It seems quite reasonable to receive instant approval for credit cards. Think of getting a credit card then applying for it and within a few minutes, you are approved not the usual long process. These cards offer the assurance of being able to obtain credit easily and when you need it most or if you are in a hurry to build your credit score. However, are the mentioned cards as good as they appear to be?
1. The Convenience of Instant Approval Credit Cards
Instant approval credit cards are thus convenient in that one can get a credit card in a very short period of time. To many, the prime benefit is the quickness. As opposed to conventional credit cards that can take days, sometimes weeks to be approved instant approval credit cards approve within minutes. This is especially useful when you require credit fast, be it for a certain purchase or for an emergency. Another advantage is that a number of these cards are issued to those with credit that is not very good. Credit cards for bad credit Canada are designed for those, who need to reconstruct their credit as they offer a possibility to do it.
2. Understanding the Fine Print
Although you could apply for instant approval credit cards, there are some things that you should know concerning the cards. This is one common disadvantage: A company may be offered a loan at an average interest rate of 6% while the facillitating organisation charges, say, 8%. These forms of cards are commonly sold to those with bad credit scores, and since the issuers take a higher risk, they charge higher interest rates. Moreover, most of these cards attract certain fees such as the annual fee, late payment fee, and foreign transaction fee. A borrower should always be cautious and go through the small print in as much as the card as possible in order to avoid any hidden charges. This way, you will not be caught off guard and can establish that the card serves your purpose.
3. The Implications in Terms of Credit Rating
This means that even when in need of an instant approval credit card, it is advisable to be careful since it influences the credit score. If you filled out a credit application for a new credit card, this would involve the issuer pulling your credit report. This results can slightly reduce your credit score by a few points for some time. The effect of this might be felt more if you apply for many instant approval cards in a short duration. But if you are timely in your payments and ensure that you only spend a small amount on your credit card, it will actually help in the gradual raising of your credit score. Credit Building Credit Cards Canada are one of the best examples of how credit can be useful if properly managed.
Conclusion
Instant approval credit cards as the name depicts can be very beneficial but they do have some disadvantages. Other elements include the interest rates, fees, and the effect on the credit score. Hence, it is wise to compare the relative advantages and disadvantages or consider other products such as Guaranteed Approval Loans for Poor Credit Canada or credit cards which require collateral. Knowledge enables you to make the best choice of the financial product suitable for you. To learn more about managing your credit, and tips on the topic, check out LoanSpot.ca.
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