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One way to save a little time and stress when applying for a credit card — and, most notably, protect your credit score — can be to look for companies that offer credit card preapproval. You still won’t know for sure that you’ll actually receive the card until you formally apply. But with this prescreening process, which uses a soft credit pull that won’t affect your credit, you may get a better idea of whether you’ll qualify for the card you’re considering. This can be a major relief, considering that simply applying for a card can trigger a hard credit inquiry that could temporarily drop your credit score.
That’s not great even if you get the card, but it can be especially frustrating if your application is denied. Read on to learn about the companies that offer preapproval for credit cards.
Related: Credit card late payment consequences
What Is Credit Card Preapproval?
Credit card preapproval generally means that, based on some limited personal and financial information, a credit card company has decided a consumer is likely to be approved for one or more of its cards. It’s important to remember, though, that making it through this initial prescreening process doesn’t mean you’ll automatically get the card you want. You’ll still have to apply for the card, undergo a hard credit check (which will affect your credit score) and wait to hear back about your final approval.
Preapproval credit card offers aren’t hard to find. If you have a particular credit card or credit card company you’re interested in, you may be able to go directly to the card issuer’s website to see if there are any preapproved cards listed that match your needs. (Not all issuers make preapproval offers available online, but it doesn’t take long to look.)
Consumers who want to check out multiple opportunities can use a credit card comparison website to find their best fit. These sites will help you evaluate the pros and cons of a variety of cards from several card companies all in one place.
Some credit card companies also send out specific offers by direct mail to consumers who appear to meet the criteria they are looking for based on data provided by a partnering credit bureau.
Credit card preapprovals have benefits for both the card companies and consumers. Card issuers can target people who might be interested in opening an account if they know a special offer is available to them and they’re likely to get the card if they apply. And consumers can shop around for just the right card without damaging their credit score by making multiple applications in a short period of time.
How Can Applying for a Credit Card Affect Credit Score?
When you apply for a new credit card, you can expect the company issuing the card to evaluate your credit report to determine if you’re a credit risk. And that credit check — called a hard inquiry or hard pull — can temporarily lower your credit score.
New credit makes up 10% of a FICO credit score, so if you apply for a number of credit cards within a short period of time, your score could take a hit. But if you apply for just one card, the drop may not be much, especially if you have a reasonably long and strong credit history. (FICO says its model typically docks scores by fewer than five points.)
A hard inquiry may remain on your credit report for up to two years. However, if you manage your debt responsibly, your credit scores could recover within a few months. Because preapproval doesn’t require a hard credit pull, you can shop for a card that suits both your needs and your credit score without formally applying, eliminating the need for multiple hard inquiries and their effects on your credit score.
5 Companies That Offer Preapproved Credit Cards
You may have received an offer in the mail for a specific credit card — and only that card — in the past. But there are also companies that may have more than one card that’s a good match for you. To find those cards, you generally can go to a company’s website, look for an online prequalification tool and enter some basic information (usually your name, income, employment status and at least the last four digits of your Social Security number). You can then quickly see the cards that particular issuer says you’re preapproved for.
Once you’ve gathered that information, you may want to do some follow-up research, including a check to ensure you’re clear on the details of any offers that interest you. You also may want to look at other issuers’ sites, or a comparison site, to be sure you’re getting the best offer for your circumstances. (Keep in mind that each credit card company’s preapproved cards may change periodically — and you may have a limited amount of time to take advantage of a particular offer.) The preapproval process may vary from one credit card issuer to the next. Here are five companies that offer preapproved credit cards designed to meet a diverse range of customer needs.
1. Capital One
Capital One has a prequalification tool that considers a user’s eligibility for several of its cards, including the QuicksilverOne Rewards card, Capital One Platinum card, Quicksilver Rewards for Good Credit card and the Platinum Secured card. So, if you’re trying to build your credit, or if you’re looking for a card with rewards, you may find one that fits your goals. Be prepared, though, to provide a bit more info than is required by some other sites even though this is just a preapproval page. You’ll have to give the following details:
- Phone number
- Email address
- Full Social Security number (not just the last four digits)
- Annual income
- Amount of your monthly rent or house payment
- Employment status
- Types of bank accounts you currently have (account numbers not required)
2. American Express
American Express lets non-Amex members see if they’re eligible for prequalified offers on several cards, including the Blue Cash Preferred Card from American Express and The Platinum Card from American Express. And, based on your credit reports, you also might qualify for more personalized offers.
American Express cards are known for their perks, from spending bonuses to presale ticket access to sports and other events. But they aren’t necessarily easy to get. You may have to wait until your credit score is at least in the good range (for a FICO Score, that’s 670 to 739) to be eligible for a preapproval offer or, ultimately, to receive approval for a higher-level card. You can find out what’s available to you by entering the following information in the easy-to-use online prequalification tool:
- Your name
- Address
- Last four digits of your Social Security number
- Income
3. Discover
Discover also uses a prequalification tool to match consumers with a range of cards — including the Discover it Secured Credit Card for borrowers who want to earn rewards while building or rebuilding their credit, and the Discover it Miles Credit card for travelers with fair to good credit. You’ll have to answer several questions to find your matches, including:
- Name
- Address
- If you’re a student
- Gross income
- Housing status and monthly payment
- Date of birth
- Full Social Security number
- What type of card benefit you’re seeking
4. Credit One Bank
Credit One Bank offers several different types of preapproved credit cards, with varying rewards and interest rates, including the Platinum Rewards Visa for those with average to excellent credit and the Credit One Bank Wander Card, which may appeal to frequent travelers. You can use a prequalification tool to research Credit One’s current preapproval offers. Or you may want to start with the site’s “Choosing a Credit Card” page, which allows you to read about the perks and costs of various cards based on your “excellent,” “average,” or “rebuilding” credit status. (Yes, there are filters!) You also can read reviews. If you see something you like, you can click through to the “Prequalify for a Credit Card” page.
5. Petal
Petal offers two cards — the Petal 1 and Petal 2 — and both are designed to help users build their credit. You can get details about each, and preapproval for one or maybe both without impacting your credit score, through the Petal website. To get started, you’ll need to enter the following:
- Name
- Birthday
- Phone number
- Social Security number or individual tax identification number
Choosing a Credit Card
It’s OK to be picky about the credit card or cards you keep in your wallet. Knowing what kind of rewards a card offers is important, but so is finding the right annual percentage rate (APR), low or no fees, and other benefits. It’s also helpful to find a card that works for your spending style — especially if you’re trying to build or rebuild your credit. Here are a few things to consider as you’re selecting a credit card that’s right for your needs and goals.
1. Check Your Credit
It’s possible your credit isn’t as bad — or as good — as you think. It’s not a bad idea to check on your status once in a while. (Note that checking on your credit yourself won’t damage your credit score.) You can get free copies of your credit reports once a year from each of the three major credit bureaus through AnnualCreditReport.com, the only government-authorized site for free reports. This will give you an idea of what credit card issuers will see when they look into your creditworthiness as well as what can affect your credit score.
You also may be able to find your credit score on one of your credit card statements or through your financial institution’s app or website. If necessary, you can then work on improving your credit. And if there are any errors on your credit reports, you can take steps to fix them.
2. Be Clear on What You Want and Need
Are you looking for cash-back rewards, miles or points? Or are you more interested in getting the lowest APR possible so you can save on interest? If you’re hoping to rebuild your credit after a rough patch, you may need a secured credit card, which uses a refundable security deposit as collateral while you show the issuer you aren’t a risk. It may help to start your credit card research with a prioritized list of what you want. Then, as you go, you can compare how various preapproval credit cards match up with your list.
3. Balance the Perks and the Price
Think about how you’ll use your new card and measure the benefits against the costs. (It helps to be clear on how credit cards work, in general, so you can better assess the pros and cons of each card.) If you expect to carry a balance from month to month, for example, you might find a low APR is more valuable than a rewards program you may or may not be able to use. And before you get too excited about high-end perks like advance access to ticket sales, consider whether it’s worth any extra fees you may have to pay.
4. Read the Fine Print
Before formally applying for the credit card you think is “the one,” it’s a good idea to read the fine print and look up any credit card jargon you don’t understand. Some things to look for include:
- How is the APR determined, and what might make it go up? If it’s an introductory APR, how long will the rate last?
- What is the penalty if you’re late with or miss a payment?
- What is the process for redeeming rewards?
The Takeaway
It doesn’t cost anything to look at preapproval credit card offers, and you may even find better perks or a lower APR than you expected. Plus, you won’t have to worry about dinging your credit score even a little until you actually apply for the card you want. Keep in mind that an applicant may receive a preapproval offer and still be turned down when applying for a credit card. But the preapproval process, which uses a soft credit inquiry that doesn’t have any effect on credit scores, may be useful when you’re shopping for the best credit card perks and terms. And it can help show which card or cards you have the best odds of actually receiving if you do decide to apply.
One way to simplify your search and get a broad picture of which preapproved credit cards might match your needs is to use a comparison site like Lantern, which allows you to evaluate offers for different types of cards, at varying credit levels, and from several card issuers.
Learn more:
This article originally appeared on LanternCredit.com and was syndicated by MediaFeed.org.
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4 tips for paying off a large credit card bill
You know which three little words no one wants to hear? Credit card debt. It can go from zero to thousands with one quick swipe or build at a slow creep — a nice dinner here, a trip to the mall there, a gas fill-up to get you through until payday — and before you know it, you could be staring at a credit card balance that’s a lot higher than you thought it was.
For Alicia Hintz, the debt creep started in 2016 with a large and unexpected loss of income — the day before she and her husband were to leave on their honeymoon (thanks, universe).
Prior to that, they’d been toying with the idea of selling their Minneapolis home and moving closer to family in Wisconsin. The income reduction sealed the deal. But their house needed some work to be market-ready. The total bill was more than their savings, and their income wasn’t enough to pay in cash, so to the plastic they went.
For them the improvements were worth the investment — in that they sold their house for more than they paid for it, but almost every penny of it went toward fees, commissions, closing costs and other expenses.
Alicia’s financial journey is likely to resonate with the 41.2% of American households that carry an average of about $9,300 in credit card debt, according to data reported by the Federal Reserve for Outstanding Revolving Debt. The statistics are sobering to be sure, but here’s a spoiler alert — thanks to some smart planning and a lot of stick-to-it-iveness, Alicia’s story ends on a high note.
Damir Khabirov / istockphoto
Fast forward a few months and Alicia and her husband live in Wisconsin but on a much-reduced budget. In fact, it would be six more months before they were able to get their finances back up and running — that’s a lot of time for savings to shrink and debt to grow.
DepositPhotos.com
To try and combat the loss of income, Alicia opened a 0% interest (also known as a deferred interest) credit card with plans to pay it off within the year. “Before I opened that card, I had always paid off my credit card balance each month in full,” she said in a written interview with SoFi.
But, as is life, things didn’t go as planned. “The first month I didn’t pay off my full balance made me panic,” said Hintz. And on top of day-to-day financial challenges, the couple was invited to a destination wedding in the summer of 2017. In order to get the discounted room rate, they had to pay upfront for the flight and resort close to $5,000.
“That extra money added to our credit card debt was a steep mountain to climb,” Hintz said. “After we had to pay that, I knew it would be years to get everything paid off.”
A 0% interest promotional period on a new credit card can last as long as 18 billing cycles, which could be a long enough time to make a large dent in the card’s principal balance.
But once the promo period expires, the interest rate can climb to as much as 27% (or higher). A credit card interest calculator can give you an idea of how much that rate will affect your total balance, and it’s important to consider whether you can achieve your payoff goal before the rate rises.
Deposit Photos
Tackling a large credit card bill isn’t likely to be easy, so an important part of the process could be a hard look at what putting extra money toward credit card bills means for the rest of your budget.
One way to approach a solid debt-payoff plan is to begin with an organized budget. You can start by taking a look at the big picture, including all of your monthly expenses as they currently stand, all of your income and all of your debt.
Your next step might be to focus on your spending. You may see obvious areas where you can cut back, or see if you can get creative to come up with some extra cash flow each month.
“We definitely tried to eat out less and cut back on shopping for clothes,” Hintz said. “But it seemed like every month there were more unexpected expenses that needed to be put on the credit card.”
From there, you can start to focus on a plan that makes credit card payments as equally important as the electric bill. And while you may not be able to pay more than the minimum on all your cards, it’s important to ensure that you pay at least that much if you want to avoid accumulating additional debt.
That’s because, while paying only the minimum can lead to compounded interest rates and larger overall balance over time, skipping payments can also lead to higher penalty interest rates, late payment fees and can even affect your credit.
DepositPhotos.com
The snowball and avalanche debt repayment strategies take slightly different approaches to pay down debt, and both involve maintaining the minimum payment on all but one card.
The debt snowball method focuses on the debt with the lowest balance first, regardless of interest rate, putting extra toward that payment each month until it’s paid off.
Then, that entire monthly payment is added to the next payment — on top of the minimum you were already paying. Rinse and repeat with the next card, and it’s easy to see how this method can quickly get the (snow)ball rolling.
The debt avalanche is based on the same philosophy but targets the highest-interest payment first. Getting out from under the highest debt can save a lot of money in the long run, and just like the snowball method, applying that entire payment to the next-highest-interest debt can lead to quick results.
The third snow-related strategy, the debt snowflake, emphasizes putting every extra scrap of cash toward debt repayment. This method played an active role in Alicia’s debt-elimination strategy. “If you have extra money to throw at your loans, even $20, that can still make a difference in your overall amount owed,” she said.
SeaHorseTwo / istockphoto
As Hintz’s credit card utilization went up, her credit score went down. She decided to research her options and was ultimately approved for a credit card consolidation loan at a considerably lower interest rate than her credit cards, which along with making extra payments, helped save her money in the long run.
Now facing one personal loan payment vs. multiple credit card bills, Hintz anticipated being able to pay down the debt sooner than the three-year term she selected. And once again, life happened.
Over the course of those years, her husband took a new job, and they both changed cars, bought a house and had a baby. They also went to two more destination weddings. This time, though, the extra expenses didn’t derail the plan.
“The loan was paid off within two years,” she said, thanks in part to a conservative budget and using an annual work bonus as a snowflake to make a dent in the balance.
istockphoto/demaerre
One of the biggest things to remember, Hintz said, is that debt elimination doesn’t happen overnight. “Paying off debt is hard work,” she said. “Take it one month at a time. Some months are easier on your wallet, and others are not — looking at you, December!”
She suggested using the time you’re working to pay off debt to develop good budgeting and spending habits so that your post-debt finances are about saving, not spending.
And another tip from Hintz? Celebrate even the little victories. “When I paid off half my loan, I celebrated by taking a nice long bath,” she said.
When they reached zero balance, she and her husband went out for ice cream. “You can celebrate by going to the park with your kids, reading an extra chapter in a book, or finding a new series to watch,” she said. “Always celebrate your loan payoffs, no matter how small!”
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This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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