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This is how credit card companies select you for special offers

Select spoke with an expert who explains what makes someone a good candidate for 0% APR offers and when to expect a preapproval offer in the mail.

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The Chase Freedom® is not currently available to new cardholders. Please visit our list of the best cash-back cards for alternative options.

You've probably received special preapproved credit card offers in the mail from your card issuer or other companies. Sometimes you might toss them in junk mail pile to be quickly recycled. Other times they land in your mailbox at just the right time, whether you're looking for a balance transfer offer or hoping to earn extra rewards by taking advantage of a welcome bonus.

You might assume that having a high credit score is the only factor in determining whether you get picked for a preapproved offer, but as it turns out, there are a few other considerations that could impact whether you're selected.

We spoke to Shanté Nicole Harris of Financial Common Cents, a financial educator and certified credit consultant. Harris explains what makes someone a good candidate for these offers and when you might be able to expect a preapproval in the mail.

How card issuers select you for preapproved offers

Credit card companies purchase lists of consumer names and credit history information from the credit bureaus. If you have a credit report that shows some history of having credit cards, mortgages or other loans, then your name is likely included on a few of these lists. 

It's impossible to predict exactly when your information will show up on a list, but just because a card issuer gets your information does not mean you will necessarily be selected for an offer. Card issuers look at your credit score along with other factors like your debt-to-income ratio, your total annual income, how many credit inquiries you've had in the past year and your payment history.

Some offers are only available if you've never had a card with that issuer before, while others give preference to current customers who might want to upgrade to a rewards cards.

For example, if you have the Chase Freedom® card and consistently make your payments on time, you might be preselected to apply for the Chase Sapphire Preferred® Card, which has a $95 annual fee. The card has a welcome bonus of 75,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's over $900 when you redeem through Chase Travel℠.

Meanwhile, if you already have a Chase Sapphire Preferred card and want to upgrade to the Chase Sapphire Reserve®, you might not be able to earn a welcome bonus. Chase states the following limitation on earning additional welcome points: This product is available to you if you do not have any Sapphire card and have not received a new cardmember bonus for any Sapphire card in the past 48 months.

Using a preapproved credit card offer to your advantage

Preapproved offers can give you opportunities to earn welcome bonuses and limited-time bonus rewards or take advantage of promotional 0% financing for purchases and balance transfers.

For example, in 2015, Ashley Patrick and her husband used a 0% APR convenience check that came in the mail from their existing Bank of America credit card to pay off an unexpected $6,000 tax bill. The couple had to pay a 3% balance transfer fee but ended up saving lots of money in the long-run since they paid off the debt without incurring any additional interest. Depending on your credit score, you may be able to qualify for a no-fee balance transfer card.

Alternatively, many consumers are turning to a 0% APR card during coronavirus to earn rewards on groceries and also get a little bit of breathing room to pay off purchases over time.

If this is you, the Blue Cash Preferred® Card from American Express could give you 0% intro APR for the first 12 months on purchases from the date of account opening (then 19.24% - 29.99% variable APR; see rates and fees. Variable APRs will not exceed 29.99%). You'll need excellent credit to qualify for the Blue Cash Preferred card, but you can earn a $250 statement credit after you spend $3,000 in purchases on your new card within the first six months. There is a $0 intro annual fee for the first year, then $95. (See rates and fees). Terms apply.

When to be cautious with preselected offers 

While preapproved offers can be helpful, it's important to be mindful of when they pose a risk to your financial situation.

For starters, you're more likely to see a 0% APR or welcome bonus offer show up at times when people are more likely to overspend. According to Harris, there's an uptick in preapproved credit card offers right before the holidays, summer vacation time and tax season. No matter your credit score, this is something you should always watch out for.

It's also important to remember that card issuers send out incentives with profits in mind. If you're working to rebuild your credit, you should be extra-cautious of any deal you agree to. 

"You might get a 0% offer if you have bad credit because issuers see you as 'easy money,'" Harris tells Select. "A card issuer may see that you have a large amount of debt on your credit report and offer you a new card in the hopes that you max it out and wind up paying them interest fees," she says.

For instance, if you have a couple of balances in collections and your credit report states that you have just one small credit card, sub-prime card issuers like might mail you a card offer that looks good at a first glance, but comes with hidden fees.

While it's possible that a new credit card can help you build credit, these sub-prime cards can be a real risk. And they don't offer the same perks and rewards as the best credit cards for people with better credit might.

"They come with monthly fees, annual fees and the interest is really high," says Harris.

And she's not exaggerating: In the terms and conditions for the First Premier® Bank Mastercard® Credit Card, it states that for a card with a $300 credit limit, cardholders are charged a one-time program fee of $95, plus an annual fee of $75 in the first year (then $45), and a monthly fee of $6.25 after the first year. These fees increase as the credit limit goes up.

Likewise, two other sub-prime cards, the NetFirst Platinum and Horizon cards, charge a monthly maintenance fee of $6 and a membership benefits fee of $24.95, which is auto-debited with every billing cycle.

Saying yes to these offers can be risky, says Harris. You should turn to them only when you have a clear plan for how you'll use them to build credit. Before you hit "apply" or redeem a mail offer, research other credit-building cards. You may find out you qualify for a cheaper option for getting your credit back on track.

When to take advantage of preselected offers

"Special financing is a perk that comes along with showing how favorable you've been and how responsible you've been with other lenders, so the card issuers want to celebrate that," says Harris.

If you qualify for good terms, a 0% APR card can be very helpful for budgeting large purchases over time or paying down debt. But you'll need to feel confident in your ability to make your payments in order to make these incentives worth it.

Using a 0% APR card is even more beneficial when it comes with no balance transfer fee. This can save you considerably and give you a major jump-start on your debt. A 39-year-old Denver professional that we spoke to saved almost $500 in interest by using a no-fee balance transfer card to pay off over $16,000 in credit card debt.

And if you're not looking for a 0% APR card, signing up for a card with a special one-time bonus offer can be a great way to earn cash back or travel miles on expenses you were already planning to make. These cards typically have an annual fee, so it's important to make sure you can offset the expense by the rewards you earn.

Can you call and ask your credit card issuer for an offer?

"You can call and ask, but I've never known a vendor to say yes because they all have their own in-house criteria," says Harris.

Every offer is selected on an individual-by-individual basis. Even if your issuer extends an offer to your friend or spouse, you might not see the same opportunity.

"My husband and I both have Discover cards, and sometimes he gets an offer that I don't," says Harris. "I'll call and ask if I can have it too, and they say no."

Harris thinks it could be an issue of seasonality and when card issuers market to their members. Since she applied for her card seven months before her husband, she believes they are in two different marketing cycles. Card issuers are known for mailing offers for different customers at different times based on the length of time that person has been a cardholder and how well they've followed the borrowing agreements.

In addition, your card issuer may want you to apply for a new card, instead of giving you an offer for your current card, in order to meet application quotas, says Harris. So instead of offering you 0% APR on a card you already have, you may need to open a brand new card. 

Bottom line

When you're being considered for a preapproved credit card offer, keep in mind that card issuers look at the whole picture. 

"I've seen people in the low 600s get approved and people in the low 700s get denied for the same offer," says Harris. "People always want to know what your score is when you get approved for a new offer, but that three-digit number is not the most important thing," she argues.

Factors such as income, debt-to-credit ratio (or credit utilization rate), payment history and recent inquiries are also important in your lender's decision.

Don't miss:

For rates and fees of the Blue Cash Preferred® Card from American Express, click here.

Information about the Chase Freedom®, First Premier® Bank Mastercard® Credit Card, NetFirst Platinum, and Chase Slate® has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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