Instant Approval Credit Cards May Not Offer What You Seek

Instant approval credit cards can mean different things to different people. Are you seeking:

• An instant answer upon applying? This is common among credit cards from major issuers. Often, if you apply for a credit card online, you can expect a yes or no within seconds.

• The ability to use your card instantly after approval? This is less common, but not unheard of. Some cards do issue temporary instant numbers that you can use until your physical card arrives.

• "Guaranteed approval," no matter your credit? Technically, there's no such thing. But some cards designed for those with bad credit or no credit do promise that they're "easy" to get — although they can be costly.

The point is, instant approval doesn't mean immediate card access, nor does it promise blanket approval for all applicants. Here's a closer look at the differences.

Instant approval vs. instant access vs. guaranteed approval

• Instant approval credit cards

• Instant access credit cards

• Guaranteed approval credit cards

• Other options to consider

Instant approval credit cards

Instant approval credit cards are the norm these days. Major credit card issuers like American Express, Chase, Citi and more can give you a "yes" or "no" within seconds of receiving your online application and reviewing the data you included, like your Social Security number, income and contact information.

An instant answer isn't always a sure thing, though. Some applications — especially from applicants with bad, thin or no credit — may require a more thorough evaluation, meaning you may have to wait days or weeks to find out. But if you already have good to excellent credit (FICO scores of 690 or higher), you can generally expect a quick answer.

Assuming you're approved and notified that a card is being mailed to you, be aware that delivery times vary depending on the card issuer. Typically, you can expect a wait of a few days up to a few weeks. In the majority of cases, you won't be able to start making charges on your account until you receive the physical card in the mail.

But there are exceptions.

Instant access credit cards

You may not always have to wait for the physical plastic (or metal) to hit your mailbox. Once you're approved, some issuers do offer instant access to your credit line, often in the form of a temporary virtual card number, which you can use to make purchases until you receive the actual card.

Immediate credit access is not a given, but it's a trend that's been picking up steam recently. American Express offers the feature on all of its consumer cards, and it's also fairly common for co-branded credit cards — those offered in partnership with a retail store, airline or hotel — to allow immediate card use on in-brand purchases.

Major issuers and their policies on instant credit access:

Guaranteed approval credit cards

Credit cards that guarantee approval don't really exist. U.S. federal law prohibits lenders from extending credit to someone unless they think the person has the ability to make payments. (Even if you're pre-qualified or preapproved for a credit card, it's more like a "soft" yes.)

But there are credit cards that advertise significantly lower barriers to approval. Many of them are from so-called subprime specialist lenders, companies that offer credit cards designed for those with bad credit (FICO scores of 629 or lower).

These cards can be easier to get — some may not require a credit check at all — but they often charge high fees, sometimes hundreds of dollars a year. Many of them lack upgrade paths to better products once your credit has improved, and some don’t even report payment activity to the U.S. credit bureaus. That defeats the purpose of getting such a card, which is to build your credit.

» MORE: Credit cards that offer pre-qual or preapproval without a hard pull

Other options to consider

Even if you have poor, thin or no credit, products from subprime specialist lenders aren't your only option. The following kinds of credit cards do not guarantee approval either — again, no card can — but they're likely to be less expensive to carry, while offering other benefits like credit reporting and/or upgrade paths when you're ready to move on:

1. Secured credit cards

Secured credit cards require a refundable cash deposit, which is usually equal to your credit limit. The deposit reduces the risk to the issuer; in the event you don't pay your bill, the card issuer will close the account and use the deposit to pay the outstanding charges.

You use a secured card just like any other credit card, making purchases and paying them off. If you make payments on time and keep your credit utilization low, the card can help you build good credit. And when you close the account or upgrade to a regular unsecured card from the same issuer, you get your deposit back.

Here are some of NerdWallet's top secured credit cards:

For rewards and upgrading: Discover it® Secured Credit Card

The Discover it® Secured Credit Card has been a NerdWallet favorite because it offers rewards — a rare feature on secured credit cards. The card gives you 2% cash back on up to $1,000 worth of combined spending per quarter at restaurants and gas stations, and 1% back on all other spending. The card has a bonus offer: INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match. It also offers a path to upgrade: After seven months, Discover begins reviewing your account to determine whether your account can be upgraded to an unsecured card. The annual fee is $0. The minimum deposit is $200; the maximum is $2,500. It doesn't require a credit score to apply.

» SEE: Credit cards that give instant rewards

For low deposit: Capital One Platinum Secured Credit Card

The no-annual-fee Capital One Platinum Secured Credit Card allows some applicants to qualify for a $200 credit limit with a deposit of $49, $99 or $200. You can increase your limit to a maximum of $1,000 by depositing more money before activating the card. These deposits can also be made in installments. You could gain access to a higher credit limit with no additional deposit if you pay on time for as little as six months. Approval standards are tighter for this card than for some others. You must have a bank account, and your monthly income must be at least $425 more than your rent or mortgage payment.

For no credit check or bank account: OpenSky® Secured Visa® Credit Card

The OpenSky® Secured Visa® Credit Card card doesn't require a credit check, and you can pay your bill with a debit card, wire transfer, money order or check. That's helpful if you don’t have a bank account. In addition, the card reports to all three credit bureaus. Two potential downsides, however: The card charges an annual fee of $35, and OpenSky doesn't have great options for upgrading. In the long term, it's an expensive and limiting option.

» MORE: NerdWallet's best secured credit cards

2. Alternative credit cards

You're not necessarily limited to secured products either. Some newer unsecured credit cards can opt not to rely solely on traditional FICO scores to evaluate creditworthiness. Two cards from Petal — the Petal® 1 Visa® Credit Card and Petal® 2 Visa® Credit Card — are good examples.

Petal's issuing bank — WebBank, Member FDIC — can use proprietary underwriting, taking into account factors like an applicant's cash flow. This could make either card a good choice for someone who lacks a strong enough credit history otherwise.

Again, neither card requires a security deposit, and both report your payments to the three major credit bureaus.

» MORE: NerdWallet's best alternative credit cards

3. Student credit cards

You'll often need at least some existing credit to qualify for a student credit card, and in most cases you must also be an enrolled student.

But some student cards — like the Discover it® Student Cash Back and the Discover it® Student Chrome — don't have any kind of FICO history requirement for applicants.

Neither of these Discover products charges an annual fee or security deposit, and both earn rewards.

» MORE: NerdWallet's best student credit cards

4. Store credit cards

Store credit cards generally have less stringent credit requirements, meaning they can be easier to get than other kinds of cards.

But you'll still usually need at least fair credit to qualify (FICO scores of at least 630), and you'll also likely encounter higher APRs and lower credit limits with these kinds of products. In addition, you may run into acceptance issues: Some store cards are "closed loop" products, meaning you can't use them for purchases outside of the brand.

» MORE: NerdWallet's best store credit cards

5. Authorized user credit cards

If you become an authorized user of someone else's card account, you'll get your own credit card with your name on it — no credit check required.

That's because you're not opening an account; you're merely being added to a primary user's account (often a spouse or parent). Even though you'll be able to make charges with the card as an authorized user, the primary user is the one responsible for actually paying the bill.