Pre-Approved Offers on Credit Cards
A credit card is one of the most popular financial products in the modern world. It is a card that is coveted by many yet difficult to be eligible for in the past. However, today, it has become easier to get a credit card with banks vying with each other to get more customers. This is done through a variety of ways, from easier eligibility criteria to attractive offers. The pre-approved credit card is one such offer that is put forward by almost every credit card issuer today. It is quite common-place to receive such an offer through your email or even a letter by post.
What is a pre-approved credit card?
A pre-approved credit card offer could be provided to you by an issuer from where you don't currently have a card or it could be offered by your existing card issuer as an upgrade to a card with a higher credit limit or special rewards. However, while it is a card that you have not applied for, it doesn't mean that the card is guaranteed.
Criteria for Pre-Approved Credit Card
The credit card issuer or bank makes a pre-approved credit card offer based on various data points which range from your income to your credit history. This information can be sourced from credit rating agencies or credit bureaus which have a record of your existing loans, loan applications, loan repayment history, existing credit cards, credit card applications, credit card repayment history, etc. Based on this, a list of eligible individuals is drawn and pre-approved credit card offers are sent.
However, after you accept the pre-approved credit card offer, there will be a second round of assessment conducted by the card issuer or bank to evaluate the person's eligibility criteria in a more detailed manner. This can lead to the application being accepted or even rejected.
Points to Note when Considering a Pre-Approved Credit Card
While it can be exciting and even useful to have a new credit card, whether you have an existing card or not, it can be helpful to keep a few points in mind before you accept a pre-approved credit card offer. Keep the following in mind:
- Understand the terms and conditions of the pre-approved card.
- Make sure the interest rates are affordable in comparison to others.
- Make sure you have a good window of time pay back your credit card dues in full before interest starts getting accumulated.
- Evaluate if the card is beneficial for your particular lifestyle. If you do a lot of home cooking, for example, a card that offers reward points for grocery spends would be beneficial. For those who like eating out often or watching movies, a card that offers reward points for dining out and entertainment would help you save money while also indulging in your interests. Those who are frequent flyers, whether for work or leisure, would find a card that offers frequent flyer miles a great value addition to their lifestyle.
- Compare the annual fee and renewal fee with other cards.
- Make sure that the reward points, bonus points, welcome points are generous.
- Find out if there are special promotions such as balance transfer features and 0% financing.
FAQs on Pre-Approved Offers by Credit Card Companies
- Will my credit score be affected if I avail myself of a pre-approved credit card?
Your credit score will not be affected if you avail yourself of a pre-approved credit card. A pre-approved card is offered to you also partly due to the fact that your credit score might be high which may compel the lender to offer you a card.
- How long do pre-approvals last?
The pre-approvals can last anything between 60-90 days.
- What is considered to be a good credit score?
A score of 750 or above is considered to be a good credit score. A good credit score can help you get not only your application for credit card approved but also for applications for loans as well.
- I want to cancel my pre-approved credit card. Will my credit score be affected?
No, your credit score will not be affected if you get your pre-approved credit card cancelled. As the rule of the thumb that is with any credit card, you must ensure to pay your credit card bills on time so that your credit score doesn't drop.
- Can I avail myself of multiple pre-approved credit cards?
Yes, you can avail yourself of multiple pre-approved credit cards. However, you must check whether the card that you are looking to avail of meets your needs or not. Various cards are designed to serve different requirements of their customers, and you must do proper research before availing any credit card for yourself.
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