Pros And Cons Of Prescreened Credit Card Offers

It’s not uncommon to receive several prescreened credit card offers a month either by mail or email. These offers provide a way for credit card issuers to expand business and sell more products to customers they’ve already deemed eligible. Anyone can choose to ignore, accept or opt out of prescreened offers—it’s ultimately a company trying to sell you something. But if you do decide to take a look, you might find an offer worth considering.

What Are Prescreened Offers?

Prescreened credit card offers are advertisements sent directly to potential customers who qualify for competitive interest rates or benefits. Major U.S. credit bureaus (like Equifax, Transunion or Experian) are legally allowed to share a list of eligible individuals’ information with credit card issuers upon request. If a current cardholder meets the criteria based on their credit score or history, issuers will send a prescreened invitation that may offer perks or rewards not available to the general public.

How Do Prescreened Offers Work?

Prescreened offers often come unsolicited but card issuers must honor them if a customer accepts them. Card issuers come up with a series of minimum requirements (like a minimum credit score) a potential customer must meet to qualify for a product. Then the business requests from one of the major credit bureaus a list of people whose credit history meets those requirements. The issuer will then send out pre-screened card offers to eligible people as a marketing strategy, hoping to acquire new customers.

Potential customers must apply for a prescreened offer as they would if they found an offer on the issuer’s website. Issuers, once authorized, will perform a hard credit check. The company generally withholds the right to re-review a customer’s eligibility before approving him or her for the prescreened offer. Any major changes in credit history that may occur between the time the offer is made and the submitted application may lead the customer to be declined.

Pros and Cons of Prescreened Credit Card Offers

Prescreened offers can be a good way to find a better deal. But these pamphlets, envelopes and mailers are not always welcome in some mailboxes. Here’s a look at the pros and cons of prescreened credit card offers.

Pros

• Better rates or terms. Prescreened offers sometimes include more appealing interest rates, annual fees, sign up bonuses or rewards not available to the general market. Because card issuers are reaching out directly to eligible people, they may offer a more enticing set of terms.
• Soft inquiries that don’t affect credit. Card issuers conduct only a soft inquiry into someone’s credit history to determine whether they’re eligible, since they’re not authorized by the user to conduct a hard check. Soft inquiries don’t show up in credit reports like hard inquiries do. No matter how many prescreened offers are received, credit scores aren’t affected by the fact that a credit card company has your information.
• Easy comparison shopping. Receiving a few prescreened offers at a time allows eligible cardholders to comparison shop without wasting time and effort searching for the right card. Customers are not required to accept (or even respond) to prescreened offers, meaning you can pick one, apply for it and ignore the rest.
• Better chance of approval. Because potential customers are selected based on a set of predetermined criteria, there’s a much greater chance that an applicant will be accepted with the offer’s terms.

Cons

• Unsolicited mail. Prescreened offers are essentially unsolicited mail. Many are often referred to as junk mail. Constantly receiving credit card offers not only takes up space in the mailbox, but it also leads to wasteful use of materials and resources used in printing, delivering and disposing of unwanted mail.
• Potential for identity theft. Although prescreened offers are among the least common forms of identity theft, any mail that includes a person’s name and mailing address could potentially be stolen. But identity thieves usually need more personal information which prescreened offers don’t include.
• Data privacy concerns. Any list of personal information stored—and, especially, lists shared among agencies or companies—has the potential to be hacked or stolen. Data privacy violations of prescreened customer lists are a risk, but not likely to be common.

How To Opt out of Prescreened Credit Card Offers

Anyone can opt out of receiving prescreened offers for up to five years or permanently. There is an official website operated by major credit bureaus that centralizes the opt-out (and opt-in) process.

To opt out for five years, visit the website https://www.optoutprescreen.com. Submit an online request by providing personal information like name, Social Security number and date of birth.

To opt out permanently, a paper form must be signed and mailed in to confirm a permanent removal.

Requests are processed in about five days but it may take a few weeks to go into effect, especially if a person’s name has already been provided to card issuers who are preparing to send another round of prescreened offers.

Bottom Line

Prescreened offers are a marketing strategy for many credit card issuers. They can request the information of eligible customers from one of the major credit bureaus in the U.S. Prescreened offers allow potential customers to comparison shop and take advantage of rewards or benefits that may not be available to the general public. Anyone can opt out of receiving prescreened offers by visiting https://www.optoutprescreen.com and completing the instructions listed there.