Chances are that you’ve received plenty of credit card offers in the mail. When it comes to earning bonus points you may find a gem here or there, but you probably just consider most of it junk mail.
So, why do you get such offers in the first place? What does the lingo on such offers mean? Are you guaranteed to get such cards? How will your credit score be affected? Most importantly (for some of you) – how can you stop getting these offers?
Generally the credit card issuer will obtain your information in one of the following three ways:
- Through charities, clubs and organizations, credit card companies, magazines, manufacturers and retailers that rent customer (or member) lists to them
- Through credit reporting agencies that provide lists of creditworthy consumers
- This one will probably strike a nerve in most people – Through “List compilers”, which are companies that purchase information from various private and public sources to compile lists of consumers for specific marketing purposes.
After obtaining your name from one of the above lists, the issuer then decides whether or not to send you an offer in the mail. If you receive an offer, you are eligible under the initial standards that the issuer has set.
Pre-Selected and Pre-Approved
Pre-Selected and Pre-Approved mean virtually the same thing. Each means that the issuer has screened (or had someone screen) a list of potential customers and they liked what they saw with you.
The only major difference between being labeled as pre-selected and pre-approved is in terms of the confidence that you can place in each. While each source has a different explanation for this, the gist of it is that pre-selected ranks lower on the totem pole than pre-approved. Basically, if you are pre-approved, the offer is a bit more serious than a pre-selected offer. That’s about it.
It is important to note that, in either case, the offer is not set in stone. The offer that is presented to you may not be the final offer that you receive.
Be sure to read the fine print on any offer that says that you’ve been pre-selected or pre-approved. This way, you won’t get caught up in a loophole that was explained at the bottom of the last page in size two font!
If you are approved for a credit card, it means just that. The issuer has accepted you as a customer and you will get the card that you applied for. It’s as simple as that.
If you’ve received an offer that says that you’ve been pre-selected or pre-approved, the issuer can still decline to give you a credit card. This is because the original reason that they extended the offer to you is no longer valid or something else came up that led them to reconsider their decision.
Suppose that you initially were sent an offer because your credit score was 790. You let the mail pile up for a while and didn’t reply to the offer until 6 weeks later. During that time, your car was repossessed and you lost your job. As a result, your credit score plunged to 500.
In the above situation, the issuer will almost certainly decline to proceed with their offer. They’ll view your updated financial situation as too risky for them to let you use their money. Think of it this way – would you let your friend borrow $5,000 from you if he was in the above situation? If so, you’re either feeling very lucky or are very well off!
Essentially, any offer that has the word “Pre” attached to it is a targeted marketing effort. It is not a guarantee of acceptance – just an opportunity for the issuer to reach out to you and hope that it all works out.
If you reply to an offer that you received in the mail (or apply for a credit card through some other method) and are subsequently declined, your credit score will suffer. How drastic the impact is depends on several factors.
The impact has to do with your credit history. Those with long and substantial credit histories will not suffer much from being declined for a credit card while those with no, little or poor credit histories will end up with much lower scores.
We have discussed this topic a few times before, be sure to check out our post on how to stop credit card junk mail as well if this is an issue.
If you just tear up and recycle or dispose of credit card offer that you get in the mail, it is a good idea to stop them from coming in the first place. After all, why waste your time and energy tearing up offers that you are not interested in?
According to the Federal Trade Commission (FTC), you may opt out of credit card offers via telephone or over the Internet. To opt out of credit card offers for 5 years, call 1-888-5-OPT-OUT or visit www.optoutscreen.com. If you’d like to opt out permanently, visit the said website, complete your request, print out the Permanent Opt-Out Election form and return the signed form to the provided address.
If you’d rather opt out via mail, you may contact the consumer reporting agencies directly. According to the FTC, you should send a written request that states that you wish to permanently opt out of future credit card offers. Include your name, social security number, telephone number and date of birth and mail it to each of the following:
P.O. Box 740123
Atlanta, GA 30374-0123
P.O. Box 919
Allen, TX 75013
Innovis Consumer Assistance
P.O. Box 495
Pittsburgh, PA 15230-0495
Name Removal Option
P.O. Box 505
Woodlyn, PA 19094
If you are in the market for a new credit card, pre-selected and pre-approved offers can be an excellent source of information for potential cards. Just be sure to read the fine print and keep in mind that you may not qualify for such cards if your financial situation changes.
However I think that the majority of the population would probably rather do away with such offers. If this is you, than just follow the steps listed above. According to the FTC, you can always opt back in, (For some reason I would be willing to bet that no one has done that yet though). Besides, you could just contact any issuers that you want to directly, so there is very little risk in opting out of such offers.