Instant-Use Credit Cards: A Complete Guide

We live in an increasingly cashless society, and most transactions are done with credit cards, debit cards or other forms of electronic payment. Historically when you applied for a new credit card, you would not be able to use the card for a few days until the physical card itself arrived in the mail. However, many banks now offer instant-use credit cards, where you can use your new card immediately after you've been approved. This can be very convenient for when you have a big purchase in mind where you want to use your new credit card.

What Is An Instant-Use Credit Card?

An instant-use credit card is a card that is available for you to use as soon as you are approved by the issuing bank. Also known as same-day credit cards or instant access credit cards, instant-use credit cards are not offered by every bank. However, they are becoming increasingly popular, as credit card issuers fight for market share in a competitive landscape. An instant-use credit card allows you to use your new card for purchases even before your physical card arrives in the mail.

Instant-Use Vs. Instant Approval Credit Card

Although instant-use credit cards and instant-approval credit cards have similar-sounding names, they refer to two different things. When you are instantly approved for a credit card, it means that you are approved automatically, without the need for a manual review. An instant-use credit card means that you have access to your credit card number in order to make purchases within minutes after being approved.

How Do Instant Access Credit Cards Work?

There are a number of ways that instant-use credit cards work, depending on the specific credit card issuer. In some cases, the card issuer may provide you with your full credit card account number as part of the application process. In that case, you can use your card instantly, including adding it to a mobile wallet.

In other cases, your lender may provide you with a virtual card number to use until your physical card. This virtual card won't be the same as your physical card, but it will still be accepted anywhere your permanent card will be, and you will be responsible and liable for the purchases. Depending on the card issuer, you should be able to use this virtual card instantly and possibly even use it for a contactless payment.

Where To Get An Instant-Use Credit Card

The way that different lenders use instant-use credit cards varies by the issuer in question. Some issuers may instantly show you your credit card number on the success screen if you are approved. Others may require you to click on a separate link or contact customer service to get your instant-use credit card number. Other issuers may not offer the ability to get an instant-use credit card number.

If being able to use your credit card immediately upon approval is important to you, make sure to research the policy for the issuer. Remember too that the ability to use your card instantly after approval is only one factor in deciding which credit card to get. It's a good idea to compare offers from different card issuers (including annual percentage rates (APR), any rewards offered on the card and credit limits) to find the most suitable card for you.

Pros And Cons Of Instant-Use Credit Cards

Here are some of the potential advantages and disadvantages of instant-use credit cards:

Instant-Use Credit Card Pros

• You don't have to wait to access your funds: The biggest perk of an instant-use credit card is that you can use it instantly. With an instant-use credit card, you have access to your full credit limit, immediately.
• May earn rewards: If you have a big time-sensitive purchase coming up, you may want to get an instant-use credit card. That way, you can earn rewards and/or meet a bonus spending threshold to earn lucrative credit card rewards.
• Can access introductory card offers: In addition to earning credit card rewards, many cards offer credit card perks like 0% intro APR on purchases for a limited time. Using an instant-use credit card can allow you to take advantage of some of these perks and card benefits.

Instant-Use Credit Card Cons

• May tempt you to overspend: Having instant and immediate use of your credit card numbers may tempt you to spend more than you intend. This can lead to a higher-than-expected credit card bill.
• There is still a risk of fraud: While virtual credit card numbers may help to reduce fraud, no transaction is completely safe. Be aware of the chances of fraud and take steps to keep your card numbers safe.
• Possible delays: You may not be able to access your card number immediately due to a variety of factors that may be out of your control. Because of that, make sure that you have a backup plan for what you'll do if you aren't able to get an instant-use credit card number.

The Bottom Line

An instant-use credit card is one that you can use immediately upon being approved. Not all issuers offer these instant-use credit cards, so make sure to research your issuer's policy before applying for a card. While there can be some advantages to having immediate use of your credit card (such as access to rewards and other credit card perks), there are some drawbacks as well. It's important to understand your credit score and financial situation when applying for a credit card.

If you are interested in applying for a new credit card, download the Rocket Money^SM app for help monitoring your finances and deciding when you are ready for a new card.