Credit Cards With Instant Decisions - Who Needs Them?
Consumers are constantly urged to favour credit cards that come with an instant decision on the application
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However, given that - at least at first glance - instant decision seems to be far better for the credit card issuer than for the holder why is this?
First, let's consider how this form of application benefits the issuer.
In the first instance, numerous pieces of independent research have shown that the quicker a consumer can complete an application the more likely they are to carry it out.
Similarly, if there are two parts to a form the number of people who fill out the second part decreases sharply given a gap in time.
In this sense instant decisions make sense because they get many more consumers to go from credit card comparison to actually owning the product than is the case with a manual application, especially when it must also be verified by a third party.
Instant decisions also benefit the issuer in that they make a virtue of a part of the credit card application process which is common to all applications in any case.
The first stage is always automated and some applicants accepted straight away - some providers just speed that up and tell the applicant straight away.
All of the above being the case - why should consumers care about whether a credit card has an instant decision? There are three reasons.
The first is that instant decision credit cards just speed up the process.
This is obvious but it's not obvious how important it is - remember that you need to factor in the time you spent looking for you credit card.
If you're rejected instantly that's time you don't need to spend again - you already have the available deals at your fingertips.
Second, when you're applying for an introductory offer with products such as 0% purchase credit cards or balance transfer cards it's important to get hold of the card as soon as possible in order to save as much money as possible.
A few days either way could be a problem, especially near the end of the month.
Finally, instant decisions can sometimes advertise which credit reference agencies they use to make their decisions. This can be useful because consumers can check the report with the correct agency before they sign up.