Are ‘Pre-Approved’ UK Credit Cards A Scam?
Appropriately know as ‘junk’ mail, every now and then you may find a nice glossy letter on your door-mat informing you that you have just been pre-approved a UK credit card. With your pulse racing, you start to believe then hype of what a wonderful customer you are and how much your custom is valued. Hold on tiger – you may well be falling for one of the biggest credit card scams going!
No such thing as pre-approved
First of all, it should be made clear to you that this almost no such thing as being ‘pre-approved’ a credit card. In the event that the pre-approved credit card application has been sent to you from a UK credit card provider with whom you have no association, then it is almost certain that the card is anything but pre-approved!
What you need to understand is that as with any credit card application a pre-approved credit card needs to be credit scored. In order to do a credit score a check on your personal and residential information needs to be done. However, without your express consent, no UK credit card provider can do such a check.
So, how is it pre-approved?
You may now be wondering how it is that you have received this wonderful letter telling you that you have been pre-approved a UK credit card. The answer is simple. On the one hand, you may already have an existing relationship with the UK credit card provider and the credit card company has decided that you are a worthy enough risk to send a pre-approved application to.
On the other hand, if you do not have an existing relationship with the UK credit card issuer, it is likely that your postal address is one that statistically works out nicely on the national databases. Either way, if you read the small print you’ll likely find a clause that states your pre-approved credit card application is subject to the UK credit card issuer’s final authorization. In other words, it is anything but a pre-approved card.
The benefits
Another factor you need to look closely at with pre-approved credit cards is that the offer being made to you is not commercial competitive. In short, you could probably walk into any high street bank and get a better offer from another UK credit card company. Consequently, your pre-approved credit card is a pre-approved card the terms and conditions of which you would very likely not have accepted had the card been advertised in the normal market.
However, the UK credit card issuer who has sent you the pre-approved credit card application has done so in the hope that you fall for the rush of feeling superior and important and that you’ll agree to sign up and become a member of a UK credit card that offers uncompetitive terms and, likely, higher than average rates of interest with lower credit card limits.
In sum, if you believe that you really have been offered a pre-approved UK credit card, there’s a very good chance you have just fallen for one of the best scams that UK credit card companies have. So make sure you take the time to read the pre-approved credit card application carefully.
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