Apply for Credit Card!
You are checking your email when you see that your bank has offered a pre-approved Credit Card. The email claims to
have many benefits, including an easy application process and the opportunity to boost your credit score. However,
as
you are unsure about what is a pre-approved Credit Card, you turn down the offer. Read on to know what is a
pre-approved Credit Card and how it will benefit you, so that you can accept the offer the next time it lands in
your
inbox.
Pre-approved Credit Cards
A pre-approved Credit Card is a
Credit Card that your bank or the card issuer offers you, even if you have
not
applied for it.
Banks extend such offers to customers who have a solid repayment history, a high credit score, or a long-standing
financial relationship with them. Despite the offer, you need to go through the Credit Card application process of
your bank. You need to make an application, submit the documents
required for a Credit Card, and wait for the approval.
Facts about pre-approved Credit Cards
You may have understood what a Credit Card pre-approval is, but you must also know three key facts about such Credit
Card offers.
1. It does not guarantee approval
While a pre-approved Credit Card offer from your bank is flattering, it
can still be rejected if you don't meet the eligibility criteria set by the bank.
2. It is time-bound
If you don't apply for a Credit Card within the set time limit, pre-approved
Credit Card offers expire. Check when your Credit Card offer is going to expire and submit your application on time.
3. No impact on credit scores
Receiving a pre-approved Credit Card offer will not change your credit score,
as these are based on soft credit checks. However, when you apply for a Credit Card based on this offer, your credit
score gets impacted. If your application is rejected, your credit score can come down. But if your application gets
accepted, you start using your Credit Card regularly and repay on time, it can help improve your Credit Card.
Benefits of getting a pre-approved Credit Card
1. Perks like sign-in bonuses, reward points, discounts, or shopping vouchers if you receive a pre-approved Credit
Card offer.
2. Using a Credit Card responsibly can help you build a favourable credit score. You must pay your card bills on time
and keep your credit utilisation ratio low to achieve this.
3. Pre-approved Credit Cards usually have lower interest rates as a marketing strategy.
Also Read: Check
eligibility criteria for Credit Card application online
When Should You Get a Pre-Approved Credit Card?
- You should consider a pre-approved Credit Card when you have a good credit score, typically 750 or higher, as this increases your chances of approval.
- It is ideal when you need a fast application process since pre-approved offers speed up the procedure with minimal paperwork.
- Opt for it when familiar with your credit needs and spending habits, ensuring the card matches your financial goals.
- Pre-approved cards often come with attractive benefits if you are interested in special offers, such as rewards or cashback.
- Lastly, choose a pre-approved card if you want a higher credit limit, as these offers may come with better credit availability.
Difference between pre-approved vs pre-qualified Credit Cards
Pre-approved Credit Cards mean the issuer has already evaluated your financial history and determined your card eligibility. This often results in a quicker approval process with better terms. On the other hand, pre-qualified cards involve a less detailed evaluation, typically based on basic information like income or credit score. While pre-qualification indicates you meet initial criteria, approval is not guaranteed.
Pre-approved cards offer higher chances of approval, better terms, and usually higher credit limits than pre-qualified offers, which may be less personalised and subject to further assessment.
Summing up
Accept a pre-approved Credit Card offer only if you meet the eligibility criteria set by your bank such as age,
income, credit score and credit history. If your application is rejected later, your credit score can be negatively
impacted. When used responsibly, a Credit Card can do wonders for your credit score.
Have you received a similar offer from Axis Bank? Grab it by simply applying for an Axis Bank Credit Card to enjoy
exciting discounts, cashback, airport lounge access, travel or dining benefits, and more. You can choose the right
Credit Card type based on your unique needs and your eligibility.
Disclaimer: This article is for information purpose only. The views expressed in this
article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank
Ltd.
and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader
for
taking any financial decisions based on the contents and information. Please consult your financial advisor
before
making any financial decision.
