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
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Annual Fee
Recommended Credit
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
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- 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.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
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- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 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. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
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 $6,000 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.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.