What Does Pre-Approved Really Mean

Who hasn’t received a ton of pre-approved offers in the mail from numerous credit companies and other business entities? While it may be enticing to think that people are pursuing you for your business, you really need to watch out for these offers. Pre-approval offers usually also tend to be accompanied by great interest rates, tempting balance transfer terms, or excellent reward programs but how do you really know what you’re getting?

How Did You Get Pre-Approved
You may have a lot of questions about how you possibly be pre-approved for such a great credit card, and if so, when can you start using it? Realize that pre-approved doesn’t mean it’s a done deal. Credit card companies get your information in a variety of ways. They can buy your name from another company with whom you have filled out an application for in the past or use information they may have obtained from past applications you have submitted. Depending on where the information about you originated, these pre-approved applications are often times simply just unsolicited mailings. You will likely still have to contact the company, officially apply for the card offer, and wait to find out if your credit application has been approved. Credit card companies have become very strict on examining creditworthiness and while they may have lured you in with a great deal, they will still do what they can to ensure you are not a risk.

Bad Credit Approvals?
If you are fully aware that you have not-so-great credit and received credit card offers stating you are pre-approved for a secured card, you will still have to submit to an application process and in addition, provide a deposit to start your line of credit. While the secured credit card companies do report your activity to the credit bureaus, your deposit will be needed in order for you to start using it. Knowing you have bad credit means you should be aware that no one is going to just hand you a great credit card deal. It is not as simple as that and it’s HIGHLY unlikely. The card you do qualify for will likely have higher interest rates than traditional cards. Bad credit credit cards will most likely be a regular item in your mailbox, but undoubtedly, most of them will not be the great deals they’re cracked up to be.

Great Credit
If you are gainfully employed and maintain good credit, the offers you get in the mail should be better just based on those 2 heavily weighted considerations. There may be some worthwhile offers you can compare if you are in the market for a new credit card. Don’t jump at the first offer you get in the mail either. There are plenty of good credit card deals available to consumers with great credit so look around. Pre-approvals in the mail are convenient but be sure to look online for comparable deals before committing to one card.

Remember to always base your credit card choices on your own personal budget and financial situation. Having one good credit card can be useful in emergencies or to help you earn reward incentives on all purchases you make. While pre-approvals may be flattering, they can also be VERY costly if you don’t make careful decisions.

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This entry was posted on Thursday, July 23rd, 2009 at 7:20 am and is filed under Debt & Consolidation, New Card Offers, Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.