Credit card companies frequently send out pre-approved offers of credit. These offers usually come in the form of a mail solicitation that promises benefits like 0% teaser rates, cash-back rewards, frequent flyer miles, and more. Although it might sound like a good deal, there are several things you need to know before you sign up for that card. - Annual percentage rates (APRs) — many pre-approved offers come with a low teaser APR. This rate is likely to increase significantly after the introductory period.
- Fees — be aware of any fees associated with pre-approved credit card offers. Many of these cards include fees such as annual fees and balance transfer fees.
- Unnecessary services — some cards will charge you a fee for services, such as credit insurance, that offer you little or no benefit.
- Pre-printed checks — some offers include preprinted checks. If you choose to use any of the checks, it automatically opens the credit account and means you accept all of the terms and conditions of the card.
The Fine Print
Protect yourself by reading the fine print in the pre-approved offer. If the terms of the offer are not clear, look for a credit card from another company.