Credit cards play a pivotal role in our everyday life. Almost all our daily transactions are dependent on credit cards. Therefore, it has become almost imperative to possess a credit card that comes with lucrative benefits and is not too heavy on the pocket.
An essential criterion to receive a swift approval for a credit card is to have a good credit score. Otherwise, most banks reject credit card applications on the grounds that the applicant has not met the minimum requirements.
This is where guaranteed approval credit cards come into play. Highlighted below is a detailed guide about what these credit cards are and how you can derive maximum benefits, despite having an average credit score.
What Are Guaranteed Approval Credit Cards
While the name may suggest that the applicant is guaranteed to receive a credit card, there are still some minimum criteria that need to be fulfilled. Therefore, the term ‘guaranteed’ becomes a bit of a misnomer.
However, the eligibility criteria is minimal and mainly pertains to your personal details, personal income, and financial information. Please ensure that you go through the terms and conditions of guaranteed approval thoroughly prior to submitting your final application.
The primary benefit of signing up for a guaranteed approval card is that your application is not subject to your credit score. In fact, many applicants apply for such guards to rectify their credit scores so that they can be eligible for an everyday rewards card in the future.
Features At a Glance
Guaranteed approval credit cards possess similar features to most regular credit cards. However, they are designed to keep the requirements of individuals with low credit scores under consideration.
Typically, you would find these cards providing a higher purchase APR as compared to conventional credit cards. Moreover, the annual fees that you would have to pay would also be on the steeper side. Additionally, you might not receive any rewards or points on your purchases.
Types of Guaranteed Approval Credit Cards
Unsecured Cards with No Deposits Required
If you are scouting for a card that does not require an initial deposit, then these may be best suited for you. However, these cards have a higher interest rate as compared to secured cards wherein you are required to pay a deposit fee.
Furthermore, you may also be charged some additional fees for processing payments and other charges. Therefore, it is recommended that you select an unsecured card that goes in line with your personal spending habits to ensure minimum charges.
Secured Cards with No Credit Minimums
These cards do not call for any minimum credit score requirement and there’s no specific credit history needed to seek approval. However, there is a specific amount of deposit that you are required to make in order to ‘guarantee’ your approval.
This deposit amount, along with your existing credit score will determine the credit limit of your secured card. In order to achieve a greater credit limit as per your spending patterns, it is recommended that you pay a proportionate deposit.
Eligibility Criteria
In order to be eligible to apply for a guaranteed approval credit card, all major banks have common primary eligibility criteria that applicants are expected to meet. These include the following points.
- The applicant must be a resident of their respective country, depending upon where they are applying.
- The applicant must be 18 years or older.
- The applicant must agree to the mentioned terms and conditions.
- The applicant should possess a valid mode of payment to pay the enrollment fees.
The Bottom Line
Guaranteed Approval Credit Cards are not equipped with all the features of a regular credit card. However, they are a great boon for individuals looking to improve their credit score prior to applying for a full-fledged credit card.
