many people won’t. Whether you get an instant decision depends on a number of factors, including your own criteria. supplier approval and your personal financial situation.
How does an instant decision credit card application work?
Usually you will apply for the credit card online and you will also receive a response online. The process of deciding if you will be approved tends to be based on the credit rating.
Credit score is a measure of a lender’s creditworthiness, based on a picture of your current financial situation. In order to establish a credit score, the lender will use information from a credit agency. The score takes into account what existing cards, loans and other debt you already have, how you manage your finances in terms of paying off credit, and whether you have been in arrears on your loans or if some form of credit has been refused. in the past.
What is the difference between an instant decision credit card and a regular credit card?
With a normal credit card, you may have to wait a few days to find out if your application has been approved. Additionally, you will need to sign the credit card contract before the credit card is sent to you.
Since COVID-19, many lenders have made the credit card application process faster and easier to do online, and have allowed people to sign the agreement online, rather than having to go to a bank branch.
With an instant decision, you will quickly receive a yes or no. With a normal credit card, the lender may want to perform additional credit checks or contact you in person to discuss your request.
How soon will I receive my credit card?
If you are approved, you should receive your card within a week or two. So while you may be given a quick decision as to whether you can have the card, it will still take some time for it to be mailed to you, and you will not have access to the credit until the card arrives. .
For this reason, while the approval may be instantaneous or very fast, it does not mean that the ability to use available credit is instantaneous. There are faster ways to access credit in an emergency, such as talking to your bank about extending an overdraft or asking your current credit card provider for a temporary increase in the credit limit. of your card.
Am I likely to be eligible for an instant decision credit card?
It depends on your personal financial situation and your credit rating. It also depends on how much potential credit you already have and whether you’ve made a lot of recent credit applications.
Your credit score will show if you have had a lot of recent credit applications. If so, it could work against you as it can make you feel like you are desperately in need of credit. For this reason, if you are planning to apply for an instant decision credit card, make sure that you don’t make a lot of requests in a short period of time.
Do I have to pay more interest?
Some instant decision credit cards may not offer the most competitive interest rates, called APR or AER rates. For this reason, it is better to shop around for the best credit card for your needs, rather than the credit card that promises a quick decision.
If you want a credit card and plan to pay off the outstanding balance in full each month, you don’t have to worry too much about the card’s APR. However, if you think you might not pay off the balance in full, the APR and interest rate are very important. The higher the APR, the more interest you will pay, and potentially, the longer it will take you to repay your credit.
Therefore, think carefully about how you plan to use a credit card before you apply. This will help you as you search for the best instant decision credit card to decide if it is, in fact, the best product for your current financial needs.
When will I receive an instant decision on my credit card?
You might receive an instant decision on your credit card application if you have a good credit rating and income, or if your credit profile exactly matches the profile of a particular card.
This is because it is fairly straightforward for the pre-application or “smooth credit check” tools to look at the basic details and make a decision.
However, it is often very difficult for credit card providers to decide whether to approve a card on the back of a quick 60-second verification, which means your application may need to be resent for further processing. additional checks before you get a decision.
Essentially, when a credit card provider lends money, they take the risk that you won’t pay it back.
Credit scoring helps providers determine the level of risk for each person who applies by checking previous credit information and using it to decide how much can be loaned and at what rate.
Many major credit card providers now offer on-demand due diligence services on their websites to help provide a quick decision on your credit card application.
These tools perform what is called a “soft fingerprint” check on your credit report to give you an idea of your acceptance before proceeding with a full application.
While not the same as being firmly accepted, these checks will not affect your credit report or credit score.
If you are having trouble finding the right credit card, prepaid cards can be a great alternative as they offer the convenience of a credit card without the risk of getting into debt.
And because there is no credit check, prepaid cards are truly an “instant decision,” with less chance of being rejected.
Otherwise, if you don’t know where to start, try comparing credit cards for people with limited or bad credit history.
Why have I been refused credit?
There are several potential reasons for this:
If you’ve missed payments, it could have taken a toll on your credit report and made you appear unreliable to a potential lender. It could be a loan or credit card repayment, a cell phone contract, or the lack of a mortgage payment.
You are not registered on your local voters list
You have a financial connection with someone with a bad credit history
You have a lot of potential credit – a lender will also consider how many bank accounts you have and how much debt you currently have or how much credit you could use.
You can also fall victim to not even having a good or bad credit history or identity fraud.
Many young people struggle to get their first credit card because lenders don’t have a financial history to compare.
I have a bad credit rating, but I would like a credit card that rewards purchases. What are my options?
If you want to reap rewards when you spend but are limited by a bad or no credit rating, the good news is that there are always refund cards available to you. However, these are not as rewarding as others in the market, so your priority should be to rebuild your credit rating to make yourself eligible for these cards more competitive in the future.
To rebuild your score you will need to use your credit card regularly, never miss a payment and always stick to the limit.
Use your repayment card to get a small reward for full repayment each month as you work to rebuild your credit rating. Only get these cards if you can pay off the balance in full each month, as the interest rate is likely to be higher than standard cards.
If you end up getting into debt on these types of cards, you could wipe out any cashback winnings you might have made and risk getting into more debt and damaging your credit rating further.