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Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes

Credit card pre-approval

You may well have received a letter or e-mail from a credit card issuer claiming to offer you ‘pre-approval’ on a credit card.

Read our guide to find out exactly what pre-approval constitutes and whether or not it will actually improve your chances of taking out a credit card.

In This Guide:

What does pre-approval mean?

Credit card issuers often send out letters or e-mails to prospective customers labelled as pre-approved applications.

Inside the letter will simply be an application for a credit card often with some kind of special deal mentioned. The deals mentioned can be quite tempting and while there’s nothing in principle wrong with them, you should take note of a few things before you jump in.

Essentially, ‘pre-approval’ is something of a misnomer as it does not by any means guarantee you a credit card.

Pre-approval does not guarantee you a credit card

The label ‘pre-approval’ may be somewhat misleading as receiving a credit card pre-approval letter does not mean you are automatically entitled to a credit card.

The credit card company will have gotten hold of your details either from a mailing list or from a list of current or previous customers.

The upshot of this is that when they send out pre-approval letters, the credit card issuer does not actually have access to all of the information necessary to be able to offer you a credit card. Until you actually formally apply, they will not be able to access your credit history.

Your credit history needs to be examined in order for the issuer to be able to work out what kind of card they can offer you, if they can offer you one at all.

If you receive a credit card pre-approval letter, the best thing you can do before hurrying to return the filled in application form to the company who sent it to you is to check your credit history yourself.

You can do this by getting in touch with a credit checking agency like Experian. Doing so will allow you to have a better idea of the kind of card you’ll be able to take out, putting you in a more solid position when you actually do apply.

Pre-approval as a marketing tactic

Credit card pre-approval schemes are essentially little more than a marketing tactic. The letters or e-mails that get sent out are deliberately laid out to entice customers and to make them think that the approval process is already further along that it actually is.

This doesn’t mean it is a scam though, as any deals that are mentioned within the letters you get may well be good. The only problem is that not everyone who gets sent a pre-approval letter will actually be able to be approved for a credit card.

This is, in reality though, not far off what happens with advertised representative APRs. The representative APR you see advertised is the rate that at least 51% of customers can get, which means that for just under half of the people who apply, the rates could be worse.

Compare credit cards online

To see how well the deal you’re apparently offered in your pre-approval letter matches up to the competition, head over to our credit card comparison page. We can show you a list of the best cards in each category so that you can pick for yourself whichever one you think is best.