What Does a Pre-Approved Credit Cards Mean?
Pre-approved credit card means offer or invitation of credit card from a bank or card issuer after prescreening your eligibility and assessing your creditworthiness.
The financial institution or the lenders conduct a soft enquiry on your credit report and assess your payment history, income level, stability, etc. with their own prescreening criteria.
On meeting the prescreening criteria, the financial institution offers credit cards to the potential customers, even if they haven’t applied for them.
The invitation of a preapproved credit card is not a guarantee because the lender will request further information once you apply and will then run a hard enquiry before finally issuing the credit card. Though a pre-approved credit card signifies that you have the higher probability of getting the credit card, since you meet the basic criteria by the card issuer.
A soft enquiry on your credit report does not impact your credit score.
Card issuer mails (mail or inbox) the pre-approved credit card offer to the eligible persons, they may or may not accept the offer. If they accept the offer, the card issuer will ask for further information.
A card-issuer can offer a single card or can also recommend different cards that suit your financial profile.
Applying for different cards can trigger a hard-enquiry and negatively impact your credit score, therefore receiving pre-approved offers is advantageous and you can compare one offering with another or negotiate for better terms.
Eligibility for Getting Pre-Approved Credit Cards
Credit card companies get the contact and credit information of those individuals who meet their criteria from major bureaus (Equifax®, Experian®, and TransUnion® ). Lenders evaluate and analyze FICO Scores, Vantage scores, and detailed credit reports, which reflect financial behavior like payment, history, credit utilization, and outstanding debts.
The eligibility for getting a Pre-approved credit card totally depends on the credit history and credit card companies’ criteria for new card members.
How Credit Card Pre-Approval Works?
- Credit card issuers, creditors, or banks perform a “soft credit pull” i.e. access your credit report to assess your eligibility with their pre-screening criteria for issuing credit cards.
- The lender reviews the credit history, and if you meet the pre-screening criteria, you will receive a pre-approval offer from credit card companies or lenders.
- You can choose to apply for an offer that suits your credit profile, spending habits, and preferences for bonuses and annual fees.
- When you are pre-approved by a creditor, you’ll start receiving credit card offers by mail, or issuers may send offers to your online account, or you can find additional options online.
What to do once you get pre-approved for a credit card?
You can either accept the offer or reject a pre-approved credit card offer. Mostly, pre-approved offers are marketing gimmicks, but if there is a good offer that you assess by comparing their offerings, then you can apply for one.
Now, it’s time to carefully read the terms and conditions.
Pre-approved credit cards provide key details such as terms, rewards, and benefits, along with a validity period during which the issuer believes you are likely to be approved based on your credit information.
If you don’t apply for the credit card, nothing will change, but you may receive more pre-approved offers later.
If you apply, you’ll go through a standard credit card application process, which requires personal and financial information. Be sure to apply using the specific web address or code that indicates your pre-approval.
As you have accepted the offer, the credit card company will perform a “hard pull”, which can lower your credit score by 5 to 10 points. After that, you will receive a decision quickly.
If approved, your card will arrive in 7 to 10 business days. If the offer is declined, the issuer will explain the reasons. You can still contact customer service to discuss your pre-approval and seek reconsideration.
Pre-Approved vs. Pre-Qualified Credit Card Offers
Pre-approved credit card offers are sent to the potential customer who meets some of the initial requirements for a certain card, whereas a pre-qualified credit card offer indicates potential eligibility for a specific issuer’s card.
Both pre-qualified and pre-approved are considered as an “OFFER” and do not guarantee approval.
While pre-approval is usually reliable, a card issuer may still find issues on your credit report. The only way to know if you’ll qualify for a credit card, loan, or mortgage is to complete an application. However, pre-qualification and preapproval provide useful guidance without affecting your credit score.
| Criteria | Pre-Qualificiation | Pre-Approved |
|---|---|---|
| Information Needed | Basic details like income, estimated credit score, and debt. | More detailed financial documents (credit report, income verification). |
| Approval | Not guaranteed approval | There is a higher chance of approval, but it is not guaranteed. |
| Final Step | Submit a formal application for final approval. | Complete the application for final credit review. |
Do Pre-Approval and Pre-Qualification Offers Impact Credit Score?
Pre-qualification and pre-approval offers for credit cards do not impact your credit scores since they involve soft inquiries. While auto loans and mortgages typically result in hard inquiries, which can slightly lower your score temporarily.
What are the Benefits of a Pre-Approved Credit Card?
Pre-approved credit cards offer exclusive perks like sign-up bonuses, lower interest rates, and enhanced rewards. With a quick application and no credit score impact, they provide cashback, travel points, and special discounts effortlessly.
| Sign-up Bonuses | Pre-approved offers exclusive sign-up bonuses, such as cashback, travel points, or statement credits, when you meet a spending requirement within the initial months. |
| Streamlined Application | Since the issuer has pre-screened your credit profile, the application process is quicker and smoother, reducing the chances of rejection. |
| Lower Interest Rates | Some pre-approved offers have lower interest rates than standard credit cards, making them an excellent choice for those who might carry a balance. |
| Special Rewards | Pre-approved credit cards often come with better rewards programs, offering additional cashback, travel miles, or discounts on specific categories such as dining, groceries, and gas. |
| Doesn’t Affect your Credit Score | Pre-approvals include a soft credit inquiry and do not affect your credit score. You can explore various offers without worrying about your credit history being impacted. |
Should I Accept a Pre-Approved Credit Card?
Deciding whether to accept a pre-approved credit card offer depends on your financial situation and the terms of the card. Although pre-approval increases your chances of being approved, it does not guarantee final approval. The issuer may still perform a hard credit inquiry, which could temporarily lower your credit score.
Before accepting the offer, take the time to review the interest rates, fees, credit limits, and rewards associated with the card to ensure they align with your financial goals. If the card has favorable terms, helps you build credit, or offers valuable benefits like cashback or travel rewards, it may be a good option to consider.
On the other hand, if the card comes with high fees, a high annual percentage rate (APR), or poses a risk of accumulating unnecessary debt, it might be better to decline and look for other options. Always compare the offer with other available credit cards to make the best financial decision.
Are there Any Downsides to a Pre-Approved Ccredit Card?
Yes, there are potential downsides to a pre-approved credit card:
- Not a Guarantee – Being pre-approved does not guarantee that you will be finally approved; the issuer can still deny your application after a thorough credit check.
- Risk of Overspending – A higher credit limit can encourage you to spend more, which may result in increased debt.
- Hard Credit Inquiry – Some issuers conduct a hard inquiry when you apply, which may temporarily lower your credit score.
- Hidden Fees – Many applicants do not realize that there are some hidden fees associated with the card, such as annual fees and balance transfer fees, which make it an expensive affair.
- High Interest Rates – Some pre-approved offers may have high APRs if you have a fair or average credit score.
- Limited Rewards – The card may not offer attractive rewards or benefits when compared to others within your reach.
How Do I Opt Out of Pre-Approved Credit Card Offers?
Visit OptOutPreScreen, which the three NCA’s CRA owns. Here, you will be able to complete a form requesting to be excluded from these offers for five years, or you can download a form that will allow you to permanently opt out of receiving them. There are also toll-free numbers, 888-5-OPT-OUT, that will allow you to control the type of offers that you will be receiving or to opt out of pre-approval offers completely.
Banks or Credit Card Companies Offering Pre-Approved Credit Cards
| Card Name | Best For | Issuer Offers Pre-approval? | Min. Credit Required |
|---|---|---|---|
| Capital One Savor Student Cash Rewards Credit Card | Students | Yes | Fair credit (mid-to-low 600s range) |
| Discover it® Secured Credit Card | Bad Credit | Yes | No minimum credit required |
| Petal® 2 Visa® Credit Card | Newcomers | Yes | No minimum credit required |
| Capital One Venture Rewards Credit Card | Good/Excellent Credit | Yes | Good or very good credit |
| Capital One QuicksilverOne Cash Rewards Credit Card | Fair Credit | Yes | Fair or limited credit |
| Wells Fargo Reflect® Card | 0% Intro APR | Yes | Good to excellent credit |
| Capital One Savor Cash Rewards Credit Card | Cash Rewards | Yes | Good to excellent credit |
Frequently Asked Questions
Does pre-approval or pre-qualification impact your credit score?
If you accept the pre-approval or pre-qualification offer, only then will your credit score be impacted. Accepting the offer triggers a hard inquiry, which can affect your credit score.
Can you be denied a pre-approved credit card?
Yes, it is possible to be denied a pre-approved credit card. If your financial situation has changed between the time the bank issued the approval. When they perform a hard inquiry, the credit card company may decide not to approve your application.
How to get pre-approved for more credit cards?
To increase your chances of being pre-approved for more credit cards, focus on two key strategies: improving your credit score and reducing your existing debt.