Applying for credit was tedious as it meant visiting the physical bank branch and submitting a long form.
Consumers had to gather documents and wait in line while the application process could be about six weeks, and the new credit card would be delivered in the next couple of weeks.
Nowadays, we can benefit from instant or guaranteed approval. What is the difference, and which option best fits your needs? Keep on reading to find the answer.
The Basics of Credit Card Instant Approval
Instant approval means your credit card application will be approved without delay. Once you mention all the necessary details and basic information, the underwriting algorithm of the card issuer will review your request in an instant and come back with a response. If you qualify for the credit card, your application will be approved.
The procedure is conducted on the web, so there is no need to travel to the physical bank or another financial institution.
No hassle or paperwork is demanded, and you will quickly receive an answer concerning your application.
Consumers with good and excellent credit ratings can benefit from instant approval as they don’t have to wait several weeks to obtain their new credit card. The best credit cards in Canada provide instant support and can be utilized for different purposes.
What Credit Cards Have Instant Approval?
More and more credit card service providers offer instant approval across Canada. Rewards, low-interest, cash-back and business cards may come with instant approval. These Canadian banks provide instant support for clients:
- American Express
- Capital One
- National Bank
- PC Financial
How Can You Get an Instant Approval Credit Card?
There are several ways to apply for this type of crediting tool: over the phone, in person, or on the web. The last option is the easiest and fastest one.
Certain information is required to proceed with the application, such as your:
- Current income
- Place of work and employment status
- Social insurance number
- Sometimes, other expenses and debt obligations
Your application will be checked, and your credit rating will also be reviewed. The better your credit score, the higher your odds of approval. Instant approval crediting tools are generally more suitable for borrowers with a decent rating.
The Basics of Credit Card Guaranteed Approval
Guaranteed approval presents a preapproved offer for consumers with poor ratings. This option isn’t as standard as instant approval.
You may select a secured crediting tool with guaranteed approval if you are a low credit holder and can’t qualify for a quick approval card. What is the purpose of such secured cards?
They work as a credit builder tool to help poor credit borrowers repair their bad ratings and obtain an instant approval credit card in the future. Card issuers won’t review your credit history as it doesn’t play an essential role in this process.
On the flip side, you are demanded to provide a deposit upfront if you request a secured credit card. This deposit is refundable, but it serves as a guarantee.
The Government of Canada platform offers an online credit card comparison tool. The filters and questions will help you narrow your search, view the results, and compare them. The interest rates, rewards, and annual fees can be reached here.
What Credit Cards Have Guaranteed Approval?
Although guaranteed approval isn’t so common these days, it may be helpful for borrowers who don’t have time to boost their poor credit rating and urgently need a new credit card. These Canadian banks provide guaranteed approval credit cards for clients:
- Capital One
How Can You Get a Guaranteed Approval Credit Card?
The eligibility requirements for getting guaranteed approval and instant approval are similar. You should be a citizen of Canada and be the age of majority in your home territory or province.
Many banks and service issuers require consumers not to have a credit card opened in their financial institution.
Besides, guaranteed approval works only for borrowers with a less-than-perfect rating, allowing them to rebuild and improve it.
Credit cards are widely accepted and used these days. According to a 2022 Statista survey of grocery shoppers in Canada, 55 percent of consumers claimed they utilized credit cards as the payment method on their most recent grocery trip. Cash was used by only seven percent of respondents.
Share of payment methods used on most recent grocery trip by shoppers in Canada as of February 2022
Guaranteed Approval vs. Instant Approval
The types of credit tools that qualify for each option are different. Instant approval is provided to consumers with good scores.
This is a form of an unsecured lending tool that demands no deposit. Guaranteed approval cards are typically secured as they are issued to low-credit clients.
Service providers want to ensure the borrower will use the credit card responsibly, so they demand a deposit for guaranteed approval tools.
You can qualify for instant approval and save time if your rating is excellent or good.
You can only qualify for guaranteed approval if your rating is in bad standing. Compare several cards to select the most affordable option that will help you improve your credit over time and be eligible for better conditions.
Ways to Boost Your Chances of Getting Instantly Approved
First of all, you should review your credit report. Do you know your current credit rating? Is it good enough to be eligible for instant approval?
Your credit report might contain some errors that lead to a lower rating. Do your research to seek eligibility criteria and understand if you meet them before you apply for a particular lending tool.
The Bottom Line
Many credit cards in Canada offer instant approval, while there are also guaranteed approval options.
You may qualify for one of these lending tools depending on your current credit rating and monetary needs.
Remember that even if you are approved instantly, you won’t be able to begin spending money immediately. It generally takes about a week for your new card to arrive in the mail, and you can use it.