Credit card companies base their acceptance or rejection of applications on the checks they run on consumers. People with previous financial problems may find that they are not accepted for many standard cards as they pose too much of a risk. In some cases it may be easier to consider applying for no credit check credit cards instead. How do these products work?
What are No Credit Check Credit Cards?
These cards aren’t any different from other cards in the way they work and are used. They do, however, remove the credit check from the application process. Also often known as guaranteed acceptance cards, they are not issued dependent on the credit history of the applicant. Typical cards offered here include:
- Regular credit cards
- Prepaid credit cards
- Secured credit cards
The type of card offered on a no credit check basis varies. Some card companies will only give out secured or prepaid cards without looking at the financial track record of the applicant; others will give out regular credit cards.
Why do People Need Credit Cards Without a Credit Check?
Some people simply wish to bypass the credit scoring process. In most cases this will be based on the fact that they have no credit, poor credit or bad credit. They may have been rejected when they have made standard card applications in the past and may not wish to have any more refused applications listed on their track record.
What to Consider Before Applying for No Credit Check Credit Cards
Consumers should make sure that they are applying for the type of card that they actually want. There is no point making an application for a secured or prepaid product when what they actually need is an unsecured product. Some card companies will advertise no credit check credit card products but, in reality, they only offer secured/prepaid options so this may be worth checking first.
Those that do find a no credit check unsecured credit card will have to be prepared to pay higher interest rates than those given to standard cards. The risk to the card company is much increased and interest rates and credit limits may suffer in the process. Shopping around to compare costs is essential here.
Those that want a lower cost solution may be better off with secured credit cards or prepaid products if they can afford the up-front payment that is necessary there. Specialist bad credit cards may also be worth considering. These will come with a credit check but those worried about this could talk to the card issuer before formally applying to assess their chances of success.
Carol Finch - Carol Finch is the Topic Editor for Retirement Planning, Budgeting, E-Commerce & Technical/Business Writing on Suite101.
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