Although credit cards are widely used and available this doesn’t mean that every card issuer will approve every application. Those with no credit or an impaired track record may find that their applications are turned down by some companies. This may not be the case with guaranteed acceptance credit cards which are pre-approved and need no credit check. What are the pros and cons of this kind of card?
What are Guaranteed Acceptance Credit Cards?
These types of card are like any other but they come without the same application criteria. A card issuer that markets a guaranteed card generally offers pre-approval for acceptance. This may be useful for people that would otherwise find it hard to take out a card or for those that would prefer not to have to go through a credit checking process such as those with bad credit or no credit.
What Types of Credit Cards Come Pre Approved?
Actual products on offer in this sector depend on the individual card issuers. Some give out their guaranteed acceptance offers for:
- Standard unsecured credit cards.
- Secured card products.
- Prepaid cards.
Some card issuers offer a single type of pre approved product; others may offer a few different types.
Why do People Use Guaranteed Acceptance Credit Cards?
This often comes down to past financial history. People with credit problems often find that they will not qualify for regular card offers and are turned down by issuers. This leads many to worry about making further applications as rejections can add to the problems they have on their credit record. Some simply know already that their credit score will go against them and that their only option is a card without a credit check.
What are the Advantages and Disadvantages of Using Pre-approved Cards?
Some of the advantages of using these kinds of cards include:
- They allow just about anyone to get a credit card no matter how bad their credit history may be.
- With sensible management they can help build or repair a credit rating or score.
On the other hand, some of the disadvantages of these products include:
- They often come with higher interest rates than regular cards and a range of fees and charges.
- They may not actually be open to every applicant in every case.
It is important to weigh up these pros and cons before choosing whether to apply.
Things to Look Out for Before Applying for a Guaranteed Acceptance Card
Apart from making to sure to compare costs to try and get the best deals and rates here, consumers may also want to read the terms and conditions of any guaranteed acceptance card offer before they apply for it. This may help them make sure that they are applying for the right product.
For example, some card issuers will market pre-approved offers for standard credit cards but may state in their small print that they do not have to offer this type of card to every applicant. They may guarantee acceptance but that may mean taking out a secured card or a prepaid option instead of an unsecured product.
Carol Finch - Carol Finch is the Topic Editor for Retirement Planning, Budgeting, E-Commerce & Technical/Business Writing on Suite101.
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