Credit card offers aren’t exactly a rare occurrence. In fact, many people are bombarded by multiple credit card offers each and every day. The question is, how do you know which credit card offers are the good ones and which ones should be thrown in the trash (after being shredded of course)? Follow these seven bits of advice.
1. What Does “Pre-Qualified” Really Mean?
First things first — when you get those credit card offers in the mail that say you’re “pre-qualified,” it does not mean that you’ve been approved for the credit card that is being offered. You still have to apply for the card (and have your credit history run) before you’ll actually be approved.
Many people have gotten frustrated because they respond to a “pre-qualified” offer only to find out they’re not really approved.
Don’t take it personally. “Pre-qualified” credit card offers are nothing more than a marketing gimmick.
2. The Razzle, The Dazzle and Then The Punch
When you see credit card offers touting very low interest rates (or even no interest at all), try to remember that these are “teaser” rates that will eventually go up (and may go up drastically). The credit card offer may still be a good deal, but that all really depends on what the interest goes up to after the introductory period.
Before jumping to apply for a low-interest credit card offer, see what the interest rate is really going to be after the introductory period is over.
3. Keep The Perks In Perspective
Many credit card offers include perks such as points or cash back that can be earned with each purchase. Remember, these perks may not be as great as they first appear.
A credit card with rewards attached also usually has a higher interest rate attached as well. If you carry a high balance on your credit cards, those perks are going to cost you big time.
4. It’s Not About the Prize
Some of the credit card offers we receive don’t even come by mail — they come during checkout at the local store. Oftentimes, these credit card offers have a one-time discount attached, such as 10 to 15 percent off your total purchase if you apply on the spot (and approval is instant as well).
If you think it’s a good idea to open a credit card to get the discount and then close the account afterwards, that’s really not such a great concept. A part of your credit score is determined by how long you keep relationships with your creditors. If you have a history of opening accounts and then quickly closing them, it’s going to impact your creditworthiness in the eyes of lenders.
5. What You Shouldn’t Settle For
The credit card industry is definitely competitive. Because of this, you should never respond to credit card offers that require an annual fee or a “processing” fee (unless you have problems with your credit history).
If a credit card company requires an annual fee or charges you for processing your application, go elsewhere for your credit card needs. There are a number of credit card companies who will welcome your business (and won’t make you pay extra for the privilege).
6. Seek Them Out
If you’re not happy with the credit card offers you’re being solicited with, it doesn’t mean there isn’t a credit card out there to meet your needs. You may just need to look a little harder.
