If you get a credit card offer in the mail, it means that the issuer has reviewed your information and thinks you meet their approval criteria. It also indicates that the company has received your data from one of the three nationwide credit reporting agencies.
Many credit cards provide rewards, benefits and perks that can make them appealing to consumers. These include 0% interest introductory offers on purchases.
Sign-up bonuses
Credit card issuers offer sign-up bonuses as an incentive for consumers to open a new credit card. These offers are usually based on spending requirements and can be in the form of rewards points, cash back or airline miles. However, it’s important to consider how you’ll use a credit card before signing up for one. For example, if you’re prone to overspending, a large sign-up bonus could lead to a balance that accrues interest.
Typically, the sign-up bonuses offered by credit cards are only available for a limited time. If you want to earn the bonus, make sure to meet the spending requirements before the promotional period expires. Also, be aware of credit card issuers’ policies, such as Chase’s 5/24 rule and American Express’ once-in-a-lifetime limit on welcome bonuses.
In addition to signing-up bonuses, some cards offer other benefits such as cellphone and purchase protection, primary car insurance, and travel reimbursements. These perks may offset the costs of a card’s annual fee and other charges.
High available credit
If you have excellent credit, a credit card with high available credit limits can be an effective tool to increase your spending power. However, you need to know how much is too much. Too much available credit can hurt your credit scores if you spend more than your limit. It may also impact your credit utilization ratio.
If your card balances are close to or exceeding your credit limit, it may be time to ask for a limit increase. This can help improve your credit utilization ratio and boost your credit score. But before you do this, be sure to pay down your balances and keep your credit utilization ratio low.
Credit cards with high credit limits can be great tools for building your credit, but you should always pay off your balances on time and in full. Using an online card pre-approval tool that doesn’t affect your credit will give you a good idea of what kind of limit you might receive.
Promotional offers
While sifting through a pile of credit card offers can be exhilarating, it’s important to take the time to look at each one carefully. The terms of the card, fees and interest rate vary widely, so it’s important to compare offers before applying for one.
Some credit card offers come with sign-up bonuses or rewards such as cash back, free gift cards or frequent-flyer miles. These types of promotions can seem tempting, but they might not make sense for people who don’t pay off their balances in full each month. In addition, credit card issuers are required to state when the introductory or teaser rate ends and the cardholder will be charged the regular interest rate.
Other credit card offers may be referred to as pre-approved or pre-screened, but these are not the same as a firm offer. A pre-approved offer is based on the lender’s review of your credit history. These inquiries are called hard inquiries, and they affect your credit scores and remain on your reports for two years.
Pre-approved offers
Credit card issuers often send pre-approved offers. These differ from prequalification offers because they typically indicate the card issuer has already determined that you meet basic requirements, such as a certain credit score and other details about your financial profile. While pre-approved credit card offers are not a guarantee that you will receive the credit card, they do give you an idea of your odds.
When a card issuer conducts a pre-screen of your credit, it usually does so via a soft inquiry. A soft inquiry does not affect your credit scores, but a full application for the card would result in a hard inquiry that can impact your scores. Regardless of whether you are approved for a credit card, the best way to build your credit score is to responsibly use the card and pay off the balance each month. In addition, credit bureaus like to see a mix of credit products in your credit history.
