While some potential cardholders may think of instant approval credit cards as a type of credit card that they will be approved for no matter what, these cards actually have strict eligibility requirements, just like any other credit card you may apply for.
When you apply for an instant approval credit card, you provide personal information that allows the card provider to make a near-instant decision on your application. As long as you meet the parameters set out by the provider, you will likely receive a preliminary approval in 60 seconds.
Then, as long as you meet the lending criteria, you will receive your new card in the post within one to two weeks. However, if you fail to meet the lending criteria on assessment by the provider, your application may be declined, or conditionally approved, pending more information.
Why do card providers perform credit checks?
When you apply for a credit card – any credit card – the card provider will perform a credit check to determine your credit worthiness. Why? Providing credit can be a risky business. That card provider needs to know the credit it provides will be repaid.
By looking at your credit file, a credit provider can assess how well you have dealt with credit in the past. If you have dealt with credit responsibly – paying your bills and repaying all debts on time – then it’s assumed you will cope well with any more credit provided to you in the future.
On the other hand, if you have bad credit – failing to make repayments or defaulting on your loans – credit providers may assume you would continue in this vein if they offered you more credit. The same applies to applicants who have no credit: no credit history is a risky unknown.
So, when you hit ‘apply’, the card provider will look at your credit file, your employment status and your income in order to assess your application. This information provides an indication of your likelihood and your ability to repay any money you spend on the card.
Who offers instant approval credit cards?
Plenty of card providers offer instant approval. You can check out a great range of instant approval credit cards right here on CreditCard.com.au. It’s simply a matter of comparing the options to find the right card for you, then taking some time to complete the application.
What else can an instant approval credit card offer?
Aside from instant approval, what else can you expect from an instant approval credit card? As ‘instant approval’ really only refers to the speed of which you can expect a decision on your application, instant approval credit cards can in fact span a wide range of cards.
You can find instant approval cards that are also rewards cards and frequent flyer cards, you can find instant approval cards with no annual fee and low interest rates. You can also find instant approval cards with introductory offers such as balance transfers and purchase offers.
In terms of balance transfers, you will need to provide the balance transfer information when completing the card application. This will be assessed by the provider, and if approved, will be transferred according to the card provider’s guidelines.
If you want certain features or rewards, make sure that the instant approval card you are interested in offers them. CreditCard.com.au makes it easy to compare all these factors as you check out a range of options side-by-side.
How do you compare instant approval credit cards?
Comparing instant approval credit cards involves the same process as comparing any other type of credit card. You would usually look at the annual fee, and compare that to what the card has to offer. Cards with higher annual fees will typically offer more in features and rewards, whereas cards with lower annual fees tend to be more basic.
As for interest, the importance of this factor depends on whether you carry a balance. If you carry a balance, choosing a card with a low interest rate above all other features may be the best choice. If you always clear your balance, you may benefit from a card with more features and a higher interest rate.
Instant Approval Credit Cards - Frequently Asked Questions
When you have bad credit, it can be difficult to get approved for a credit card. While the term ‘instant approval’ may sound enticing as a bad credit applicant, it does not mean you are guaranteed approval. Even with an instant approval credit card, you will still need to meet the criteria set out by the provider in order to get approved.
When comparing credit cards, look at the eligibility requirements as set out by the card provider. You may find some providers look more leniently on bad credit applications. What’s most important though, is to only apply if you meet that eligibility criteria. If your application is declined, that decision will be recorded on your credit file, which will not improve your standing.
While there is no way to guarantee your approval, you can improve your chances of being approved when you apply for an instant approval credit card.
- Apply for a copy of your credit file: You can apply for a free copy of your credit file from one of the credit reporting agencies. Detailing all your recent dealings with credit, this file is the one credit providers access when assessing your application. Check your credit file for errors – they’re more common than you may think. You can apply to have errors corrected by the agencies.
- Pay your debts: When you apply for a credit card, the card provider will ask about any debts you have. A mortgage is a ‘good debt’, but credit cards and loans may be considered a ‘bad debt’. Too many unpaid debts can make you seem risky to potential providers, so you may want to consider clearing some of your debts and reducing your credit limits before applying for another card.
- Ensure you have a regular income source: If you take out a credit card, it’s expected you will spend on it. What a potential card provider wants to know is that you will be able to repay what you borrow. Having a full time job and steady paycheque may make it more likely your application will be approved.
- Increase your savings: By showing potential card providers that you are responsible enough to save, you indicate to them that you not only know how to budget, but also that you have backup funds should you need them.
- Check your eligibility: While it’s certainly not as exciting as comparing fancy features and rewards programs, it’s still important you check eligibility requirements before you apply. If you don’t meet those requirements, it will usually result in a declined application. To be eligible for a credit card, you may need to be a citizen or resident of Australia, you may need to be over 18, and you may need to have good credit and exceed a minimum annual income.
When you receive an approval from an instant approval credit card, this is a preliminary approval based on the information you have provided. The card provider will then assess this information, and if the provider decides you do not meet the lending criteria, you may asked to provide further details. Alternatively, your application be declined.
If your application is declined – either at the point of ‘instant approval’ or afterwards – it’s generally not a good idea to apply for another credit card straight away. All credit applications are recorded on your credit file, so multiple applications may lead to another rejection.
Instead, you might want to review the eligibility requirements on the credit cards you are interested in, and then review your credit file to ensure you meet those requirements. You may want to spend time improving your credit file and employment status, and give it time before you apply again.
What information do I need to apply for an instant approval credit card?
The information you will need to provide will depend on the card provider, as all credit card applications differ. However, most card providers will require you to provide the following:
- Proof of identity: You will be asked to provide proof of your identity. This may be on a points system. You could provide your driver’s licence, your birth certificate or your Medicare card.
- Personal details: You will need to provide your full name, your residential address and any contact details.
- Employment and income: You will need to provide proof of your employment and income, which may involve providing the details of your employer and recent pay slips. If you're self-employed, you may need to provide your accountant's details and your last tax assessments. If you're retired, you'll usually need to provide evidence of your Centrelink payments or assets.
- Debts and assets: You may need to provide details of any debts in your name, as well as any assets.
- Balance transfer details: If you're applying for a balance transfer, you will need to provide the details of your existing credit card account and the amount you want to transfer during the application.