Details about Pre-Approved Credit Cards

A bank or credit card provider will offer you pre-approved card- but is this product all about? It signifies that the bank or Credit Card Company has gone through your CIBIL score and finds you eligible for the credit card in question and drops you an automatic mailer so that you get interested in the offer and contact them to buy the card. The provider would still assess your credit history once again, and if it finds your credit score not up to the mark, then your credit card application can get rejected.

Should you buy a Pre-approved Credit Card?

Though the offers on pre-approved card may seem attractive due to promises such as low interest rates, or lifetime free cards, you must consider some facts:

• Annual percentage rate can rise to 36-40 percent. Thus, low interest rates may not make much of a difference. All banks keep the interest rates low as much as possible to stay in the competition.
• Annual fees may be waived off but it does not mean you have got a free or lifetime credit card. The discount will be temporary in most of the cases, so make sure what the details are about the same before purchasing the credit card.
• There could be scam offers when your credit card comes close to expiration dates. The provider may not inform you about complete terms and conditions or deter from revealing contact information. They may ask upfront payments without even giving the card.

When to Choose a Pre-approved Credit Card?

In case you are unsatisfied with current credit card due to rewards, cashback schemes or any other, then you can check for pre-approved credit card and cut the efforts needed to manually compare credit cards and their offers before selecting one. Pre-approved credit cards are best if you have a good CIBIL score or capacity to repay on time.

But if you purchase the card only because the offer seemed interesting, then you should not take it. Keeping a credit card inactive is not wise for credit history. Thus, buy a pre-approved card after studying all its details, terms and conditions, and only when you require one.