What is Credit Card Pre-Approval?
Anyone that has checked their mail more than 10 times in their life has probably seen the phrase “you’ve been approved” on a credit card offer before. While this may seem like a straightforward statement, in reality there is much more than meets the eye.
Aside from the flashy bold letters that announce the pre-approval of anyone receiving these advertisements, there are also the highly appealing introductory interest rates, rewards and other special offers. Some people are quickly excited about the prospect of being pre-approved for such a generous credit card, even though they’ve been declined for several credit card applications in the past. How does pre-approval work, and what is credit card pre-approval?
How Pre-Approval Advertisements Are Issued
It is important to understand that pre-approval credit card offers are simply promotions that are designed to generate interest in prospective cardholders. Credit card companies receive the address and name of their target audience from other credit card companies and corporations that have recently acquired this information through various methods. Most of the time, people begin receiving these advertisements a few weeks after they’ve applied for another credit card.
Fortunately, companies cannot give this information away without consent, so it is wise to examine all forms that require personal information to be sure that there are no check boxes that ask permission to send other advertisements or share information. Most pre-approval credit card offers are issued based on information contained within other forms such as credit card applications.
The Purpose of Pre-Approval
Pre-approval is primarily an advertising tactic utilized by credit card companies that obtain information through third-party sources in order to provide a customized and ideal offer to target audiences. Pre-approval is not a stamp that can be earned through good credit. In fact, most people that are offered pre-approval credit cards have below average credit, and are not eligible for other cards. Credit card companies target individuals with declining credit because there is a higher chance that they will be interested in a card that they are already approved for. In some cases however, pre-approval offers are sent to prospective cardholders with good credit. Every credit card offer is issued based on the individuals credit score and history. People with bad credit may receive advertisements for secured credit cards, while people with good credit receive offers that highlight higher credit limits and lower interest rates.
The Value of Pre-Approval Credit Cards
Judging the value of pre-approval credit cards is difficult, because each offer is issued based on the credit of the individual receiving the advertisement. In fact, pre-approval credit cards are simply conventional credit cards that utilize a unique advertising method. Therefore, the value that each card has to offer should be determined separately. Be sure to examine the fine print of every application before submission, and call a representative to ask any necessary questions pertaining to the card’s ;imitations and capabilities.