Last Updated:
Pre-Approved Credit Cards: Pre-approved credit cards are useful for those who use credit responsibly and make timely payments. But before taking the offer, read its charges, interest rate and conditions. The bank’s offer is beneficial only if it is as per your need and paying capacity.
What is pre-approved credit card?
Pre-approved credit card is an offer that banks or card issuers make to customers who have a good credit score and strong payment history. Its advantage is that it does not require much documentation or a lengthy approval process. The customer can get the card in just a few clicks. Even with pre-approved credit card offers, formal application and verification is required. First there is the soft inquiry, which does not affect the credit score.
what are the advantages?
- Instant approval and minimal documentation
- Possibility of getting better credit limit
- Bonus reward or cashback offer from the bank
- Priority service to existing customers
What are the disadvantages?
- Limit is less, no facilities like premium card.
- Offer is time limited, if you delay you may lose benefits.
- If you depend only on these, better cards may be missed.
Caution is necessary
According to experts, banks mostly pre-approve low value cards. Choose the best card after looking at your spending and bank relationship. In the long run, it is not beneficial to stick only to pre-approved. It is not wise to accept every offer unconditionally. The interest rates and annual fees on pre-approved cards may be higher than normal cards. Also, if you already have multiple credit cards, getting a new card can affect your credit score.
