Pre-approved / Instant Credit Cards

Not always as instant as you may think

Don’t let the name fool you. Pre-approved and instant credit cards don’t actually mean that you automatically qualify for a credit card with no questions asked. In general, pre-approved credit cards really mean that the issuing credit card company has given you a conditional approval while they perform a full credit check on you from the three major credit bureaus.

However, some instant approval credit cards are actually worthy of the name as they allow you to apply for the card online, and you usually receive a decision seconds after filling out the application. To receive an instant credit card approval online, you generally need to possess a very good credit rating. If you know that you have a bad credit rating, you might think twice about applying for an instant card as your rating could drop even lower due to excessive credit bureau inquiries.

If you do qualify for an instant card, you usually have to wait a week or two for the physical credit card to arrive in the mail. However, some companies have been known to send you an actual credit card in the envelope when you receive the original offer. You then have to go through a series of identity-proving security checks to activate the card before you can use it. To help prevent identity theft, the activation process usually involves calling from the phone number listed in the original application and verifying the last four digits your social security number.

In the past, some issuers would give qualified applicants the credit card number, so they could start making purchases immediately online. However, this isn’t very common anymore as it sometimes led to fraudulent use.

Most types of merchant-issued credit cards are considered to be instant cards as the retailers generally want you to use the card right away, especially if you are already in the store. This is why you may often be asked if you’d like to sign up for a credit card right then and there.

If you do receive an instant credit card offer in the mail, make sure you read the cardholder agreement fully, so you won’t be disappointed if you can’t start shopping with it immediately.