If a provider promises guaranteed approval, you’re right to wonder: What’s the catch?
As it turns out, there’s no such thing as guaranteed approval. If you see a card advertised as guaranteed, it doesn’t mean that it’s open to everyone. But you’ll typically find a few requirements are necessary to get it.
What guaranteed approval means
Every card provider has basic requirements to accept a new customer. When it comes to credit cards, guaranteed approval means you’ll be approved as long as you meet certain conditions.
The good news: These conditions are typically minimal. For example, you may only be required to submit your name and contact info, have a checking account and prove a specified level of income.
If a card provider claims to offer guaranteed approval, an asterisk isn’t far behind. Follow that asterisk to the fine print to see the requirements you’ll need to meet for approval.
Guaranteed approval vs. easy approval
Most card providers don’t explicitly offer guaranteed approval. Instead, they use language that implies it’s easy for you to be approved. You’ll typically see phrases like “no minimum credit score” or “see if you prequalify”. You may still be denied for the card, but you generally have better odds than with most other providers.
Unsecured cards with guaranteed or easy approval
With an unsecured card, you don’t have to put down a security deposit — which is an upfront fee to open a card. Most unsecured cards with guaranteed approval are online-catalog cards: You can only use them to buy merchandise at specified online outlets only.
If a card offers guaranteed or easy approval, carefully read its terms to make sure you understand what you’re getting yourself into. This type of card often comes with high fees and high interest rates. In short: You may be better off with a secured card.
Unsecured cards with guaranteed approval
In Canada, cards that are considered guaranteed approval may have very simple requirements and eligibility including:
- You must be a Canadian resident and at least 18 years old.
- You must agree to the card provider’s terms and conditions.
- You must have a valid payment method, such as a debit card, credit card or checking account.
- You must prove that you can make a specified monthly payment if you use your card’s entire credit line.
- You must pay the enrollment fees.
Unsecured cards with easy approval
Some card providers don’t promise approval but say their products are geared toward consumers with less-than-great credit.
Secured cards with guaranteed or easy approvals
It can be easier for you to get a secured card than an unsecured card. That’s because you secure the card with a deposit before you open the card. This collateral ensures that your provider will be repaid if you fail to pay your card bill.
What is collateral?
Collateral is something of value you offer to your lender when taking out a loan. If you fail to repay your loan, your lender can seize your collateral.
For a credit card, you may be required to put down money — called a security deposit — as collateral. If you don’t repay the money you’ve spent on your card, your card provider will take your deposit.
It is still possible to be denied for a secured card — for example, when your credit score is too low. However, some secured card providers make approval very easy. Consider the following credit cards if you have severely damaged credit.
Secured cards with guaranteed approval
Like unsecured-card providers, most secured card providers don’t offer guaranteed approval.Back to top