Occasionally, you might get a credit card offer in the mail. Most of the time, you might consider it junk mail. However, every once in a while, you get a pre-approved credit card offer that seems like a good idea to accept. You might even get a credit card upgrade offer from your bank where they waive the first year’s fee if you accept. Read this blog to know should i accept a re-approved credit card offer or not?
Is it a good idea to accept a pre-approved credit card offer? Let’s discuss.
Is It A Good Idea To Accept A Pre-Approved Credit Card Offer?
Pre-approved credit card offers get a little bit of a bad rep. Once you turn 18, your mailbox starts to flood with pre-approved credit cards with low limits, mostly from companies like Capital One. The general advice is to throw them away.
But why should you throw away a pre-approved credit card offer? The answer is not because they’re scams. Pre-approved credit cards aren’t scams. The reason is because you can generally get a better deal than the one they’re offering you.
If you’re a college student, you’re likely to get flooded with offers for student banking and credit cards made for students. Generally you can get a better offer by calling the bank and having your parent or guardian co-sign for you.
Sometimes, though, you get an offer in the mail that looks really, really good. In this case, should you accept the offer?
Questions To Ask Before Accepting A Pre-Approved Credit Card Offer
Will You Use The Card?
This is the most important question to ask before accepting an offer. Is it a card that you will actually use? More importantly, will you be willing to pay the balance off every month?
You’ll want to use the card if it provides good benefits, such as points or cash back. If it provides a higher limit than the card you’re currently using, it may be an attractive card to use. Otherwise, you will need to find a reason to use the card at all.
If you can’t think of a reason why you would use the card, don’t accept the offer.
Check The Fees
If you think you would use the card, you want to make sure that the benefits of using the card exceeds the cost. Annual fees and other charges are a big part of this. You might have been automatically pre-approved for a card that gives a lot of points, cash back, or airline “miles”. That’s all well and good, but what does it cost? Some cards have enormous fees that make the card not worth using for most people.
Do the math. Consider how much you spend on your credit card in a typical year. Do the rewards gained from the card exceed the fees you’d have to pay? If so, then it might be a good choice.
Many cards waive the first year’s fee in order to tempt you to use it. Don’t be swayed by this: in general, you NEVER want to cancel cards as that removes available credit and lowers your average age of accounts, both of which will hurt your credit score! Knowing this, you may be forced to make a choice between saving money or keeping your credit score high.