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Preselected means ‘please apply’

By Janna Herron · Bankrate.com
Monday, September 10, 2012
Posted: 4 pm ET

Just last week, I was "preselected" to receive a very exclusive credit card from Barclays Bank. The invite reminded me of an important lesson with credit card offers: They're not as accepting as they seem.

The mailing for the Visa Black Card -- a credit card so upscale that it's made of carbon and comes with a hefty annual fee of $495 -- promises "luxury gifts from the world's top brands" and "unlimited VIP airport lounge visits," among other premium perks. This card is "guaranteed to get you noticed," the invitation vows.

All I have to do to accept -- the actual word used in the mailing -- the offer is fill out and mail back the acceptance form. They've even paid the postage. However, there is also a little, superscripted No. 1 after the word "accept." Looking at the bottom of the page for explanation, the invite tells me to see the application and terms and conditions for details.

On the bottom of the "Black Card Acceptance Form," (italics mine) in the middle of a paragraph in tiny font, I find the big caveat: "Offer subject to credit approval."

The "acceptance form" is really a plain-Jane "application form." The mailing didn't fool me, but I wonder how many people are fooled. They fill out the form, mail it back, and expect to receive an exclusive carbon credit card in a week. Instead, the bank pulls their credit report -- which dents their credit score -- and then determines if they get a card. If they don't qualify, then their credit score just took a hit, and they have nothing to show for it.

Of course, it's important to note that these mailings usually prescreen consumers before sending out applications. This means they do check your credit, but not in a way that harms your score, to make sure you're reasonably likely to qualify for the card. But you still have to apply.

"If you are truly preapproved, you will get something," says Joe Ridout, manager of consumer services at watchdog group Consumer Action. "If you're preselected, or get an invitation to apply, it's a less-certain outcome."

Your application will not just determine if you get the card, but it will also set your credit limit and interest rate, Ridout says.

So, don't be swayed by sleek marketing material and flattering language. It's better for you to look for a new credit card based on your financial lifestyle, rather than passively accepting an application that comes in the mail.

And for those of you who don't want to receive prescreened offers of credit, you can opt out of receiving them for five years at OptOutPrescreen.com. You can begin the process of opting out permanently at that site, but you will have to return a signed form to complete the process.

What kind of prescreened offers are you getting? Do you find them misleading?

Follow me on Twitter: @JannaHerron

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