What credit card preapproval really means
Have you ever opened your mailbox to find an advertisement from a credit card company? If so, you may have received a pre-approved offer of credit.
Getting a credit card pre-approval can be nice if you're in the market for a new credit card, especially if the card comes with a special welcome offer. But you shouldn't think that pre-approval guarantees that a card issuer will approve your credit card application if you apply.
Here's what it really means when you receive a pre-approved credit card offer.
How pre-approved credit card offers work
In the United States, there are three major credit bureaus (Equifax, TransUnion and Experian) that collect and maintain financial data about millions of consumers. The credit bureaus make money primarily by selling that data to other businesses like credit card companies, lenders and insurance providers.
Credit card companies often purchase consumer data from a credit bureau for marketing purposes. A card issuer can give a credit bureau a set of search criteria (i.e., location, minimum credit score, no bankruptcies, etc.) and then receive a list of consumers that match those requirements.
Per the Fair Credit Reporting Act (FCRA), the credit bureaus may share (aka sell) consumer credit information to companies that wish to offer credit or insurance.
For example, a card issuer could buy a list of 2 million consumers (names and addresses) in the Chicago metro area with the following criteria:
- A minimum FICO score of 700
- No late payments in the past two years
- No bankruptcies on their credit reports
If your name appears on the list, a soft credit inquiry will appear on your credit report to let you know that the card issuer has accessed some of your credit information.
The credit card company might then mail out a "firm offer of credit" to everyone included on the prescreened list.
Tip: If you don't want the credit bureaus to share your information with other companies for marketing purposes, you can visit OutOutPrescreen.com or call 888-5-OPTOUT.
What happens when you want to accept a pre-approved offer?
Getting a pre-approved offer can be a good sign when it comes to your odds of qualifying for a new credit card account. However, it's not a guarantee of approval. Some card issuers may use the term "pre-approved" without a soft credit inquiry. Even with a firm offer of credit that includes a preliminary credit check, you still have to apply to open a new account. Be sure to note on any documentation you receive from the issuer whether you have to apply through a dedicated link or include a specific application code.
An official application can help the card issuer ensure you meet its full criteria to qualify — including income, employment status and other factors. The card issuer will also perform a hard inquiry on your credit report to see if anything in your credit history has changed between the time it sent you a pre-approved offer and the application. According to FICO, a new hard inquiry may temporarily lower your credit score, though usually by fewer than five points.
Related: 4 incorrect assumptions about your credit score
Why you might be denied after a pre-approved offer of credit
It isn't common, but a credit card issuer could deny your application even after sending you a pre-approved offer of credit. The exact reason for such a denial can vary from one applicant to the next. Below are a few reasons why a card issuer might reject your application after sending you a pre-approved offer.
- Negative credit changes: Credit changes that indicate you could now be a riskier borrower might cause a credit card company to change its mind about a pre-approved offer. Such changes might include new late payments, lower credit scores, higher credit utilization, new credit inquiries or other types of information the card issuer considers to be negative.
- Debt-to-income issues: Your income doesn't appear on your credit report. So, a card issuer won't know how much money you earn — and how that income relates to your existing debts — until you fill out an official application. You'll need to satisfy all of a card issuer's qualification requirements (income-related criteria included) to qualify for a new account.
- Internal policies: Credit card companies can set their own internal application restrictions that you need to satisfy to qualify for a new account. Chase, for example, has its unpublished 5/24 rule that prevents most consumers who have opened five or more credit cards in the last 24 months from opening a new credit card account with Chase. And if you already have several accounts open with a card issuer, you might not be eligible for another, or you could have to reshuffle around your available credit limits to open a new account.
Related: The ultimate guide to credit card application restrictions
How to get pre-qualified for a credit card
It's easy to shop around for the best credit card offers available. Yet figuring out which credit card offers you're most likely to qualify for can be more of a challenge — especially if you're struggling with less-than-perfect credit or have little to no established credit history.
The good news is that there are several online tools you can use to figure out if you're a good candidate for certain types of cards. You can use CardMatch to discover whether you pre-qualify for certain card offers from American Express like The Platinum Card® from American Express and the American Express® Gold Card. Capital One and Discover offer pre-qualification tools as well.
Bottom line
As with preapproved offers that card issuers send out independently, a pre-qualification doesn't guarantee that you'll be eligible for a particular credit card product. However, going through the pre-qualification process can help you make a more informed decision before you fill out an official credit card application. As always, be sure your credit score and history are in good standing while also noting an issuer's restrictions before applying.
Related: How to find the best pre-qualified credit card offers
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.