You might have received a number of emails from different credit card companies/banks mentioning that you are pre-approved for a credit card. They send these emails in order 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 get the mentioned credit card for sure? These questions would have surely come to your mind while looking at pre-approved credit card offers, but you most probably don’t get the right answer most of the time. We are here to make you understand what pre-approved credit cards actually are? and whether you should go with them or not.

Pre Approved Credit Cards

What are Pre-Approved Credit Cards?

Pre-approved credit card offers are based on a prescreening process in which a card issuer just checks for your basic eligibility and filters out the credit card offers that you may be approved for. Never misunderstand a pre-approved credit card offer as it doesn’t mean that you are surely going to get it once you apply. It just means that you will most probably be approved for that particular credit card but you 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?

The pre-approved credit card offers are a trap for the customers most of the time, but it doesn’t mean that you should never say ‘Yes’ to them. However, it is very important to think ten times before you apply for a pre-approved credit card. 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. Just make sure to check all its advantages, Fees & charges, and eligibility criteria thoroughly before going for it.
  • If you have a very good Credit score (above 750 or 800) and you get an amazing pre-approved credit card offer, you should not let it go. You can apply for it as with a good credit score, there are high chances 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.
  • The pre-approved credit card offers sometimes make people much more credit cards than they can handle.
  • Getting rejected after applying for these cards can affect your credit score as the no. of hard inquiries will increase.

 Bottom Line

Like two sides of a coin, a pre-approved credit card also has its own advantages and disadvantages. These offers may be a blessing for people with a good credit score and on the other hand, these can just be some irritating emails for others who don’t want a credit card. However, it is always good to go for it if it looks to be a very good option to you, but applying for a pre-approved credit card without doing any research about it can be a bad idea and can hurt your credit score badly. So, no matter whether you are applying for a pre-approved card or you are just ignoring it, make sure to make your decisions wisely as a wrong decision can lead to a drop in your credit score and a right decision can help you a lot in achieving financial stability.

If you still have any doubts regarding pre-approved credit cards, feel free to ask us in the comment section below!

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