Pre-approved credit card offers are a popular method of marketing usually disseminated in the mail or over the Internet. These mailings are made possible by the major credit bureaus—Equifax, Experian, Innovis, and Trans Union—whose all-encompassing databases of consumer information allow credit card companies to locate and entice new customers with desirable credit scores.
These credit bureaus take the minimum standards of any given credit card issuer and formulate a list of the consumers in their databases who appear to meet those requirements. The credit card issuer is then able to tailor a credit card offer for that group of consumers.
This offer, otherwise known as a “pre-screened” or “firm” offer, is a commitment to a certain amount of credit that will be granted pending proof that the consumer is, in fact, the good match that the credit bureau indicates he or she should be.
When pre-approved credit card offers might be worth your consideration
Being pre-approved for a credit card does not necessarily mean a consumer will be eligible once a full application is submitted. Pre-approval refers to the initial credit check by the credit bureau that put the consumer into the pool of people who seemed—but were not necessarily—good candidates for that particular offer. Final approval is subject to another credit check and a thorough evaluation of criteria that may have changed since the pre-approval offer was sent.
While these offers may seem like junk mail to some, the old adage “one man’s trash is another man’s treasure” certainly holds true here. There are times and situations when a pre-approved credit card offer may prove very valuable. Offers of no interest (for a specified amount of time) or free balance transfers to a card with terms more suited to the consumer’s lifestyle are examples of incentives that may be worth looking into.
For someone who is paying high interest rates on credit card debt, it could make good financial sense to transfer the debt to a card with a no interest promo. The consumer can then work to pay off the debt in full before the period of no interest expires.
Similarly, with credit card terms often changing from bill to bill—and usually not in the consumer’s favor—it is beneficial for individuals to shop around regularly for the card that best suits their needs. Online comparison tools make this process fast and simple. Pre-approved credit card offers can be a good way to find out what kind of promotions are circulating at any given time.
Always read the fine print on pre-approved credit card offers
“Buyer beware” is consumer mantra that has been around since the ancients walked around in togas shouting “caveat emptor” (literally, “let the buyer beware”) in the Roman forum. When it comes to credit card offers, this refers to the fact that it is absolutely imperative to read the fine print carefully.
Consumers need to recognize why they are being targeted for particular offers. Those with good credit could face a barrage of offers with attractive rates and perks. Those with poor credit are likely to find a whole different set of offers (bad credit credit card offers).
Credit card issuers might use flattering language like “less than perfect credit” in order to define the consumer’s status in an appealing way. But the details that matter are in the fine print: interest rate, grace period, finance charges, additional fees, and many other factors. The lower the consumer’s credit score, the more likely he is to receive offers with exorbitant interest rates and a long list of fees.
Improving a low credit score in a responsible and profitable way is possible, but it takes a careful evaluation of many pre-approved credit card offers to determine which one is in the consumer’s best interest instead of the credit card issuer’s.
How to opt out of receiving pre-approved credit card offers
A family in Highland Park, Illinois, decided to save all the credit card applications mailed to them over the course of one year in order to form a more complete picture of just how many solicitations were coming into their home. At the end of the twelve-month period, 445 credit card applications, many of which were the “pre-approved” variety, had enjoyed a stay of execution in two filing boxes before being sent to the shredder at the end of the experiment. The years’ worth of applications weighed 23 pounds.
What the members of this family probably didn’t realize, at least initially, is that there are programs in place that give consumers the option to exclude their names from the credit bureaus’ lists for unsolicited credit card offers. This is commonly referred to as “opting out.” The major credit bureaus created a single toll free phone line, 1-888-5-OPTOUT (1-888-567-8688), through which a consumer can block his or her name for five years.
Users can also access the Opt Out web site to sign up. To be permanently blocked from receiving credit offers, it is necessary to request a Notice of Election to Opt Out form that must be filled out and returned. This form can be accessed on their web site or by calling the toll-free number.
How to find the best pre-approved credit card offers without sifting through junk mail
It is likely that the Internet will soon make the issue of paper-wasting junk mail obsolete. Already, a quicker and more personalized method of finding the best credit card offer is at your fingertips. By using an online quote tool to get pre-approved credit card offers from several issuers, you will be able to see all the terms laid out against each other, allowing you to make the most informed decision possible. Compare credit card offers today!
