Have you ever received pre qualified or pre approved credit card offers in the mail? If you have not, it is very likely that sooner or later you will. If you have, it may be a sign of good things to come. What exactly are pre-approved credit cards? The answer is fairly short and simple.
When searching for new customers, credit card companies will pre-screen potential applicants. They do this by checking a consumer's credit rating with the major credit reporting bureaus. A credit card company will then mail that consumer a pre qualified application notice. Chances are you have received at least one if not dozens of these pre qualified or pre approved offers from various credit card companies over the years; particularly if you have good to excellent credit. In the pre qualification letter the consumer will be prompted to visit a website or call a telephone number where the consumer can complete and submit an application.
The term pre approved credit card is a bit of a misnomer. Sometimes these offers lead people to refer to the credit cards as pre-approved credit cards. In actuality there is no such thing as a pre-approved credit card because it is the applicant that is actually pre-approved not the credit card. Nevertheless, the term pre approved credit card is beginning to catch on due to the fact that many of these credit card applications often contain the terms "pre approved" or "pre qualified."
Sometimes these offers can be used to gauge how credit card companies view an individual's credit history. For example, if you have had less then perfect credit and you begin to receive pre approved offers from credit card companies other than those offering credit cards for people with less then perfect credit, this may be a sign that your credit is improving. It may also give you a clue regarding how a potential creditor now views your credit history. Conversely, if you know you have good to excellent credit and you begin receiving pre approved offers for people with bad credit, this may be a sign that your credit rating has taken a hit. More ominously, it may also be an indication of fraud or identity theft. In this instance you would want to immediately get copies of your credit reports.
Each year credit card companies spend billions of dollars screening and mailing potential applicants in order to stimulate new business. Although some recipients get frustrated after receiving numerous pre approved offers, the fact that you receive a great deal of these offers may be a very good sign. Sometimes you can gauge how well the economy is doing by the number of these applications mailed. In years of good economic growth with strong employment, you may see your mailbox flooded with these offers. In years of not-so-good economic growth with high unemployment these offers may slow to a trickle. So the next time you or someone you know receives numerous pre approved offers you may want to trade frustration for joy because it may be a sign of good economic growth and falling unemployment. Surely everyone can appreciate that.
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