What Are Pre-Approved Credit Cards and Should You Apply?

When scrolling through your socials or going through your mail, you may see your name, a credit card offer and the words, "You are pre-approved". It is one of the easiest and fastest ways to get a credit card.

There's no need to jump from one website to another or worry about the status of your credit card application. Everything is organised into clear, easy-to-follow steps for you.

Getting a credit card used to be a hassle (it still is if you don't have a credit history), but the process is much smoother now. Especially with pre-approved credit card offers landing directly into your inboxes, banking apps and e-wallets. 

But before you hit the very tempting "Apply Now" button, ask yourself:

• Should I take up the offer?
• Do I even need a credit card?
• Are pre-approved credit cards legit?

If you do not have answers to any of these questions and want to know more about how these offers work, we've got you covered. In this article, you'll find all you need to know about pre-approved credit cards to help make your decision easier.

Table of Contents

• Introduction to Pre-Approved Credit Cards
• How Pre-Approved Credit Cards Work
• Benefits of Pre-Approved Credit Cards
• How to Check for Pre-Approved Credit Card Offers
• When Should You Get a Pre-Approved Credit Card

Introduction to Pre-Approved Credit Cards

A pre-approved credit card is basically an invitation from the bank to apply for a credit card. It was sent to you because the bank thinks that you are a good candidate for the same. This "invitation" is not sent out randomly or on impulse. The bank checks out your:

• Credit history
• Debt levels 
• Income 

And based on that, it decides if you are eligible. Credit card pre-approvals are usually only received by those who have good credit scores and stable finances. However, you still have to hit "Apply" to make it official. And there's no guarantee that you'll actually get the card, even after you get pre-approval for a credit card.

How Pre-Approved Credit Cards Work

Once you receive pre-approval for a credit card, you can know one thing for sure: that you meet the bank's basic eligibility criteria. And receiving a pre-approved credit card offer is a great sign that your chances of getting approved are better than average.

But, as we have already mentioned, it does not guarantee that you will get a credit card. Once you actually apply, the bank undertakes a thorough analysis of your credit activity, current income, liabilities/debt and more.

Also, keep in mind that:

• Pre-approval credit card offers can expire, so check their validity date.
• Terms like "lifetime free" may come with conditions like minimum annual spending, lower reward rates, or something else.
• Pre-approved credit card applications can be rejected, and that can negatively affect your credit score.

Remember all this stuff, and only apply after reading and understanding all the pros, cons, benefits, terms and conditions associated with the pre-approved credit card offer.

Benefits of Pre-Approved Credit Cards

Getting credit cards with pre-approvals lets you fast-track through the initial stages of the credit card application process. And it comes with certain benefits:

1. No-hassle application: No long forms, no document uploads, no endless calls with customer care. Since the bank already knows your financial history, applying for a pre-approved card is quick, smooth, and easy.
2. Faster access: Since the bank is inviting you to apply, you may get your credit card approved faster than others, thereby giving you quicker access to credit.
3. Better perks: The bank may give you add-on welcome benefits, reward points, offers, etc., in order to convince you to apply.
4. Low rejection possibility: Since you've already been shortlisted, the chances of getting approved are much higher. Remember, however small, there is still a possibility that you may not get a credit card.
5. Good for credit building: Use your credit card responsibly, pay your dues on time, keep your credit utilisation low, and your credit score will go up. This will help your chances of getting pre-approved loans and other credit cards in the future.
6. Time-saving: If you decide to go for a pre-approved credit card offer, you skip the hassle of scrolling through 10 different websites and comparing different credit cards, hence saving you time and effort.

Pre-approved cards take out the uncertainty and bring in the ease, perks, and power to choose on your terms.

How to Check for Pre-Approved Credit Card Offers

So, are you wondering if a bank has any pre-approved credit card offers with your name on them? Well, the good news is you can check for credit card pre-approvals easily. Here's how to do it:

1. Check your email or bank notifications: You might find an offer waiting for you in your inbox. If you have been maintaining your finances well, you might already have a pre-approved credit card invite sitting in your email or your bank's online portal. Also, look out for terms like "No documentation needed", "Pre-qualify credit card", or "Instant approval".
2. Log in to your bank's online portal: Many banks show pre-approved offers right on your dashboard when you log in. If you've got one waiting, it'll usually pop up somewhere obvious.
3. Use comparison platforms: There are websites out there that let you check for pre-approved credit cards across various banks. You may need to enter your mobile number (maybe even other details), and these websites will fetch offers based on your credit profile.
4. Check your credit score: A score of 750 or over increases your chances of getting pre-approval offers for credit cards. 

Additionally, when performing a pre-approved credit card credit check, don't get blinded by "instant approval"; make sure to understand the benefits and features of the card before you apply. Even a pre-approved credit card is useless if it does not fit your particular needs.

When Should You Get a Pre-Approved Credit Card

Just because the bank has invited you to apply for a credit card does not mean you should. There's more to getting a credit card than just pre-approval. 

If you have your financial life in order:

• Steady Income
• A good credit score
• Low or no debt

Then, by all means, go for it. Credit card pre-approval is based on a surface-level look at your credit history, but once you decide to apply, the bank gets much more thorough in conducting your background check. 

Also, think about what you want from your credit card—cashback, dining benefits, fuel benefits, travel perks, lifestyle benefits—and then shoot your shot. A pre-approved credit card may seem like a great opportunity, but if it does not offer what you need, then why bother?

And hey, don't forget to read the fine print. That "lifetime free" card might come with sneaky conditions and flashy rewards. But it may not always be worth it if the interest rates are sky-high.

Conclusion

So, if you get that coveted "You Are Pre-Approved" notification, you really are the chosen one. However, there's no guarantee that the card is your perfect match or that you will even get a credit card if you apply. 

It may be tempting to skip the research and jump at the offer, but before you tap that "Apply Now" button, you need to read the fine print, compare your options and make sure that the offer truly suits you because easy doesn't always mean right.

And the best way to do that is with Finology Select, where you can compare the pros, cons, fees, features and benefits of over 90 credit cards so you don't end up with the wrong card. 

FAQs

1. What's the difference between pre-qualified and pre-approved?

Even though the terms pre-qualified and pre-approved are used as synonyms, there is a key difference between pre-qualified and pre-approved credit cards. A pre-qualified card offer usually comes after you show interest by either filling out the credit card application form or a survey. It is based on very limited information and only shows that you may be eligible.

However, a pre-approved credit card means that the bank or issuer has already conducted an initial review of your credit history and has deemed you eligible. Pre-approved equals stronger chances of getting a credit card for you than pre-qualified.

2. How accurate is a pre-approval offer?

A credit card pre-approval offer is quite accurate. It means that the bank has already gauged your creditworthiness. However, final approval depends solely on the bank's discretion after an in-depth financial background check on you, including your income, credit and debt history. So, while getting a pre-approval increases your chances of getting a credit card, it does not guarantee it. 

3. Can I be denied after being pre-approved?

Yes, it is possible to be denied even after being pre-approved. Once you submit the full application, the bank will take a hard look at your financial history and verify your financial details. If there are any red flags like unpaid loans, late EMI payments, a drop in your credit score, or inaccurate or falsified information, you may not receive final approval.

4. Will checking pre-approved cards hurt my credit?

No, checking your pre-approved credit card does not affect your credit score because it involves a soft credit inquiry. You can check pre-approved credit cards through your bank or credit card issuer's website. If you want to know how to check pre-approved credit card status online, there are tools that you can use without harming your credit health.

5. How do I find the best pre-approved credit card offers?

To check for pre-approved credit cards, you can log into your banking portal or visit your bank's website. You may also receive offers by e-mail or SMS or as push notifications on your bank's mobile app. 

Alternatively, you can also look towards platforms like Finology Select and compare the features, fees, and rewards of 90+ credit cards to find the one that suits you best.

6. What credit score do I need for pre-approval?

Usually, pre-approved credit card offers are received by people who have a good credit score above 650. However, credit cards with pre-qualification are also available to those with lower credit scores. If you want to receive pre-approved credit card offers, you have to maintain a good credit history.