How to Read Between the Lines of a “Preapproved” Credit Card Offer: New Consumer Report from GoBankingRates.com

Personal finance website, http://www.GoBankingRates.com, investigates what creditors really mean when they use the term “preapproved” on their offers. The report uncovers that preapproved credit cards are actually an industry ploy that lure consumers into applying for new cards.

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Preapproved Credit Cards

Preapproved Credit Cards

That’s like saying you’ve been preapproved for a job because you have the degree the employer requires. You could get the job, but the employer has plenty of additional factors to consider before deciding whether or not to extend an offer.

El Segundo, CA (PRWEB) March 29, 2013

The average American adult receives nearly 560 pieces of junk mail each year, according to The City of Dallas, which amounts to around 11 pieces per week. Included in this overflow of junk mail are alluring-- and unsolicited-- credit card offers suggesting that consumers have been preapproved for a new line of credit. To some, it may sound too good to be true – and according to a new consumer report from GoBankingRates.com, it is. The personal finance site recently examined the process behind preapproved credit cards, discovering credit card companies are using the word “preapproved” in a misleading way.

The report explains how an individual who receives a preapproved credit card offer hasn’t actually been approved. In actuality, he or she has only been admitted into the credit card offer “preapproval stage,” based on their credit score. While consumers may have met this preliminary qualification, other heavily-weighted approval factors, such as income, have not been considered by credit card companies at this point.

“That’s like saying you’ve been preapproved for a job because you have the degree the employer requires,” explains Clay Wyatt, GoBankingRates contributor and lead reporter for the investigation. “You could get the job, but the employer has plenty of additional factors to consider before deciding whether or not to extend an offer.”

Wyatt continues, “Credit card preapprovals from legitimate issuers are not technically scams, they’re marketing gimmicks. The line between the two isn’t always clear, but in a legal sense, the issuer is usually playing by the rules.”

The report also includes:

  •     Details about how credit card companies identify prospective “preapproved” customers
  •     Various types of preapproved credit card scams, such as:
        -    Guaranteed credit limit without individual’s specific credit information
        -    Payment requirement before receiving a physical credit card
        -    Lack of contact information of creditor

View the details here.

For questions about this report or to schedule an interview with a GoBankingRates editor, please use the contact information below.

About GoBankingRates

GoBankingRates.com is a national website dedicated to connecting readers with the best interest rates on financial services nationwide, as well as informative personal finance content, news and tools. GoBankingRates collects interest rate information from more than 4,000 U.S. banks and credit unions, making it the only online rates aggregator with the ability to provide the most comprehensive and authentic local interest rate information.

Contact:

Jaime Catmull, Director of Public Relations
GoBankingRates.com
JaimeC(at)GoBankingRates(dot)com
310.297.9233 x261

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Source: Dallas City Hall, How to Stop Junk Mail: dallascityhall.com/sanitation/pdf/JunkMail.pdf

Image: Scoobyfoo via Flickr Creative Commons


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Why You Never Really Qualify for 'Preapproved' Credit Card Offers in the Mail Why You Never Really Qualify for 'Preapproved' Credit Card Offers in the Mail

Why You Never Really Qualify for 'Preapproved' Credit Card Offers in the Mail