What does it mean to get a pre-approval? Should you get excited when getting an offer?
In this guide, we’ll show you important information about pre approved credit cards.
As the competition between many credit card providers is growing quickly, there are more programs to lure in new customers. This is the reasons why you can see many people with credit scores would receive a lot of pre approve offers in the mailbox each day.
In fact, you don’t need to have a good credit score to get these offers. Those who have poor scores can also receive them. Of course, the differences are in the issuers and offer quality.
What is a pre approved credit card and how does it work?
In simple words, credit card pre-approval means that the credit card provider gathered your credit information by setting a standard like the minimum score and asking for a list of customers who met those criteria from a credit bureau. By doing this, they will know if you are a potential customer and send you a pre-approved offer to your mailbox, which specifies great rewards programs and low interest rates.
However, this doesn’t mean that you are ready to get a pre approved card. These are just the blind mails to those who meet the pre-set score band of the company. If you decide to apply for that offer, those firms would carry out another scan with due diligence to measure your creditworthiness. Only when they find that your credit behaviors have been up to the standard and your credit score is satisfactory that you would be accepted for the pre approval card with the same terms and rate as in the offer. Otherwise, you could be declined.
Benefits of using pre approved credit cards
The most important benefit of getting a pre approved credit card offer in your mailbox is that you would have many options with very competitive APRs. In fact, this can be also a good way to know more about different offers from various credit card providers and weigh the pros and cons of each one. In most cases, there will be 3 main things that you can have after getting a credit card: 0% APR balance transfer, great reward program, and low interest rate.
What should you do with the next pre-approved offers?
If you get a pre-approval offer, first it is important to find out whether you actually need another credit card. If the offer would improve your current credit score by reducing the credit utilization ratio or lowering the interest costs, then you should measure to your chances of being approved for the card. On average, about 30% of the offer is approved for a new card. But if you have an excellent credit score, your chance is closer to 95%.
Recommended pre-approved credit cards
There are many pre approved offers that you can receive from Chase, particularly travel rewards options. Finding a specialized offer is especially easy when you are already a customer of this bank. All that you have to do is logging in to account and choose “Your Offers” to get information on their credit card services or products. Some distinctive features of their pre-approved programs include:
– 50000 bonus points
– $625 reward travel if you redeem via the Ultimate Rewards Program
– 2X points on dining and travel worldwide.
– $0 fees on foreign transactions
– Free annual fee in the first year and $95 for the next years
- American Express
If you are looking for a good pre-approved credit card, American Express is probably one of the best providers with many rewards programs and a low interest rate. Also, you can choose between personal, small business, and corporate options. Some other features include:
– Get 10000 rewards points after using a new card to purchase $1000 in the first three months
– 2x your points at all supermarkets in the US (up to $6000 each year in purchases, then 1x)
– Get 20% extra rewards points when you make more than 20 purchases with your credit card
– Low initial APR: 0% on balance transfers and purchases in 15 months, then a variable rate from 14.75% to 25.75%.
– Free annual fee
– Use your collected points for rewards from more than 500 popular brands in entertainment, merchandise, gift cards, and travel.
- Capital One
Another great option for getting a pre approved credit card is the offer from Capital One – one of the most trusted services in the US. Indeed, it is an excellent card for beginners with low credit scores thanks to many great features:
– Get 20000-mile bonus (worth $200) after spending $1000 on purchase within the first three months
– Get 1.25x miles on each purchase
– Get 10x miles each $1 spent in thousands of restaurants and hotels
– No membership fees
– Special financial benefits and savings in the first year