Guide to credit card offers: The meaning of 'pre-approved' – and other mysteries

As the glow of the holidays gives way to the glare of all those credit card bills, you may start to notice zero-percent transfer offers flooding your mailbox. And what offers! You have been "pre-approved," "pre-screened," "pre-qualified," or "pre-selected" to receive a credit card that's not offered to just anyone. It looks like a great deal. Should you apply? Here is a guide to sorting through credit-card offers:

1. If the credit-card offer says 'pre-approved,' are you approved?

Nick Ut/AP/File
Credit-card decals adorn a window of a wig shop in the Hollywood section of Los Angeles in this 2007 file photo. Credit-card offers that say you're 'pre-screened' or 'pre-approved' don't guarantee that you'll get the card – or that it's the best card for you.

The terms that sound like you’re already been screened and approved should not be taken literally. They're marketing language. They come with a standard application and do not constitute any type of actual pre-approval.

Credit-card offers that say you're pre-approved, pre-screened, pre-qualified, pre-selected – or any other “pre,” for that matter – are known as "invitation to apply" (ITA) offers. They mean that whoever made the offer – a bank, retail store, or other lender – has done a background check that might include your credit score, borrowing history, and any other personal information available to them. The bank or credit card company may have purchased a list from one of the credit bureaus that fits the criteria for people they are targeting. With that information, they decide if you meet their criteria for credit.

Because they already evaluated you, chances are you will qualify for that offer. But credit laws require the card issuer to assess your ability to pay before approving you for a card. And you have just as much chance of qualifying for hundreds of other credit cards you can find online through credit-card comparison websites like mine. The best online offers frequently represent a better deal than what you get in the mail.

So if you are interested in the card, look beyond the marketing terms and assess the terms of the credit-card offer.

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