By LaToya IrbyWhat Is a Preapproved Credit Card Offer?
Quick Answer
A preapproved credit card offer means a card issuer believes you’re eligible for a credit card. If you apply and are approved, you’ll receive a credit card with the rewards, benefits and terms listed in the offer.
If you've received a preapproved credit card offer, it means the card issuer has identified you as someone who likely meets the qualifications for that card. A preapproved credit card offer is based on certain credit criteria and designed to encourage you to apply. While preapproval can make it easier to identify cards you're likely to qualify for, it's important to understand how these offers work before you apply.
What Is a Preapproved Credit Card Offer?
A preapproved credit card offer is a request for you to apply for a specific credit card, usually with a predetermined set of terms. These offers are sent by credit card issuers to consumers who meet certain criteria based on credit data.
Being preapproved means you fit a credit profile the issuer is targeting—but final approval depends on a full review of your credit report and application.
The offer may include features such as:
- A welcome bonus
- Rewards rate or cash back structure
- Promotional annual percentage rate (APR) and how long it applies
- The ongoing APR after the promotion ends
- The card's annual fee, if applicable
- An invitation ID
You may also see the term "prequalified" used in place of "preapproved." They generally mean the same thing when it comes to credit card offers.
Learn more: What to Consider When Choosing a New Credit Card
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Does a Preapproval Impact Your Credit Score?
Preapproval for a credit card offer doesn't affect your credit score since the issuer only performs a soft inquiry to review your credit history. That means it doesn't show up on your credit report as an application for credit. When you decide to apply, the lender will do a hard inquiry on your credit, which may slightly impact your score for a short time.
Tip: Only hard inquiries from the past 12 months are included in calculating your credit score. Typically, any dip in your score after a credit card application is only temporary.
How Does Preapproval Work?
Card issuers use credit data to identify consumers who match the profile for a specific card. This prescreening process uses data from:
- One or more of the consumer credit bureaus (Experian, TransUnion and Equifax)
- FICO scoring models
- The card issuer's own customer database
Once the list is generated, credit card offers are mailed or emailed to potential applicants. It's important to note that credit card issuers are not allowed to send an actual credit card unless you formally apply. Preapproval is simply a way to target consumers who are most likely to qualify.
If you choose to apply after receiving a preapproved offer, and your application is approved, the issuer must honor the terms that were originally presented in the offer.
You can also check your preapproval status directly on many issuers' websites. These tools let you share basic information and preview cards you're likely to be approved for, without a hard credit inquiry.
Does Preapproval Guarantee Approval?
No, preapproval doesn't guarantee approval for a credit card. Once you apply, the card issuer will perform a full credit check and may deny your application for several reasons, including:
- Too much debt relative to your income
- Too many recent applications that suggest credit shopping
- Credit score below the issuer's minimum threshold
- Limited credit history
- Negative items on your credit report, such as late payments or collections
If your application is denied, you'll receive an adverse action letter explaining the reasons.
Learn more: What Happens After I Apply for a Credit Card?
Pros and Cons of Preapproved Credit Card Offers
There are benefits and drawbacks to receiving preapproved credit card offers. Understanding both can help you make informed decisions.
Pros
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Saves time: Preapproved offers help streamline your search by highlighting cards you're likely to qualify for. This means less time researching options and comparing terms across dozens of credit cards.
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No credit impact: Since preapproval is based on a soft inquiry, it doesn't affect your credit score. You can explore your options without worrying about damage to your credit.
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Higher approval odds: Because the issuer has already screened your credit profile, you're more likely to be approved if you apply. This can help reduce the frustration and uncertainty that comes with applying blindly.
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Better offers: Preapproved offers may include terms that aren't publicly advertised, such as a higher welcome bonus or an extended 0% intro APR period. These tailored deals can sometimes be more competitive than what's available online.
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Opportunity to rebuild credit: If your credit score is low, getting approved for a new credit card can be difficult. A preapproved offer from a card issuer indicates they see potential in your credit profile, giving you a valuable opportunity to rebuild your credit.
Cons
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No approval guarantee: Even if you're preapproved, the issuer can still deny your application after a full credit review.
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Junk mail: Preapproved offers often come by mail, adding to your pile of paper clutter. They may also contain personal information, so it's important to shred them to avoid identity theft.
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Risk of too many credit cards: Receiving enticing offers might tempt you to apply for credit you don't need. Opening too many credit cards can hurt your credit score and make it harder to manage your finances responsibly.
How to Opt Out of Preapproved Offers
If you'd prefer not to receive preapproved offers, you can opt out for five years or permanently at optoutprescreen.com or by calling 888-5-OPT-OUT (888-567-8688). You can opt in using the same methods if you change your mind later.
Keep in mind, this only prevents offers generated through credit bureau data. Issuers may still contact you using other methods, such as from an existing relationship or third-party sources.
The Bottom Line
Preapproved credit card offers can be a helpful way to find credit cards that align with your credit profile. While they don't guarantee approval, they may offer better terms and reduce the time you spend comparing offers. You can always use Experian to compare credit card offers that match your credit profile, with no impact to your credit score.
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About the author
LaToya Irby
LaToya Irby is a personal finance writer who works with consumer media outlets to help people navigate their money and credit. She’s been published and quoted extensively in USA Today, U.S. News and World Report, myFICO, Investopedia, The Balance and more.
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