5 Best Instant Approval Credit Cards for (Re)Building Credit
Black Enterprise magazine Fall 2019 issue

Is your credit score holding you back? The National Fair Housing Alliance (NFHA) cites a study by the Consumer Financial Protection Bureau (CFPB) in which the CFPB examined credit scores among 200,000 consumers. The agency found geographic locations with higher concentrations of people of color also had lower median credit scores. According to the NFHA, credit damage is the result of subpar lenders and disproportionate impact from the foreclosure crisis, both of which have plagued African American communities.

If your credit score is below 649, then the chances of being approved for a credit card lessen. One of the easiest ways to improve a bad credit score is rebuilding your credit with a credit card that has high approval ratings and a quick approval response. With a more forgiving credit card, you can gradually repair your credit and strengthen your financial health.

Learn how to improve your credit score with five of the top instant approval credit cards in 2019.

Our Picks:

  1. Discover it® Secured: Best Secured Credit Card
  2. Capital One® Spark® Classic for Business: Best Card for Small Business/Entrepreneurs with Average Credit
  3. Discover it® Student Cash Back: Best Card for Students with No Credit History
  4. Fingerhut Credit Account: Easiest Approval Process for Poor Credit
  5. OpenSky® Secured Visa® Credit Card: Best for Low APR

1. Discover it® Secured: Best Secured Credit Card

Some secured cards—such as the OpenSky® Secured Visa® Credit Card—may not offer the option to switch to an unsecured card once credit has improved. However, the Discover it® Secured Credit Card allows you to upgrade, so you can continue building credit.

The Breakdown

  • $0 annual fee
  • 24.99% Standard Variable APR
  • Minimum $200 security deposit, maximum $2,500
  • 10.99% balance transfer for six months
  • 2% cash back and cash back match at the end of the year
  • Credit reporting to credit bureaus

The Pros:

With this “instant approval” credit card from Discover, you have the ability to upgrade to an unsecured card in as little as eight months. Discover will automatically review your account to determine eligibility, so customers with good credit habits are rewarded faster.

The card also allows for a more generous deposit, so you can increase your credit limit and improve your credit score.

The Cons:

There is a 10.99% balance transfer rate, similar to the student card, but overall, there are very few disadvantages when it comes to this specific secured card.

Apply Online

2. Capital One® Spark® Classic for Business: Best Card for Small Business/Entrepreneurs with Average Credit

This card is the best option for entrepreneurs and small business owners with less-than-perfect or average credit. Strengthen credit for your business and open up more financial opportunities.

The Breakdown

  • $0 annual fee
  • 25.24% variable APR
  • No foreign transaction fees
  • Unlimited 1% cash back rewards
  • Credit reporting to credit bureaus
  • Easy online accounting options
  • Travel and emergency assistance services

The Pros:

Aside from its $0 annual fee and lack of foreign transaction fees, this card really caters to businesses. It offers free employee cards, fraud coverage, the ability to purchase your QuickBooks™ records, and more.

This credit card is also a good option for new entrepreneurs who have limited business credit and want to continue building their business credit.

The Cons:

For those with very bad credit, this is not the “guaranteed approval” you may be looking for. This card is designed to help businessmen and businesswomen with fair or limited credit to build their existing business credit.

Apply Online

African American student needing to build credit history

(Photo by Pixel-Shot on stock.adobe.com)

3. Discover it® Student Cash Back: Best Card for Students with No Credit History

If you’re a student, then you probably don’t have a long credit history. The longer your credit history, the better your credit score may be, and in turn, the more likely you are to be approved for a credit card. It can be a catch-22. But this credit card from Discover can be the key to building credit history for individuals still in school.

The Breakdown

  • $0 annual fee
  • No late fee on first late payment
  • 0% initial APR for first six months, then 14.99–23.99% Standard Variable Purchase APR
  • 5% cash back at specific retailers, 1% cash back for all other purchases
  • Rewards for good students
  • Credit reporting to credit bureaus

The Pros:

The Discover it® Student Cash Back Credit Card has a low APR and no annual fee, which makes it an affordable option for students. Students not used to paying monthly credit card bills will also have some flexibility if they miss their first payment.

In addition, the card offers excellent cash back rewards and a $20 statement credit each school year (up to five years) for students who maintain a 3.0 GPA or higher.

The Cons:

Be aware of a 10.99% balance transfer fee for six months, which may be overlooked in comparison to the low APR and $0 annual fee.

Apply Online

4. Fingerhut Credit Account: Easiest Approval Process for Poor Credit

Have a credit score closer to 500? If you’re in the fair to poor credit range (or you have little credit history at all), then this card may be your first step in improving your credit.

What’s interesting is that there isn’t a physical card for this credit account. Rather, you purchase Fingerhut goods from their catalog online and increase your credit through payment.

The Breakdown

  • $0 annual fee
  • 29.99% APR
  • $39 late payment fee
  • Good for qualified purchases with Fingerhut retailers
  • Provides credit reporting to credit bureaus
  • No deposit required

The Pros:

If you have trouble getting approved for a credit card, this card may be your foot in the door to building credit. And, you’ll have the added advantage of low monthly payments and no annual fee.

If you don’t qualify for the credit account, you can also apply for a WebBank/Fingerhut FreshStart Installment Loan, which can help you finance purchases over $50. This can be an advantage for consumers who need to purchase more expensive items, but can’t get a credit card.

The Cons:

Unfortunately, the Fingerhut Credit Account has a higher annual interest rate than other “guaranteed approval” cards, reaching nearly 30%. And, those with an account are limited to retailers in the Fingerhut catalog, which doesn’t allow you to find more competitive prices on certain items. However, if you make your payments on time each month, then purchases from Fingerhut’s extensive catalog will still improve your credit and build your credit history.

Apply Online

5. OpenSky® Secured Visa® Credit Card: Best for Low APR

With the OpenSky® Secured Visa®, you’ll get all of the benefits of a Visa card but with the ease of an instant approval credit card. According to OpenSky®, 99% of its customers were able to improve their credit score in as little as six months. But the biggest advantage is its low annual interest rate.

The Breakdown

  • $35 annual fee
  • 19.64% variable APR
  • 3% foreign transaction fee
  • No monthly fee
  • Minimum deposit $200, maximum $3,000
  • Credit reporting to credit bureaus

The Pros:

With a variable APR of only 19.64%, this credit card ranks much better in low interest rates than other secured or instant approval credit cards. It also offers a relatively high credit limit (in the form of a deposit) than other secured cards.

In addition, there is no required credit check for this credit card, so those with bad credit have a higher chance of approval.

The Cons:

Unlike other cards in this list, the OpenSky® Secured Visa® Credit Card has a (reasonable) annual fee and a few other overlooked fees.

Apply Online

Do “Instant Approval” Credit Cards Guarantee Your Approval?

You have probably heard the phrase “instant approval card” or “guaranteed approval” while searching for a credit card for bad credit. Instant approval for any credit card requires an excellent credit score, but the cards marketed as “instant approval cards” or “guaranteed approval” are more lenient in their requirements. That way, you may be able to build your credit even if your score is subpar or if you have no credit history. However, these cards may require that you only make purchases from a specific catalog of items.

While good credit can give you an approval right away (within 60 seconds for some cards), an instant approval is never guaranteed. And, it can take up to a week to actually receive your credit card if you are approved.

The following are factors that can affect how quickly you are approved for a credit card:

  • Some cards may give an instant pre-approval, but an official approval can take longer.
  • Your application may need further review or additional details for an approval, delaying the approval by a week or more.
  • If your application information was incorrect or incomplete, the response will be delayed.
  • A denied application may not prompt an instant approval.
  • Secured credit cards are more likely to give a faster approval response, especially if there is no credit check required and you have the money for an initial deposit.
Couple looking into instant approval credit cards

(Photo by StratfordProductions on stock.adobe.com)

What to Look for in an Instant Approval Credit Card

As you shop for a credit card, look for the following features to help build your credit:

  • High Credit Limit—Your credit score looks at the amount of available credit you’re using. If you have more available credit, and you’re using a smaller percentage of it, your credit score will improve.
  • Credit Reporting—Any credit card should report to one of the three major credit bureaus: Equifax, TransUnion, and Experian. These bureaus update your credit score based on payments, history, account age, and other factors.
  • Low Fees and Interest Rates—You should always pay your bills on time to avoid late fees and interest, but it’s best to find a credit card with low annual fees, application fees, and annual percentage rates (APR), which is the yearly stated interest rate.

Credit Card Best Practices and What to Avoid

According to the Better Business Bureau, there are a few things to watch out for when shopping for an instant approval credit card.

  • Be wary of credit card companies that absolutely guarantee approval. Approval is never guaranteed. Even after a bankruptcy, most secured credit card issuers require two years to pass before you are eligible for their card.
  • Avoid credit cards that do not disclose all fees or the initial deposit (if it’s a secured credit card).
  • Cards that require you to call a “900” number charge a toll for each call.
  • Credit card companies should not charge you setup fees or require you take out an insurance policy.
  • Avoid credit cards from credit repair companies. Stick to traditional credit card companies.

How Can I Get Additional Help in Repairing My Credit?

There are plenty of resources that explain the process of credit repair and help you learn how to dispute errors in your credit report. Most importantly, a credit card with easy approval for bad credit should be used responsibly in order to build your credit. There are many things you can do to improve your credit score:

  • Do not use too much of your available credit. Generally, you should stay under 30% of your available credit to remain in good standing with your credit.
  • Pay off your card balance on time each month to avoid interest and increased debt. This is especially true if you want your secured account to transition to an unsecured account.
  • If you have bad credit due to a lack of credit history, you can ask for permission to be an authorized user on a relative or friend’s credit card. If this person has good credit, their credit history will become part of your credit report.
  • Depending on how many credit cards you have, it’s a good idea to pay off the smaller debts first. This is commonly known as the “Snowball Method” and can work well in eliminating large amounts of debt.
  • Dispute errors on your credit report and check for accuracy when possible.
  • Do not cancel the card immediately after it’s paid off. Canceling cards in this manner can lessen your available credit and lower your credit score. Allow your accounts to age.

If you maintain good credit habits, then an instant approval credit card will be just a stepping stone toward a credit card with more flexible options, higher credit limits, and even lower interest rates.

What Is Considered Bad Credit?

Poor credit and bad credit usually fall below a credit score of 649. The minimum FICO credit score is 300. Secured credit cards tend to be the easiest credit cards to get with bad credit. You have a greater chance of “instant approval” for a secured credit card if you have bad credit.

A Closer Look at Secured Credit Cards for Repairing Credit

Not only are secured cards good for people with little to no credit history, but they are also the strongest option for those with bad credit.

What exactly is a secured credit card? It’s a credit card that requires an initial security deposit. The security deposit works two ways: a safety net for the lender and a credit limit for the spender. Your credit limit won’t always equal your security deposit, but in many cases, it will. These credit cards often do not require credit checks and allow you to open up a credit account almost instantly.

In many ways, a secured credit card may seem like a debit card, except a secured card reports information to credit agencies that can improve your credit score. This is why secured credit cards can be so beneficial to those with bad credit. They won’t discriminate against your score, and you can gradually increase your credit limit after making consistent payments.

Here are a few more things you should know about secured credit cards:

  • They are not the same as a prepaid credit card. These cards work more like a gift card and do not have late fees and other credit card characteristics.
  • Secured cards tend to have higher fees and interest rates than unsecured credit cards. That is why you should try your best to pay your balance in full each month.
  • Your secured credit card issuer should report to one of the three main agencies. Otherwise, your efforts may not be noticed.

Can I Get Instant Approval for an Unsecured Credit Card?

You can be given a quick approval for an unsecured credit card if you have decent credit. However, these cards will perform a credit check, unlike many secured credit cards that don’t require one. It’s not necessarily as easy as it may be with a secured card, but Visas and other standard credit cards are available for people looking to repair their credit.