The Good And Bad Of Prescreened Credit Card Offers

Before we begin, here’s a quick activity – Take a closer look at your mail inbox. We’re sure that you would have a couple of unopened emails (or even a dozen) stating that you’re “prescreened,” “pre-qualified,” or “pre-approved” for a credit card.

You probably receive these emails at least a few times a week. Have you ever wondered where these offers come from and why you’re chosen? Not sure if you should look more into these offers? Or should you outright chuck them to the trash bin?

This guide helps you understand the pros and cons of a prescreened credit card offer. Continue reading so that you can make the right decision the next time you come across a similar offer.

What is a prescreened credit card offer?

Sometimes, banks and other credit card agencies request databases of customers with a good credit score from credit bureaus. These databases contain a list of all consumers who meet the requirements of the bank/credit card company. For example, a bank may request a credit bureau to provide them with a database of customers with credit scores over 750.

The lender then sends out a prescreened credit card offer to all customers on this list. Banks and credit card agencies offer prescreened credit card offers because it helps them target customers with stellar credit histories. By providing these customers with attractive terms on the credit card and rewards, the bank can entice the customer to apply for the card.

The primary objective of prescreened credit card offers are to help banks and credit card agencies expand their customer base. Furthermore, these lists allow them to target the right customers who match their customer profile requirements. Credit card agencies use prescreened lists to avoid sending offers to customers who do not meet their needs. Similarly, it also eliminates customers from receiving irrelevant offers.

Does that mean I am guaranteed the credit card if I choose to pursue the prescreened offer?

Sorry to disappoint you, just because you receive a prescreened offer, it doesn’t mean you’re guaranteed the card. If you choose to apply for a prescreened offer, you must go through eligibility checks once again.

Typically, when a credit card company/bank creates a database of consumers to include on the prescreened list, they look only at the basic consumer profile. No in-depth check is done on each applicant. You can think of it as a “soft inquiry” on your credit.

Only when you respond to the offer and decide to apply will the credit card agency or bank begin the in-depth checks. This is when a hard inquiry is made on your credit. Based on the hard inquiry findings, the credit card agency may or may not decide to offer you the card.

If your credit score has changed significantly between the time your name popped on the prescreened list and when you apply, then the credit card agency/bank may withdraw their offer, and you no longer will qualify for the card.

Do prescreened offers affect my credit score?

No. Receiving any number of pre-approved/pre-qualified/prescreened credit card offers in the mail do not impact your credit score. Even though the credit card agency/bank requests for your credit information from the credit bureaus, they are basically making only a soft inquiry on your credit report. Soft inquiries do not impact your credit score.

Let’s suppose you decide to apply for these offers. In that case, the credit card company/bank begins the in-depth credit check leading to a hard inquiry. Multiple hard pulls made on your credit report within a short time may cause your credit scores to drop by a few points.

So, make sure to evaluate the offer carefully. Weigh the pros and cons and apply for the card only if you need it.

How to stop receiving these offers?

The easiest way to stop receiving these offers in your inbox is to tap the “unsubscribe” button. Once you unsubscribe, the credit card company/bank will stop sending you these promotional offers.

When to say yes to prescreened credit card offers?

  • If you’re not satisfied with your current credit card – high-interest rates, not enough rewards – then applying for a prescreened credit card with better rewards and lower interest rates may be beneficial.

However, remember that you still need to do your research. Connect with the credit card company/bank that has issued the prescreened offer and scrutinize the terms and conditions carefully. If you’re satisfied with the offer, then you can go ahead and apply for the credit card.

Why should you think twice before applying for a prescreened credit card offer?

If you’re getting these offers, then it means that you’re on a list of potentially desirable customers. This means you’re likely to receive more offers. Instead of applying to the first offer you receive, you need to ensure that you compare and evaluate all offers that you receive to make the right choice.

Remember that even if you apply for the prescreened credit card, you are not guaranteed a credit card. Even if you’re approved for the card, you may be charged with a higher interest rate than mentioned in the offer. So, due diligence is necessary. You need to do your homework, compare the offers on the market to ensure that you’re getting the best offer available.

The Bottom Line

Receiving a pre-approved credit card offer in the mail may feel like winning a prize. But, before you respond, keep in mind that there may be other better offers for you. So, shop around, check the available offers, and pick the best deal. Using a credit card aggregate site like CreditMantri can help you find all the offers matched to your credit profile in a single place. You can then evaluate the pros and cons and choose the best deal that works for you.

Be informed and make smart credit decisions!