Warning: Pre-Approved Credit Card Terms Aren’t Guaranteed

Before you get your hopes up about a great pre-approved credit card offer you received in the mail, you should know those terms aren’t guaranteed. Once you apply for the credit card, you could receive a credit card with terms higher than what you applied for.

For example, you could be pre-approved for a credit card with a 0% introductory rate on balances or purchases for a certain period of time. Once you apply, the credit card issuer may instead offer you a credit card with a higher interest rate, perhaps one without a promotional rate, or a higher post-promotional rate than you were expecting.

It sounds like a bait-and-switch, but it’s not a scam. Credit card issuers prescreen consumers based on certain criteria, like a certain credit score or certain type of credit history. You may qualify for the credit card based on this preliminary screening. However, after you apply and the credit card issuer looks closely at your credit history, the credit card issuer may decide that you don’t qualify for the best terms.

If you don’t get the credit card terms you were expecting, you have two choices. You could accept the new credit card terms, which may not necessarily be a bad thing depending on the terms. Or, you could decide not to accept the new credit card.

Credit card issuers are required to send a free copy of your credit score whenever you’re approved for a credit card with less favorable terms than what you were initially offered. Along with this credit score, you’ll receive a list of the risk factors affecting your credit score. You can use this information to help improve your credit score so you can qualify for better credit card terms in the future.

Even when you’re approved for certain credit card interest rate or fees, your credit card terms may not always stay the same. Most credit cards now have variable interest rates which are tied to an underlying index rate. If that index moves upward, your credit card rate will soon follow. On the plus side, your interest rate can also drop if the index is lowered.

Receiving less favorable terms than what you were pre-approved for isn’t the worst that could happen. You could be turned down completely if you don’t meet the criteria at all. If your credit report history contributed to the credit card issuer’s decision, they’ll send instructions on ordering a free copy of the credit report that was used. Order this credit report to be sure the information on it is accurate. There’s a chance that a credit report error led to you being denied. Clearing up those types of inaccuracies can help you get approved in the future.