What Are Instant Approval Credit Cards?

You may have seen advertisements for credit cards which offer an instant approval facility, implying that within moments of an online application you'll be approved for your new card. Can this really happen, and if so how does it work?

One important point to make is that the phrase 'instant approval' is somewhat misleading - not everyone will have their applications approved, of course, just as with any other financial product.

It's perhaps more accurate to describe these cards as 'instant decision' cards, where you'll be given a 'yes' or a 'no' within a minute or so of submitting your application. One example of this kind of card is the Capital One Classic card which promises a decision within 60 seconds, with high approval rates even for people with bad credit ratings.

With these quick decision cards, the information you give on your application form is verified by automatically checking your credit file and other details held on the issuer's systems, and then your credit score is used to decide whether or not to grant your application.

Excellent Credit

If you have an excellent credit score, you may well find that you get your approval straight away (but you still of course have to wait for your credit agreement to be sent out to you, then signed and returned, before you actually get your card).

Poor Credit

Similarly, if your credit rating is shot to pieces it may be an easy decision for the issuer to decline the application straight away.

The Rest Of Us

However, the majority of people have average credit ratings with either some small blemishes or maybe a simple lack of positive information such as previous responsible card usage, giving the issuer no real guidance on whether to instantly approve or decline.

In these cases, the decision is 'referred', or sent to a human application reviewer who will make the final decision, a process that can take days in some cases. This is obviously a long way away from 'instant approval'!

Choosing Your Credit Card

So it's clear that we need to take claims of instant approval with a pinch of salt. While this might be the reality for some 'prime' customers, most of us will likely have to wait some time for a decision, and so whether or not a card offers this feature shouldn't be a major influence on your choice of which card to apply for.