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Credit Card Applications » Questions » User Questions » Limited/Bad/Fair Credit » What are the parameters customers should be careful of in instant approval cards?

What are the parameters customers should be careful of in instant approval cards?

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Instant approval cards as the term suggests, are those credit cards where the applicant gets to know almost immediately whether he or she has qualified. There are some key benefits with these instant approval credit cards. For starters, the applicants don’t have to wait for an agonisingly long period of time before finding out whether they will get the card or not. They can then pursue their plans accordingly. Secondly some of these credit cards do not even apply the credit check which means customers who have a bad credit history, or worse still, no credit history at all, can also hope to get the credit cards. However, there are some parameters where customers have to be careful before they accept these instant approval credit cards to avoid trouble later.

These credit cards are known for their high interest rates, which are expected, given that there is higher risk in lending to no credit or bad credit individuals. But if the interest rates go soaring above 30 – 40% APR then the customer could be in real trouble as soon as they have an outstanding balance. The cost of the credit is too high which is the reason applicants need to be doubly sure before they apply for these credit cards.

It is not very difficult to get into credit card debt with these cards either. The credit limit is really low and the charges are very high. Sometimes, given that the application fees and activity fees combined are at their maximum of 25 dollars, the available credit for the customer could be less than 100 dollars. The biggest disadvantage of this is that customers could soon face the prospect of an overdraft fees adding up on their credit card debt. All it will take is a quarter before the outstanding balance and the debt to double up.

The interest rate and credit limit apart, there are other hidden charges which the customer has to be careful about as well. Ensuring that one goes through the fine print in detail is the order of the day. The hidden charges could include excessive late fees if the customer misses to make the payment on time, high cash advance fee if the customer withdraws money from their ATM or a high annual fee or transaction fee. All these hidden charges could well take the outstanding balance beyond the credit limit.

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