Credit Card Applying : We Take Instant Approval For Granted

Now a days we kind of take instant approval credit cards for granted. When we try for a credit card applying online is expected to be instant. And, in fact, nearly every card out there offers instant approval; it would actually be strange to find one that didn’t. I haven’t been instantly approved for every card that I’ve ever applied for but I always knew that it was at least a possibility with credit card applying online.

You won’t get any extra bonus points or help your credit score by gaining an instant approval but you do get some peace of mind. Instant decisions will really only tell you whether you’ve been approved, denied or your bank needs further information (pending). For most people, it’s the peace of mind that’s the nicest part about instant approval cards. But there are still some cards that try to take advantage of the term ‘instant approval’.

Cards to Watch Out For

Sure, you want to choose the best credit card company. But the truth is that most of the cards you see advertised on TV and radio offering instant approval are from big reputable banks. These are all reputable: Chase, Citi, Barclaycard, Capital One – these all have good reputations and are honest banks. But there is another class of instant approval cards that are often prepaid or have yearly or even monthly annual fees. These are cards that you need to watch out for since generally they are offered to people who don’t have the credit to get a more reputable card.

The main reason why these cards aren’t good for consumers is because they try to lure customers in with the benefits of instant approval but they aren’t really offering the benefits of a true rewards card. Instead, they are laden with fees and other charges that most customers might not even be aware of.

When Should You Pay A Fee To Use A Credit Card?

You might be wondering how you can tell the difference between a good annual fee and a bad annual fee and it’s actually a lot easier than you might think. Some instant approval cards charge you fees just to open the credit card and make normal purchase on it. They offer low to non-existent rewards programs and they are really just trying to take advantage of unsuspecting customers.

A good annual fee card will offer a wide variety of benefits that you won’t find with an entry level credit card. If you were to apply for an airline card with an annual fee, you should expect to also receive benefits like free checked bags, priority boarding, lounge access and maybe even no transaction fees. So make sure that you balance the fees offered by a card with the benefits in order to determine whether or not you’re getting a good deal.

Have You Moved Recently?

Your credit history will list all of your past addresses but it doesn’t know where you currently reside. So if you move to a new address and don’t give the credit bureaus time to update their records, a new application with a brand new address will set off red flags.

Credit card companies do this as a precautionary measure against identity theft. So if you apply with an address that isn’t on your credit report, they will put your application on hold until they’re able to verify your address. Sometimes they won’t call for up to a week though so it’s important to be proactive in this situation. Any time you’re not instantly approved, you should try and call the reconsideration line immediately.

Name and Social Security Number Please

The most important part of your application is really your name and social security number. Without it, banks have no way to verify your identity and ensure that you are who you say you are. Make sure you don’t rush through this section too quickly since a typo here will definitely hold up your application.

Normally, after you submit an application for a new card there is a confirmation page that will pop up. Take a close look at this page and ensure that all of the information listed is correct. It’s a lot harder to change things later than it is at this point in the process.

How Credit Card Applications Work: Proof of Identity

We don’t always know what’s going on behind the scenes at credit card companies. Sometimes even if you have good credit, you’ll still have to verify your identity. And each bank has their own verification process. I’ve had to do everything from send in copies of my driver’s license to submitting tax forms.

If this happens to you, don’t worry, it’s just a part of the process. Be persistent and make sure you follow-up with the credit card companies to ensure that your card will be approved as quickly as possible.

Inquiries Tend to Trip People Up

Even if you have a very high credit score, there is still one thing that credit card companies don’t like to see: lots of inquiries. Remember, for the most part how credit card applications work is that they check your credit score. Since new credit inquiries make up only 10% of your score, you can potentially have 5-6 recent inquiries and still have a very high score, but more inquiries than that can damage your credit pretty significantly.

Inquiries will fall off your account after two years, so if you spread out 5-6 inquiries over two years that isn’t a big deal to most banks. But if you have 5-6 inquiries in the past few months, most card issuers are going to wonder why you suddenly need all of that credit.

When you ask how credit card applications work, you need to know that if you are not approved instantly you can call the bank to talk to them about your application, trying to persuade them to accept you. If you decide to apply with recent inquiries, just make sure that you have reasons why. That way, when you call into the reconsideration line you can tell them you were shopping for a mortgage or need a couple extra cards for an upcoming vacation.

Remember, too, that your credit card limit is based on income as well as your credit rating. If you make a lot of money but have too much credit extended to you already or have a poor credit score you may get a very low limit. But you could make just $20,000 a year and if you have no other debt you might get a pretty high limit, with a good credit score.

Shopping passively

The vast majority of people start out their credit life by waiting for credit card offers to arrive in the mail, and then randomly applying for one that seems good. Those marketing letters and advertisements you get in the mail can be helpful because the credit issuers have identified you as a potential customer. With hundreds of cards on the market, however, they’re just the tip of the proverbial iceberg. Want to know what to know before applying for credit cards? Well, look beyond marketing.

Would you buy a car or a house this way? Of course not! You would be active, checking out as many of the available deals as possible, and then narrowing the list to your top choices. Know what to look for when applying for credit, and then go from there.

• Take the time and use your energy to research the best in class. You may qualify for a far better account than the one that landed in your mailbox. Want to know what to look for when applying for credit card? It varies depending upon your needs. You may just be looking for the least expensive card that fits your credit profile. But if you have good credit then look for rewards.

What to know before Applying for a Credit Card: Avoid Flooding the market

Another no-no is to be overly aggressive with credit applications. When so many cards look great, and you need one now, you’re tempted to apply for a whole slew of them at once.

What to know before applying for a credit card is not to do this! Applying for credit cards can hurt your credit score. Inquiries are not as important as payment history and the amount of debt you have in relation to what you can borrow, but too many in too short a span of time will lower your score. This is particularly true if you don’t have much in your credit history files yet. A rash of hard inquires makes you look desperate and needy, and just as in the dating world, those qualities are not looked upon favorably. Even if you have a fantastic score, it can drop a little

• Albeit temporarily
• with a glut of applications. Some creditors might even just decline your application, even with a great score, for the sole reason of too many recent applications.
• Yes, applying for credit cards hurt credit scores if you do it too much. Only apply for one card at a time. If you get rejected, find out why. Fix the problem and apply again.

Over or under valuing yourself

Just as you would not pursue a job that you not qualified for or for which your skill set is far above the requirements, you shouldn’t apply for a credit card that is beneath or above your level. If the account is designed for people with less stellar credit than yours, you could be charged too much in interest, or the card won’t have the rewards program you deserve. If the card is intended for customers with a higher credit score, you won’t get approved anyway, causing your credit score to be hit with one more inquiry that went nowhere. Make sure you read the terms of the agreement for their qualification standards before you apply. If it’s not clear, call the creditor. It might also be a good idea to look out for websites that share information of the average credit required for the card you intend to apply.

If you haven’t checked your reports in over a year, and your scores in the past month, do so before filling out a single application. This way you can know for sure which products will be a perfect fit.