Know Your Rights

Important Facts About Pre-Approved Credit Card Offers

Opening your mailbox to find a "pre-approved" credit card offer can feel like you've won the lottery, especially for a consumer looking to open a new account.  Even consumers with poor or no credit can receive these offers in the mail making you believe you have been approved for a card with what may initially seem like great benefits and low interest rates.  But the reality is, you have not been approved until you apply and the pre-approved offer is really not approval after all.  As the economy continues to bounce back, credit card offers are on the rise and pre-approval offers are a key part of this industry's marketing.  But understanding the industry of pre-approved credit card offers will save you aggravation, frustration and hopefully a little bit of money.  

First, pre-approved credit card offers do not affect your credit score, at least not until you actually apply for the credit.  The majority of consumers understand that when you apply for credit, insurance, a loan or a mortgage the lender will access your credit file to review your existing accounts.  This access will affect your credit score but a pre-approval will not affect your score as it is really a conditional approval or approval based on pulling your credit.

Second, despite your "pre-approval", you still may be rejected when you formally apply for the credit card.  While these credit card companies send you an approval based on where they believe you fall on the credit score spectrum, once you apply, they may still reject you based on what they actually find in your report.  Rejection happens more often than one would think.  For example, perhaps your credit changed between the time you received the pre-approval offer and the time you applied for credit.  Often times, consumers get accepted for the pre-approved cards but with much less favorable terms than was presented in the offer.  If you are in a position where you are approved for a card but the terms are less than desirable, you do not have to keep the card, close the account and shop around for a card that is better suited to fit your needs.     

Third, make sure to shred any pre-approved credit offers you receive in the mail to protect yourself from identity theft.  While these offers usually do not include any personal information, there is always a chance someone could get their hands on it and open up a card in your name. 

Lastly, as I have discussed in a previous post, you can opt out of received pre-approved credit card offers to save yourself and your identity.  Just like a do-not-call list for telemarketers, there is an opt-out clause for credit card companies to stop them from soliciting your business and filling your mailbox with junk mail.  To opt out of receiving these offers log on to to notify the three major credit reporting agencies, Equifax, Experian and Trans Union, that you no longer wish to have your name included on distribution lists.

For more information on pre-approved credit card offers or discuss your situation in greater detail with a licensed attorney, contact SmithMarco P.C. for a free case review.

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