How Credit Card Approval Works so Quickly?

If you’ve applied for a card recently you’ve probably seen promotional statements like “Get an Instant Decision” or “Approval in 60 Seconds or Less”. Nowadays, each credit card company has their own algorithm to determine your creditworthiness. They’ll take inputs like income, residential status (own/rent), credit history and more, and use all of that to make a decision. The application processing time could be anywhere from just a few seconds all the way up to a minute, or longer if they need more time to have a “live person” review your application.

We don’t know exactly how credit card approval works and what criteria banks use to determine instant approvals but there are a few things we know carry more weight than others. You should always ensure that you have a clean credit history with a low number of recent inquiries and of course the higher your credit score, the better. Income is also an important part of instant approvals since without income how would you pay back all the money you plan on spending?

Applications by Mail, Phone or Internet?

I still get targeted credit card offers by mail all the time but I rarely apply using that method. Instead, I like to apply over the internet or by phone since I can find out immediately if I’ve been instantly approved or not. If you’re sent a targeted offer for a certain card, there is usually an invitation code that can be used for online and phone applications. Both of these options will allow you to get an instant decision and possibly approval.

Just because you’re approved though, doesn’t mean you’ll get your card right away. It could take anywhere from a few days to a couple weeks after you’re approved to get your card. One trick that you can use to get your card a little faster is to call in and ask for expedited shipping after you get instant approval. Many companies will actually waive the shipping fee and you could have your card rush delivered for free if you ask nicely.

What Does It Mean If You’re Not Instantly Approved?

Unfortunately, not everyone is going to be instantly approved. If you have a low credit score you might even be instantly denied. It’s important to know ahead of time what your score is and what type of card you’re applying for. If you have a sub 700 credit score it wouldn’t make much sense to apply for Chase’s top of the line card: The Chase Sapphire Preferred Card.

Instead you might want to consider an entry level card like the Chase Freedom Card. That way you can establish some positive credit history and the next time you apply, you’ll have a better chance at getting instantly approved.

Your Application Needs Further Review

If the credit card issuer is unable to make a decision, they will usually set your application to pending status. All this means is that their computers are unable to make a decision at this time.

What to do if you’re not instantly approved

Think of it as being put on the ‘wait list’. They couldn’t quite justify an instant approval but they also weren’t ready to outright deny you. Pending applications are usually a good thing though since there are many strategies and tips you can use to nudge your application in the right direction.

Application for Credit Card Declined?

There are lots of reasons why your application might not be instantly approved. The most common reasons that I see with my own applications are too many recent inquiries and maximum amount of credit extended by the bank. I apply for 10-15 cards every year so it should be pretty obvious why the bank doesn’t like to instantly approve my applications. But even with that being said, when I apply for a credit card online. I have never been denied for a card after calling in to the reconsideration line.

Apply for a Credit Card Online: Check Your Online Application Status First

As soon as you submit your application you should know whether you’ve been approved, denied or gone pending. If your application is approved, then there’s no need to call the reconsideration line. If an application goes pending, I like to call the reconsideration line immediately but you can also check the status of your application online with most card issuers. Here are the websites that allow you to check the status of your application:

• American Express

• Barclaycard

• Bank of America

• Discover Card

The online application status websites above are really only useful in situations where your application goes pending. I’ve applied for certain Barclaycard, gone pending and just minutes later my application was approved when I checked the status online.

I also like to use this feature if my credit card application ever times out. Sometimes the page might stop loading or show an error after you submit it. This is a great way to check if your application went through since you wouldn’t want to submit the same application twice.

Calling the Reconsideration Line

When you apply for a credit card online You can call the reconsideration line any time after you submit your application, but the earlier the better. If you wait 2-3 weeks or more, the bank could force you to submit another application which would mean another hard inquiry on your credit report. So if your application goes pending or is denied outright, you’ll want to call as soon as possible.

For pending applications, sometimes all the reconsideration line will need is to verify some info. But other times they’ll ask you questions like “Why do you need another card with us?” or “Why do you have so many inquiries on your credit report?” In order to give yourself the best chance at getting approved make sure that you have good answers to these questions and you have looked at a recent copy of your credit report. You can actually get a free copy of your official credit report up to three times per year at annualcreditreport.com

What to do if You’re Not Instantly Approved

For more strategies about calling the recon line:

When you call the reconsideration line it forces the bank to take a fresh look at your application again. So even if you’ve already been denied once, you’ll get an independent review and another chance to convince the representative that you are worthy of a new credit card. If you’re ready to give the reconsideration line a try, here is a full list of all available numbers for you:

1. Chase Credit Card Reconsideration

• 888-245-0625 Available 7am-10pm EST Monday through Friday, 8am-10pm EST Saurday and 9am-9pm Sunday
• 800-453-9719(business)

2. American Express Credit Card Reconsideration

• 877-399-3083 Available 8am-12am EST Monday through Friday, 10am-6:30pm Saturday

3. Citibank Credit Card Reconsideration

• 800-695-5171 Available 7am-12am EST Every day

4. Bank of America Credit Card Reconsideration

• 866-865-7839 Available 8am-5pm EST Monday through Friday
• 800-481-8277 (Business)

5. Barclaycard Credit Card Reconsideration

• 866-408-4064. Available 8am-5pm EST Monday through Friday

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.

A Solid Credit Score

A bad or even mediocre credit score will rarely lead to instant approval. Instant approvals are reserved only for the best candidates. You might be wondering how you can become one of these best candidates and it’s actually easier than you think.

Believe it or not, everyone starts off with a high credit score. But if you make late payments, miss payments or get delinquencies, that’s when your score is going to drop. Payment history and amounts owed actually make up around 65% of your FICO score.

It should be obvious why payment history is important. Banks don’t want to lend money to people who don’t pay it back. But amounts owed also carries a lot of weight since banks don’t like to extend credit to someone who doesn’t have the income to pay it back.

If you only make $25,000 a year you’re going to have a tough time spending $3,000 a month on your credit card and paying it all back. That’s why it’s important to keep your balances low and you should always strive to pay off your bill in full every month.

Credit Card for Bad Credit Unsecured: Credit History and Inquiries Matter

It’s unlikely you will get a credit card for bad credit unsecured right out of the gate. If you’ve got a low credit score you’re most likely going to be instantly denied for your card. People in the middle are the ones who will likely get the pending screen and be forced to wait for a decision or call into the reconsideration line.

The most common reason for getting denied or pending is usually a low credit score and/or number of recent inquiries. Banks don’t like to see a lot of recent inquiries (especially if you don’t have much credit history) since it usually signifies a risky borrower so make sure that you space out your applications.

Why Not a Secured Card?

If you really don’t want a secured card ask yourself why not? You can often get a secured card with just $50 out of pocket. That’s a small fee to start rebuilding your credit. So, how much credit card limit will you have? Maybe not much, possibly just $50, but often with a $50 deposit you can get a $200 limit – Capital One does that frequently with a secured card that costs just $29 a year annual fee. Think about it.

Manipulate Your Score

If you want to give yourself that extra edge when it comes to getting instant approvals there are a few tips and tricks you can use to manipulate your credit score. The first thing you’ll want to do is pay off any of your other card balances two to three weeks before you apply (and keep them paid off). This will lower your utilization rate or amounts owed which accounts for 30% of your score. You want to do this ahead of time since there is often some lag between when you pay off your accounts and when it gets reported to the credit bureaus.

If you don’t have the money to completely pay off all your cards, try to spread it around so that no one individual card has too high of a balance. Credit card companies will look at your overall utilization rate and the amount owed on each card.

The last thing you can do is get added as an authorized user onto a friend or family member’s account. This will give you an extra account on your credit report and help increase your total available credit. Ultimately, you can’t guarantee yourself an instant approval but it’s all about putting yourself in the best position possible.

Credit Card for Bad Credit Instant Approval: Your Application is Pending

A pending application isn’t the end of the world but you will need to take a few steps to nudge your application in the right direction. I like to move quickly on these so as soon as one of my applications goes pending, I’ll call in right away to the reconsideration line.

Most banks have unlisted reconsideration lines that are used for situations just like this. All you need is your social security number or application number and the representative should be able to find your application with that info alone.

Often times, when applications go pending the bank just needs a little more info or maybe you made a small error on your application. There are lots of reasons why you think you are filling out a credit card for bad credit with instant approval but then it’s not instant; an application may go pending but even if you’re denied it’s still not the end of the world. Just give the reconsideration line a call but be ready to answer some tough questions.

Don’t Give Up If You’re Denied

Most applicants probably think it’s the end of the line when their application is denied. But if your application is denied you’re not a lost cause quite yet. You can actually call into the same reconsideration numbers and get someone to take a fresh look at your application again.

This is important because you want to be able to explain your situation and try to convince the customer service representative why you need this card. Your reasons might be solely because you want the bonus miles but that isn’t what you should tell the rep. Here are a few tips to keep in mind when calling the reconsideration line:

• What’s Your Credit History Look Like?
  One of the most common reasons for pending or denied applications is “too many inquiries within the past several months”. But maybe you were shopping around for a mortgage re-finance or looking for a car loan. If you can explain to the representative why you had so many inquiries and what each was for then it’s likely that they may reverse their decision. Get a copy of your credit history for free at annualcreditreport.com and take a look at your inquiries before you call in.
• Know Why You Want This Card
  As I mentioned earlier, you don’t want to tell the rep that you like this card because of it’s large sign-up bonus! Instead, mention that you like the benefits the card offers like double points on dining or no foreign transaction fees. If it’s an airline co-branded card for example, you can mention that you have a lot of upcoming flights with that airline so you’d like to purchase the flights with that airline’s credit card and try out their points program.
• Leverage Other Credit Cards
  It’s important that you never close any existing cards with that bank prior to calling in since these cards can be used as leverage for your new application. Often times, banks will let you transfer credit from other cards if you’re maxed out on credit with them. Or as a last resort, you can offer to close one of your existing cards that you no longer need/use in order to get this one opened.
• HUCA or Hang Up Call Again
  This is a strategy I’ve employed myself many times since every time you call a reconsideration line they have to do just that: reconsider your application. They might come to the same exact conclusion as the last representative but it’s also possible that you eventually find the right person who’s willing to work with you and approve your application. So never give up!

If all else fails, spend some time at credit card comparison websites, such as CreditCards.com. Find a card that has requirements which might work for you, like a secured card or department store card. Remember, there are always options for even the lowest credit scores.