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.
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.
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.
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:
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