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What credit card preapproval really means

June 04, 2022
6 min read
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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 a pre-approval guarantees that a card issuer will give you a credit card in your name.

Here's what it really means when you receive a pre-approved credit card offer.

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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 primary way the credit bureaus make money is 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 receives 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 make an offer of 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 would appear on your credit report to let you know that the card issuer had accessed some of your credit information.

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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 make sure 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 for 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 turn down 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 you 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.

As with preapproved offers that card issuers send out on their own, a pre-qualification doesn’t guarantee that you’ll be eligible for a particular credit card product. But going through the pre-qualification process can help you to make a more informed decision before you fill out an official credit card application.

Related: How to find the best pre-qualified credit card offers

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • Terms Apply.
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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

5XEarn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year.
5XEarn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
  • Intro Offer
    Earn 80,000 Membership Rewards® points after you spend $6,000 on purchases on your new Card in your first 6 months of Card Membership.

    Earn 80,000 Points
  • Annual Fee

    $695
  • Recommended 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.

    670-850
    Excellent/Good

Why We Chose It

Sometimes it's worth a large investment to reap the benefits of a great credit card. That's exactly the case with the Amex Platinum card. In exchange for the annual fee, you'll unlock access to the Amex Membership Rewards program that let you access airline and hotel transfer partners, along with new lifestyle and travel credits. This card is also incredibly rewarding for travel purchases, helping you rack up a ton of Membership Rewards points for your next award trip.

Pros

  • The current welcome offer on this card is quite lucrative. TPG values it at $1,600.
  • This card comes with a long list of benefits, including access to Centurion Lounges, complimentary elite status with Hilton and Marriott, at least $500 in assorted annual statement credits and so much more. (Enrollment required for select benefits.)
  • The Amex Platinum comes with access to a premium concierge service that can help you with everything from booking hard-to-get reservations to finding destination guides to help you plan out your next getaway.

Cons

  • The high annual fee is only worth it if you’re taking full advantage of the card’s benefits. Seldom travelers may not get enough value to warrant the cost.
  • Outside of the current welcome bonus, you’re only earning higher rewards on specific airfare and hotel purchases, so it’s not a great card for other spending categories.
  • The annual airline fee statement credit can be complicated to take advantage of compared to the broader travel credits offered by competing premium cards.
  • Earn 80,000 Membership Rewards® points after you spend $6,000 on purchases on your new Card in your first 6 months of Card Membership. Apply and select your preferred metal Card design: classic Platinum Card®, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu.
  • Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year and earn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
  • Get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings, which requires a minimum two-night stay, through American Express Travel when you pay with your Platinum Card®.
  • $240 Digital Entertainment Credit: Get up to $20 back each month on eligible purchases made with your Platinum Card® on one or more of the following: Audible, Disney+, The Disney Bundle, ESPN+, Hulu, Peacock, SiriusXM, and The New York Times. Enrollment required.
  • $155 Walmart+ Credit: Cover the cost of a $12.95 monthly Walmart+ membership with a statement credit after you pay for Walmart+ each month with your Platinum Card. Cost includes $12.95 plus applicable local sales tax. Plus Ups are excluded.
  • American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. There are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year in baggage fees and more at one select qualifying airline.
  • $200 Uber Cash: Enjoy Uber VIP status and up to $200 in Uber savings on rides or eats orders in the US annually. Uber Cash and Uber VIP status is available to Basic Card Member only.
  • Get up to $300 back per calendar year on the Equinox+ digital fitness app, or eligible Equinox club memberships when you pay with your Platinum Card. Enrollment required. Learn more.
  • Breeze through security with CLEAR® lanes available at 100+ airports, stadiums, and entertainment venues and get up to $189 back per calendar year on your membership when you use your Card. Learn more.
  • $695 annual fee.
  • Terms Apply.
  • See Rates & Fees