Guide: How to Get Instant Approval Credit Cards for Bad Credit
It’s no secret that finding instant approval credit cards when you have bad credit can be a challenge. In fact, even finding a credit card that doesn’t have high interest and low limits can be an exercise in frustration while you’re trying to rebuild your credit.
However, it’s not impossible to get an instant decision on credit cards if you know where to look. Since you can apply for credit cards online, most of the time you can get instant approval on credit cards for bad credit.
We will show you how to prepare to shop for instant approval credit cards, what secured vs. unsecured instant credit cards are, and which instant credit cards might be right for you.
First, let’s take a closer look at the criteria companies use before approving an instant credit card: your credit score. Different companies that offer instant credit cards may have varying standards. According to Credit.com, the companies that offer credit scores do not determine what good credit vs. bad credit is — that is left up to the individual lenders.
Credit scores for both FICO® and VantageScore®, which are the two main credit scoring companies, range from 300-850. The higher your credit score is, the lower the risk a credit card company assumes as they lend you credit.
When a company issues instant approval credit cards for bad credit, however, they assume more risk. That risk is passed on to the customer in the form of higher fees and interest rates.
What Is Bad Credit?
Even though individual companies decide which consumers to offer instant approval credit cards to, there are general ranges that can be assumed, according to Nerd Wallet:
- Excellent credit: 720+
- Good credit: 690-719
- Fair/average credit: 630-689
- Bad credit: 300-629
However, according to TheSimpleDollar.com, any score under 650 can be considered poor credit, considering that 695 is the national average. With this scale in mind, only a credit score of 760 or higher is considered excellent.
Offering instant approval credit cards for bad credit is more risky for credit card companies than instant approval credit card offers made to consumers with a long history of excellent credit. In order to make up for the risk, companies will often charge customers with bad credit higher interest rates, set lower spending limits, and only offer secured cards.
Instant Approval Credit Cards: Preparing Ahead
Before you start hunting for instant approval credit cards for bad credit, you need to be prepared. The more you know, the more you will be able to make informed decisions about a credit card with instant approval and avoid falling into a situation that will cost you more in the end.
Image Source: Instant Approval Credit Cards For Bad Credit
Check Your Credit Score
The first thing you need to do before shopping for instant approval credit cards is to find out your credit score. If you already have a credit card, there’s a good chance your score is on your monthly credit card statement. You can also check with your bank or credit union to see if they have options to check credit scores for their customers.
If you are unable to access your credit score through any of your financial insitutions, you can check online. CreditKarma.com and Credit.com are two websites that offer free credit scores. Once you know your score, you can better determine whether to apply for instant approval credit cards for bad credit, such as secured credit cards, or apply for an instant credit card approval on a traditional, unsecured card.
If your credit score is too low, you may have trouble finding an instant credit card with terms that work for you. People who don’t need an instant decision on credit cards can take some time to repair their credit by:
- Paying bills on time
- Getting current with creditors
- Reducing overall debt
Instant approval credit card offers are easier to get once your credit score goes higher. However, some consumers need instant credit card approval, in which case, the choices are more narrow.
Instant Approval Credit Cards: Secured vs. Unsecured Credit Cards
If you have poor credit, your best option may be a secured credit card. First, you need to know what an unsecured credit card is before learning how an instant credit card approval with a secured card can benefit you.
An unsecured credit card is the most common type of credit card, according to CreditCards.com. The card is not directly tied to money that the customer has deposited to secure the card, meaning they qualify for instant approval credit cards based on their good credit history and overall financial strength.
Consumers who need an instant credit card but have poor credit need to make a deposit to the lending institution issuing the card. The credit limit is usually the same amount as the deposit, which protects the company in case the borrower cannot pay. Once the deposit is made, a secured instant credit card works just like any other card.
Instant approval credit card offers for secured cards can benefit consumers who are trying to rebuild their credit. A secured credit card lender will report your payments to the credit bureaus, just like with an unsecured card. By making on-time payments, a person with poor credit can begin to see an increase in their credit score.
The downside of a secured instant credit card is that if the borrower doesn’t make the payments, they lose the deposit and their credit score is further damaged. Also, secured cards often have fees in addition to the initial deposit, which can add up quickly.
When shopping for instant approval credit cards for bad credit, an unsecured card is always more desireable but might not be attainable. As you begin your search, keep in mind that not every credit card with instant approval is created equally. Always look for the best terms you qualify for.
Instant Approval Credit Cards: What to Look for
When looking for a credit card with instant approval, you will want to select one that fits your needs. Instant approval credit cards for bad credit that are secured come with different features and benefits, just like unsecured credit cards.
In addition to putting down a deposit for your secured credit card, financial institutions often have annual fees, activation fees, and processing fees, not to mention interest rates.
Find out ahead of time which instant credit card will give you the best deal on fees and whether you can afford them in addition to the deposit.
If you’re trying to rebuild your credit by applying for instant approval credit cards for bad credit, then you will want to make sure that the card company does, in fact, report your on-time payments to the credit bureaus.
Also, you need to know whether or not the company flags your card as being secured. A flag that your instant credit card is secured might hinder you from rebuilding your score.
Most of the time, credit card issuers have a 100% ratio, meaning they will only issue a line of credit for the amount of your deposit. However, you may find an exception to that, and depending on your credit needs, it might be worth the hunt.
Some institutions who provide an instant decision on credit cards also offer interest on the deposit. This is rare, but finding a company that does is one sign of a solid issuer.
It is also important to know how long the credit card issuer will keep your deposit once you close the account. Some companies like to keep the deposit long enough—up to a few months—to ensure there aren’t additional charges to the account before they give back the deposit.
Qualifying for an Unsecured Card
When searching for instant approval credit cards, check to see how long it will take for you to qualify for an unsecured card. Not all financial institutions will turn around and offer you an unsecured card, so it’s important to know if that’s an option.
Oftentimes, an issuer will watch over a period of time to ensure you’ve made all your payments on schedule before giving you the choice to switch to an unsecured card. The time periods vary, but you can expect to make a year’s worth of payments before seeking instant approval for credit cards that are unsecured.
Instant Approval Credit Cards: 3 Cards Worth Checking
There are several instant approval credit cards for bad credit you can compare before applying, but we’ve selected just a few to get you started.
Photo courtesy of Capital One
Capital One has long been a trusted name in the industry. Their secured MasterCard offers the following:
- $0 annual fee
- 24.99% variable APR
- Refundable deposit based on credit ($49, $99, $200)
- Access to a higher credit line after five months of on-time payments
- Free credit score and tools through CreditWise
The Discover it® card claims to help customers build or rebuild credit with responsible use.
- $0 annual fee
- 23.24% standard variable purchase APR
- Free FICO® score every month
- 1%-2% cash back on purchases
A Wells Fargo Secured Credit Card can help you establish a credit history with a security deposit as low as $300.
- $25 annual fee
- 19.24% APR
- Credit line is equal to your security deposit
- Access to free credit score
- Up to 5% cash advance
If you want to know how to get instant approval credit cards for bad credit via a secured card, the key is not to rush. Take the time to find your credit score, make adjustments as you can through on-time payments and paying down debt, then shop for a card that suits your needs.
Remember to check out all the features and benefits that are important to you before applying for instant approval credit cards. There are many credit card issuers out there who are willing to work with consumers who have poor credit. Resist the temptation to apply for the first instant credit card that you think you can qualify for.
After selecting a credit card with instant approval, use caution. The good thing about secured cards is that you can’t spend much more than a set amount that you’ve deposited. Therefore, you should technically be able to afford all the purchases you make on the card.
Pay the card on time, every time. You applied for instant approval credit cards for bad credit in order to rebuild your credit history. Now is the time to show the credit bureaus that you can properly manage credit. Once your credit is good, you can apply for unsecured credit cards and loans.
Taking the time to do research and find instant approval credit cards that fit your needs could mean more money tucked safely in your wallet.
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