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Preapproved credit cards
Misleading “Preapproved credit
card” offers
You have probably seen these offers, telling
you that you are” Pre-Approved” for
a credit card. The average household received
6 of these per month in 2005. Don't be fooled,
however, "Pre-approved" doesn't mean
you're really approved. It's deliberately misleading
for consumers in order to get you to apply for
their card. Preapproved simply means you've passed
the first prescreening. There is no guarantee
that you will get a card. Generally the company
will take your application and conduct another
approval process to determine if they will give
you a card. After this approval process you are
either given a card, turned down, or you may be
offered a card with different terms.
What to do with pre-approved credit card
offers.
- Read the fine print thoroughly. Follow the
asterisks, which lead you to the bottom of the
page where exceptions to the terms are outlined
in teeny-tiny print.
- If there are terms you don't understand,
call the 800 number and ask the issuer to explain.
• Look for the expiration date on an offer
with an introductory interest rate.
• Look for an application deadline. Most
offers are good for a limited time.
Get a copy of your credit report before applying
for a card.
How to Stop Receiving Credit Card Offers
If you’re tired of receiving preapproved
credit-card offers, there is a way to reduce the
mailbox clutter: Thanks to the Fair Credit Reporting
Act, consumers can opt out of prescreened credit
offers by calling 1-888-5-OPTOUT or by visiting
www.optoutprescreen.com.
Opting out won't eliminate all preapproved credit
offers, but it can reduce the number of offer
you will receive. Whether you opt out or not,
it is important to shred or destroy any preapproved
offers before throwing them away to prevent identity
thieves from applying for credit in your name.
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