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Even if you consider your financial standing as average, you still have probably received mail from credit card companies on a regular basis. Even now, you might be receiving notice about your most recent credit card statement. Or, the card company might have sent you a letter that says you qualify for a pre-approved card.
According to a report by The Nilson Report, Citi Bank was the leading credit card issuer in 2020, with 95 million credit cards. It was closely followed by Chase bank, with just a margin of 12.6% at 83 million credit cards. The two were the only banks that issued over 80 million credit cards in the period. USAA and U.S. Bank trailed in the list with 10 and 14 million credit cards, respectively.
Key Takeaways
- When you receive the pre-approved credit card offer, this means that the bank thinks that you meet the basic criteria to get a card. However, there is still a chance that the bank might eventually reject your credit card application, although they sent you this offer.
- If you are not interested in receiving pre-approved credit card offers, there is an option to opt out of those offers for five years or even permanently.
- One thing to remember about pre-approved credit card offers is the fact that they do not affect your credit score.
- There is a possibility that the credit card company might approve your credit card application with different terms. This means that the issuer might give you a different credit limit or different interest rate. There is also room for negotiation in the process.
What Is a Pre-Approved Credit Card Offer?
When the bank sends you a pre-approved credit card offer, you meet the essential criteria to qualify for a card. It's not the same as approval for that credit card. It simply means that you may want to consider applying for it (in case this is a card that would fit your needs).
A quick way to get pre-approval for a credit card is by applying for an offer you received in the mail. Sometimes, the card company calls these “prescreened” offers – despite being different. Your name could appear in the bank's mailing list for prescreened offers because the card company got a list of potential cardholders who met the bank's initial credit criteria from the credit bureaus.
Another way is by applying for a pre-approved credit card offer on the Internet. Most credit card companies have an online approval tool where you have to fill out a short, simple online form by providing your basic personal and financial information. If you meet the credit card company's criteria, they may send you a credit card offer for a card that they feel best fits your financial profile.
How Pre-Approved Credit Card Offers Work
We can almost predict that for your next credit card, you will want features that will benefit you greatly: low-interest rates, exciting rewards, freebies, and 0% intro APR balance transfer offers. Getting pre-approval would also be fantastic if you could find all those things in one card.
When the card company pre-approves you for credit card offers, it means they have done a soft credit check on you, and you’re a good candidate according to their criteria.
Don’t worry – this soft credit check does not affect your credit. If you continue to meet the card issuer’s credit standards and if your income justifies maintaining a credit card, you’ll have a higher chance for approval on your new card.
How To Apply For Pre Approval?
Sometimes, the credit card companies will send their pre-approved credit card in the mail to select individuals inviting them to apply for a specific card offer. In other cases, customers need to complete an online form that provides the credit card company with some basic personal and financial information. After that, the card issuer pre-approves them for a credit card.
Just remember that the bank may reject your application even though they have previously pre-approved you for a card.
A card issuer must evaluate you for your creditworthiness before they can approve you for a card. This entails checking if your credit history, income level, credit score, and other relevant information demonstrate that you can handle another credit card.
How To Opt In For Credit Card Offers?
Provided you meet the lender’s criteria, there is every chance that you would receive a pre-approved credit card offer in your mail. Usually, credit card companies buy mailing lists of customers that meet their criteria from the credit bureaus. They use this data to send you a pre-approved credit card offer.
If you prefer not to receive pre-approved credit card offers, you can opt-out for five years at a time or permanently by calling 888-5-OPT-OUT (888-567-8688) or visiting the website optoutprescreen.com. All you need to do is make your request online, fill, sign, and return a permanent opt-out election form.
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Why Do I Get Pre Approved Credit Card Offers?
If you are getting pre-approved credit card offers, it entails that credit card companies have decided you are a good prospect for one of their products.
This is usually after a soft credit check has been conducted on your credit history. A soft credit check shows the credit card company your creditworthiness which helps them determine the likelihood of being paid back if they extend credit to you.
This however does not imply that you would be automatically approved for a credit card when you apply, though you have a higher probability of getting one. This type of credit check has no impact on your credit score.
Why Would They Reject A Pre-Approved Application?
Banks and card issuers have the discretion to turn down a pre-approved credit card offer if the customer no longer qualifies according to the original criteria. An applicant must meet the requirements at both points of time and not just during the time the offer came.
- Time runs while the entire process is taking place – from the credit bureau to the mail print shop, through the US Postal Service, into the mailbox and eventually to the kitchen countertop or office desk.
- Consumer reports are dynamic such that as relevant information comes in (payment record, credit checking, etc.), the bureaus update their records and effectively reshape the customer’s credit report.
There are interim events that may cause the companies to decline your application. Actions such as suddenly becoming delinquent, running up large balances on other accounts, or having a red flag for suspected fraudulent activity in your account can seriously turn the “thumbs up” to a “thumbs down.”
How Does This Affect My Credit Score?
The good thing about it is that pre-approval does nothing to your credit score at all. This is because the credit card company has not done a hard pull on your report, so the credit bureaus have nothing to count.
However, if you respond to a prescreened credit card offer, expect the card issuer to register a hard inquiry during the application stage. They will do this even though they must make a firm offer of credit under the Fair Credit Reporting Act (FCRA). A hard inquiry will bring your score down a little at the bureau that will provide the back-end pull.
The bank will do a hard inquiry to check if you still meet their original criteria. They will probably pull a copy of your consumer report to verify that there is no significant and financially relevant change that took place.
This inquiry that comes because of your credit card application could hurt your credit score if there are other similar information or transactions in your credit report.
How To Get Pre-Approved Credit Card Offers?
Don’t think that because you’re not receiving pre-approved credit card offers in the mail, you don’t qualify for one. Instead, try to do these things:
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Active Search
Some credit card companies make it easy for consumers to know if the company has pre-approved them for a credit card. Some issuers’ websites will ask you to key in your basic information, such as your name and the last four digits of your social security number. Then, it will show you which credit cards, if any, you may qualify for.
Again, these pre-approval checks typically involve a soft pull on your credit report, which does not affect your credit score. It’s a different story when you ultimately decide to apply for a credit card because the card issuer will eventually do a hard pull on your report.
Taking the initiative to check first to see if you’re qualified for a pre-approved credit card can save you a lot of time. This way, you can skip the cards you don’t qualify for and where you will most likely get a rejection. You’ll do your credit score a favor in the process because new credit inquiries can pull it down and make it harder to get approval on your future applications.
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Receive An Offer (By Mail)
Making your profile attractive to lenders is the best way to get pre-approved credit card offers in the mail. Banks look for three types of behaviors that indicate a profitable new customer – hopefully you.
Work out your profile to make it attractive to lenders. This is the best way to get the banks to send your pre-approved credit card offers in your mailbox. Card issuers look for three types of consumer behaviors that tell them you are a profitable new customer.
- Customers who pay their bills on time would probably be less problematic in the future. Remember that lenders can only make firm offers of credit to individuals whom they deem to be responsible borrowers and customers.
- Individuals who are most likely to respond and complete an application form become better sales leads. It costs money to build a mailing list, print the letters and mail them. Credit card companies opt for customers who do not cost too much to acquire.
- Credit card customers they classify as “revolvers”. If you don’t always pay the full amount on your credit card bill but are never late, you are actually the more attractive customer than he who pays everything in full each month. You bring in more income to the company, therefore, you are more desirable to them.
The more solicitations you receive in your mailbox means it is now easier for you to open an account without your credit score taking too many hits. You don’t have to send out a lot of credit card applications just to get one approval.
How Does Issuers Pre Approval Tools Work?
Credit card companies' pre-approval tools work by using algorithms to determine if a person is likely to be approved for a credit card based on the information they provide.
Most issuers provide it and every one has its own criteria and requirements:
- American Express: American Express launched a test pre-approval program just last year that enables users to find out if they are approved for a certain card without worrying about the query damaging their credit score.
- Bank Of America: You must select the “Credit Cards” link at the top of the page when you go to the Bank of America website. When you land on the credit card page, a pre-approval box ought to be shown on the right side of the display. You will be given the option to check out customized offers.
- Capital One: Checking your credit score, compiling the required evidence, submitting a pre-approval application, waiting for a response, and studying the offer and terms are all steps in the pre-approval process for a Capital One credit card.
- Citi: Citi offers a number of credit cards for which you can get pre-approved, as well as a prequalification tool on its official website.
- Chase: Checking the cards you qualify for on the Chase website can get you pre-approved for a Chase credit card. You just need to input your name, address, and the last four digits of your social security number in order to do this. The website will next check to see whether there are any cards for which you are pre-approved before you click “Find My Offers.”
Getting Pre Approved For Different Terms Is Common
Don’t find it strange if the credit card they finally approve for you will have different terms and conditions than what they originally offered.
The card’s APR is the interest rate you will pay if you carry an outstanding balance from billing cycle to billing cycle. The higher the APR, the more expensive will be the card for you if you carry a balance.
Although credit cards will entice you with an attractive APR offer, the final rate they will give you will still depend on your credit history and credit score.
Once the bank approves your application, go through the terms and conditions and be sure to understand your APR and other charges that may come related to the account. If you pay off your balance every month and not carry anything over to the next cycle, you will not pay interest on the credit card. However, the card company will still compel you to pay other costs and charges such as an annual fee or cash advance fee.
How Do I Stop Getting Pre Approved Credit Card Offers?
If you ultimately decide that you don’t want to receive pre-approved offers (or what they call pre-screened offers through email), the FCRA gives you the choice to “opt-out” – meaning you prefer not to receive these types of offers anymore. Opting out will not disqualify you from applying for credit or insurance later. You can do this online, by phone, or by mail.
- Visit www.optoutprescreen.com. The three nationwide credit bureaus have put up this website as a joint venture to empower consumers to control pre-screened offers. You can submit an online request through this website to opt-out from receiving offers for five years. There’s also an option to download and print a form that you can mail to opt-out permanently. If you have previously opted out from receiving pre-screened offers and now have changed your mind about it, you can also opt back in. This is the only legitimate website by the nationwide credit bureaus. The website will not reach out to consumers, so if you get a call or email from anyone claiming to represent Opt Out Prescreen, that will most likely be fraudulent.
- Call their toll-free number at (888) 5- OPT-OUT.
- Mail or send a written request. You can also send your request to permanently opt out by mail.
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FAQs
Can I apply for a credit card after being rejected?
While it is possible to apply for another credit card after one has been denied, it is not always a good idea. The first application will have caused a hard pull to be recorded on your credit file, which the provider will see on your next application.
Lenders are generally hesitant to approve applications when multiple credit inquiries have been made in a short period of time. So, try to limit your applications and do your research so that you only apply for credit cards that you have a good chance of getting approved for.
Pre approved cards: does your credit go down if you get denied ?
Being denied approval for a new credit card will not harm your credit score in and of itself, but the hard inquiry from when you submitted the application may.
This means that you should not only be disappointed if you are not approved, but you should also avoid applying for more cards without waiting at least a month or two.
Is it better to get pre approved for cashback or rewards?
The answer is dependent on your way of life. For example, if you frequently fly, it may be preferable to obtain a card with miles-based rewards rather than cashback offers.
However, if you intend to charge a large purchase to your credit card, having cashback rewards may be preferable because you will be able to use them to pay off your balance.
Getting cashback rewards for places you frequent, such as gas stations and supermarkets, can also help you save money in the long run. However, you must ensure that you only use your card at merchants that accept it.
What are the easiest cards to get pre approval if you have bad credit?
Secured credit cards are the easiest to obtain if you have bad credit. The card issuer faces little risk because you are providing funds as security. If you fail to make payments on your account, they can simply use the funds you have deposited to repay the debt.
This means that your credit limit is determined by the amount of money you have deposited. As a result, if you only have $200 to put on your card, your credit limit will be $200. These cards, on the other hand, can help you build credit.
When you make a payment, it is reported to the major credit bureaus, which raises your credit score.
Is it possible to negotiate a lower interest rate on pre-approved credit cards?
By calling the issuer, you may be able to negotiate a lower interest rate on your credit cards. Negotiating with the card issuer of the account you've had for the longest time is a good idea.
If you have a track record of making on-time payments and a high credit score, you are more likely to be successful in negotiating a lower interest rate. There are no guarantees, however, because your card issuer is not required to agree to a lower rate.
