Pre-Approved Credit Cards
Usually, your first introduction to a credit card offer is from an advertisement that includes your name or some call to action like “apply now” or “hurry up”. Credit card companies use these marketing tactics to personalize the offer or create a sense of urgency. Do you want to know if there is any advantage or benefit to them doing this? Come on, let’s find out.
How Pre-Approved Credit Cards Work:
The workings behind pre-approved credit cards is simple. Credit card companies contact the credit reporting bureaus to get a list of borrowers which meet their specific criteria. This list may include borrowers who have credit scores that fall within certain parameters. Once the credit card companies find out the top list of potential customers, they then mail credit card offers to these potential customers asking them to apply for a specific card.
These credit card offers will generally inform the customers that they are pre-approved for some specific card offer. This lets customers know that they’re eligible for a particular offer and that they’re allowed to apply for it.
Advantages of Pre-Approved Credit Cards:
Since there are many advantages to pre-approved Credit cards, let’s break down some of the benefits below.
Allows You to Get Great Offers:
One benefit of pre-approved credit cards is that the credit card company will usually provide you their best offer. This is also a marketing tactic that the companies will use to get the customers on-board. The targeted offers that are provided via mail are usually some of the best deals offered to you by the company. So, if you’re really looking for a new card, then selecting a pre-approved card offer may not be the worst idea as you’ll likely get the best deal available. However, always research other card options and providers to make sure you are getting the best card for your situation.
Get Good Deals Without a Hard Credit Inquiry:
If you are going to apply for a new credit card, the credit card company will generally perform a hard credit inquiry to determine your credit score and verify whether you’re qualified. If this is only done occasionally, it shouldn’t be an issue; however, if this is done frequently, it can negatively affect your credit score. Also, a hard credit inquiry will be in your credit report for two years. But, you won’t encounter this problem with pre-approved credit cards because the issuer of the credit card has already performed a soft credit inquiry and determined that you’re worthy of the offer. The great thing about a soft credit inquiry is that it won’t affect your credit score.
Therefore, because of these advantages, pre-approved credit cards can be a good way to browse different cards without worrying about any impact to your credit score. Moreover, they also provide you a great opportunity to discover some of the various offers provided by different issuers. By assessing the various benefits and offers available, you can select the one that best suits your financial needs as well as your lifestyle.