What Are Pre-Approved Credit Cards?

You might have received several emails from different credit card companies/banks mentioning that you are pre-approved for a credit card. They send these emails to ensure that they gain more and more customers. But, the point here is: what does a pre-approved credit card mean? Do these emails guarantee that you will surely get the mentioned credit card? These questions would have come to your mind while looking at pre-approved credit card offers, but you probably don’t always get the correct answer.

We are here to help you understand what pre-approved credit cards are. and whether you should go with them or not.

What are Pre-Approved Credit Cards?

Pre-approved credit card offers are based on a pre-screening process in which a card issuer checks for your basic eligibility and filters out the credit card offers you may be approved for. Never misunderstand a pre-approved credit card offer as it doesn’t mean you will surely get it once you apply. It just means that you will probably be approved for that particular credit card but might also face rejection because the offer can be just a marketing trick sometimes. When a card issuer checks for your credit history to give you a pre-approved credit card offer, it is not counted as a hard inquiry, but when you apply for that card, and the issuer checks your credit report for approval/disapproval, it can be considered a hard inquiry and affect your credit score.

When Should You Go With a Pre-Approved Credit Card?

Pre-approved credit card offers are a trap for customers most of the time, but it doesn’t mean you should never say ‘Yes’ to them. However, thinking ten times before applying for a pre-approved credit card is essential. Following are the conditions in which it would be the right decision for you to go for a pre-approved credit card:

• If you are not satisfied with your current credit card & its benefits and you get a pre-approved credit card offer that seems to be way better than your current card, you can choose to apply for it. Before applying, just thoroughly check all its advantages, fees & charges, and eligibility criteria.
• If you have an excellent CIBIL Score (above 750 or 800) and get a fantastic pre-approved credit card offer, you should not let it go. You can apply for it as with a good credit score, there is a high chance that you will get approved for it.

Pros & Cons of Applying For a Pre-Approved Credit Card:

Pros	Cons
Pre-approved credit cards usually come with better sign-up bonuses & benefits than the ones shown publicly. You may determine the chances of your approval for a credit card without hurting your credit score. If you get approved, you will have a higher credit limit to spend, and hence your credit utilization ratio will decrease, which is good for your credit score.	Pre-approved credit card offers entice people to take more and more cards. Rejection after applying for these cards can affect your credit score, as the number of hard inquiries will increase.

Bottom Line

Pre-approved credit cards have their pros and cons, much like two sides of a coin. While these offers can be a boon for individuals with a good credit score, they may come across as bothersome to those uninterested in obtaining a credit card. It’s advisable to consider the offer carefully before applying. Failing to research and blindly applying for a pre-approved credit card can have a detrimental impact on your credit score. Whether you choose to pursue the pre-approved card or opt to disregard it, make your decision wisely. A misstep could lead to a drop in your credit score, while a well-considered choice can contribute to your financial stability.

If you still have doubts about pre-approved credit cards, please ask us in the comment section below!