The Truth About Pre-approved Credit Offers

Do you receive numerous credit card offers in the mail on a weekly basis? Many of these offers say that you have already been pre-approved. Don’t get too excited when you get the pre-approved credit card applications. If you read the fine print, you will discover that pre-approval is subject to the creditor checking your credit report and application. Frequently, the application is denied.

Credit card companies that send you these pre-approved solicitations get your name from mailing organizations that receive the information from the credit reporting agencies, TransUnion, Equifax and Experian. The creditors give the mailing company guidelines for potential customers. The credit reporting agency then sells the mailing company a list of names.

You are under no obligation to accept these offers. If you decide not to accept the offer, cut up the pre-approved solicitation and throw it away. If not properly disposed, the information in the solicitation may be stolen and used to steal your identity.

If you accept the offer, complete the application, but be sure and read the fine print and disclosures. Many pre-approved offers are for low interest teaser rates. The solicitation may be for you to transfer your current balances with higher interest rates to the new lower interest rate card. By reading the find print, you may discover that if you are even one day late in making your payment, your interest rate will be increased. The increase of the interest is usually higher than the interest rates on the cards you transferred. Also be aware that it may take several months for the transfer of the balances on your other cards to take place. So if you quit making your payments on the credit cards that are being transferred before the transfer is complete, your credit report may reflect late payments which will hurt your credit score.

Teaser rate cards are have low interests for a short period of time. It is important that you know how long the time period is that the interest rate will be low and how much the rate will increase. It may not be the best offer for you to accept. If it looks to good to be true, it probably is.

If you are tired of receiving multiple pre-approved offers, you can request to have your name taken off the credit reporting agencies’ mailing lists. Call 888 5OPTOUT (888-567-8688) to have your name removed.

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