The Trouble With An Instant Decision

Anyone interested in applying for an instant approval credit card may come across the phrase "instant decision". Although this seems to mean the same thing as instant approval, in actuality it can require a much more detailed and time-consuming credit check, potentially delaying your actual ability to use your new line of credit.

It'd be strange to find someone who doesn't like the mere sound of the phrase "instant approval credit card", especially someone who's had to deal with the hassles of a lengthy credit card approval process. Instant credit approval removes a lot of the stress involved with waiting by the mailbox for a credit card approval to come in, or with scheduling meetings or phone interviews with bankers or credit card company evaluators. Instead, just fill in a few fields of information, click a button or two, and there you have it - an instant credit card approval. But anyone applying for an instant approval credit card should keep two words in mind, and remember to keep away from them: instant decision.

Instant decision, distinct from instant credit approval, means something far different than one might think. When you apply for a credit card that offers "instant decision", you'll be rewarded with the assurance that you've been granted "conditional approval", which sounds fine. But it's important to remember that conditional approval always implies certain conditions. In this case, those conditions consist of a full credit check through a number of different credit bureaus before full approval is granted.

For one thing, this means more waiting than you might want to do before you get your actual far-from-instant credit approval. For another, this means potential damage to your credit rating. Any credit check, no matter how benign, can look bad to certain pairs of eyes, and instead of the single quick credit check offered by an instant approval credit card, you get a series of more detailed investigations. Thus, instant decision is a code word used by banks to appeal to anyone who'd be interested in an instant approval credit card - only those applicants don't actually get the instant credit card approval they want. Instead, they get the usual wait.

Instant decision isn't necessarily bad. In some cases, it can actually help you be approved for a credit card. True instant credit card approval requires meeting extremely demanding standards for any particular credit rating, standards which only about 4% of Americans meet, according to certain studies. If your credit is basically good but not necessarily top-of-the-line, a more detailed credit check can clarify any oddities that might show up on the single FICO-based instant credit approval check. And once again, it's important to remember that even with instant credit approval, you don't actually get instant credit. For security reasons, instant approval credit cards have to be mailed out and activated by the user before any credit purchases can be made. This is still potentially less wait than instant decision requires, but it's still a wait, a fact which a number of instant approval consumers seem to forget.

However, whether or not instant decision is an ill-conceived idea or not, the term can easily mislead anyone who's in the market for an instant approval credit card. So as always, use extreme caution when applying for a new credit card, and take the time to read the fine print whether you're applying for instant decision or instant credit approval.

Even though both are "instant", for some things it's worth taking a little bit of time.