Pre Approved Credit Cards – Avoid the Traps, Get the Facts

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So you are interested in a pre approved credit card are you? Let us first examine exactly what constitutes a pre-approved offer. It must be said that unsecured credit cards are in fact not preapproved.

If you should ever find a solicitation where a claim is made that an unsecured card is guaranteed you will now know it is some sort of scam so stay away from it. Banks and financial institutions simply do not hand out credit without first thoroughly checking the credit-worthiness of the person or business that applies.

That would be an absolute recipe for disaster. In a way that sort of did happen a few years ago when banks were giving out cards to just about anyone that had a pulse. Bank of America even went so far as to approve cars for illegal aliens.

We all know how hard that came back to bite these irresponsible issuers and the fallout remains as the banks and financial institutions continue to reel from record high default rates. In fact, it looks as though it may be many years before they fully recover.

These are the very same institutions that took billions and billions of taxpayer dollars as a bailout to keep them in business. Their poor judgment and granting of credit to unqualified individuals with subprime credit ratings is a big reason that the economy is in such poor shape today. This applies to mortgages as well as credit cards.

Having said that, there most certainly are pre-approved offers available and they come in the form of secured credit cards. These types of offers cater primarily to people with moderate to severe credit rating issues.

Their primary function is to allow this niche of consumers the opportunity to repair and rebuild their credit rating. Having a strong credit history is incredibly important in our society because it allows an individual to receive favorable terms for such things as car loans and mortgages.

Without at least a respectable credit score many people will either only be offered terms that come with very high interest rates, or will be denied credit altogether. In some cases a poor credit rating will even affect an individual's job prospects.

There are indeed some fine pre approved credit cards available on the market. Visiting a reputable comparison website will allow you to compare the various features and benefits. It is also vitally important to read the terms and conditions associated with an offer before you apply.

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Source by Morgan Hamilton

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