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credit cards faq/glossary
The most common questions asked about Credits Cards.
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Credit Card Glossary
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Pre-approved
definition
What does pre-approved mean?

The pre-approved credit card offers are basically a type of marketing relating aspect (advertising). Credit card issuers (banking institutions) may send you invitations to take up a good offer. Especially if you have a very good credit scoring, you will often receive such invitations.

How the issuers implement this sort of advertising is very simple: of course they would like to have trustworthy clients taking up loans, so who could be more fit than an individual with good credit scoring? Issuers ask for lists of individuals with a certain fair-to-very good credit scoring from one of the credit bureaus such as Equifax for example. But it may happen the other way round as well, meaning the issuer will look to find a bad credit holder fit for his “promotional offer”, because a bad credit holder is unlikely to get too many offers, so he/she will accept to enter the deal even if the interest rates charged hit the ceiling.

There are generally two types of such pre-approved cards: the secured pre-approved credit cards and the unsecured pre-approved ones. Of course you will be invited to sign up for the secured type if your income budget is low and you are a potential risk to the issuer, and need to make a certain deposit as collateral. On the other hand if you are financially doing very well having a higher than average stable income, you will be invited to join the unsecured pre-approved credit type.
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