» Pre-Approved Credit Cards
Looking for pre-approved credit cards? If you’ve received letters from banks in the past, telling you that you’ve been pre-approved for a credit card, you shouldn’t jump to the conclusion that you will necessarily receive the desired card. Banks use this little ploy to cut down on wastage in their marketing campaign, since they only select existing customers whose profile roughly fits the bill of a responsible credit card holder.
Later, when a customer applies for a card, the bank makes a far more thorough inspection of the customer’s financial circumstances and spending habits, and more often than not, a previously “pre-selected and approved” customer is rejected, if the bank feels they are not a perfect match.
Annoyingly, your inquiry will be recorded by the major credit referencing agencies. The best way to start looking for credit cards is therefore to start by getting out a credit report on yourself. It is not expensive and easy to do online. It gives you a chance to see what a potential credit card provider is going to see and you can rectify any errors or ambiguities before you apply for any form of credit. You may suddenly realise that the joint account you hold with your partner, who has been paying all the monthly bills, is holding you back from obtaining your own credit history.
Providers like Discover, Bank of America and First Premier Bank for example offer preapproved credit cards, but customers should be cautious. The approval process is typically conducted in privacy online and normally doesn’t take long. Some card providers, it has been claimed, offer pre-approved cards with a 79.9% APR on purchases. Indeed, the US government has published a helpline telephone number (1-800-FED-INFO (333-4636)) and some guidelines on their website www.usa.gov/topics/money/credit/credit-cards.html to put people on their guard about some of the hidden “extras” in the fine print that comes with every card offer for pre-approved cards.
Pre-approved cards are not to be confused with “no credit check cards”, which are usually cards that are secured or prepaid like the Vision Premier Card by Visa or the NetSpend Visa Prepaid Debit Card or the Orchard Bank Classic MasterCard, which charges 7.99% APR for secured cards.
Prepaid and Secured Credit Cards:
Prepaid cards are aimed at people with either no credit history or an adverse one, but are not designed for those who want to build up a credit history quickly. Here customers deposit an amount and their spending limit is than usually set at just below the amount deposited.
With secured cards secured cards customers must make an initial payment as security and are then given a small credit line of usually no more than $300 to start off with. These cards often attract a high interest rate, which can be above 30% APR; the annual fee and set up fee may be as much as $50, which is initially taken out of the credit limit, leaving the cardholder with just $250 or less to conduct their financial transactions with.
Orchard Bank, Western Union Moneywise, Capital One, Citi and US Bank all issue secured cards, as do many more financial institutions.