I'm preapproved for that credit card. Whoopee! Right?

Assorted credit cards

You know all those tempting preapproved offers you get in the mail that promise great introductory interest rates, lucrative balance transfer terms or over-the-top reward programs?

Before signing up for a credit card that solicits your business via a preapproval, you should know that what you see isn't necessarily what you get.

Does the preapproval really mean you qualify for a new card?

Not necessarily.

How did you get preapproved in the first place?

Credit card companies can buy your name from another company’s application you previously filled out. So if you’ve applied for one Citibank card, you may receive an offer for another.

Depending on where the information about you comes from, preapprovals are often nothing more than junk mail, or solicitations. They’re not guarantees that a credit application has been -- or will be -- approved. And you still need to officially apply for a card and have your credit worthiness evaluated.

Then there’s the matter of your credit score.

If you know your credit score isn’t all that hot, or even if it’s average, and you receive a preapproval for a card, keep in mind that card is likely a secured card, so you’re going to be expected to plunk down a deposit to start your line of credit.

You’re probably also going to be paying a higher interest rate than what you’d pay on a traditional card, too. Which means a credit card that comes calling might not be all it’s cracked up to be.

Seemingly good deals call on the mailboxes of those with good – or great – credit scores, too. And just because those offers usually bear appealing interest rates, that’s no reason to jump at the first preapproval that shows up.

There are scores of pocket-friendly credit cards on the market so be sure to shop around for comparable deals before committing. For example, you can compare credit card offers from our extensive database.

Or contact the issuer of the pre-approval to check out other offers. You might be able to land an even better rate with the card issuer than the one offered in the preapproval.

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