Saturday, November 1, 2008

You've Been Approved For An Instant Approval Credit Card! Now What Happens?

It's a great feeling when you receive approval for anything you do but it's especially gratifying when it comes to an instant approval credit card. There is something intensely personal about one's finances and creditworthiness that creates a good feeling of validation when that credit card with an instant approval decision comes back with a resounding "Yes!"

So once the good news has been received what comes next? Well, some credit card issuers may say they offer credit cards with instant approval but what they provide is actually just a conditional approval to keep you satisfied while they pull a full credit report from the three credit bureaus after the fact in order to cover their bases. This process is actually called "instant decision" by the banks but is not a true instant approval credit card. The banks and credit card issuers that are included within the links for Instant Approval Credit Cards only include those that are truly "Instant Approval", so rest assured we are aware of this difference.

A common expectation of consumers who seek instant approval credit cards is that they will immediately have access to the credit that has been approved by the bank or credit card issuer. In some cases this may be true but in general consumers will have to wait one or two weeks for their physical credit cards to show up in the mail before they can actually make purchases. There is also an additional layer of identity validation that is involved once the physical card shows up in order to protect the bank and the consumer from identity theft. The activation process involves calling from the home phone listed in the original application and verification of the last four digits of the consumer's social security number. Typically "instant use" or "instant credit" type accounts are offered in conjunction with major retailers to provide extra impetus to make a big ticket purchase. Many private label store cards provide this type of credit card with an extra incentive of getting 10% off the first purchase. But beware of the impact of having too many of these types of credit card trade lines open as they can adversely impact your personal credit score.

Another factor to consider before making an instant approval credit card application is either knowing or having a good idea of your credit score. Most credit decisions made by banks and lending institutions in the U.S. are based on what is called a FICO score, which is calculated by a company called Fair Isaac & Company. Those with less than good credit will usually be declined through an instant approval credit card application process, which can in turn further degrade the consumer's credit score due to excessive credit bureau inquiries.

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