Should You Apply For 'Pre-approved' Credit Card Offers?

You've picked up your mail and lo and behold there's one from a credit card company offering you a pre-approved credit card. There's even an application form with some of your details filled in, you just need to complete the rest of the form and your credit card with a limit of £1000-£3000 or even more could be yours. It couldn't be simpler - so you complete the form quickly as there's a this offer expires before date on it and you're ready to send it off, but before you do so just think! Don't be in such a hurry!

For instance, if you were going to buy a used car at around £3000 would you just send off a cheque for the money to someone who sends you a leaflet through the post saying 'This car is the best around for the price and it can be yours today just by filling in a simple form'? You bet your life you wouldn't!!!

You'd take into account things like the age of the car, its value what condition it was in and you'd compare it to other similar cars that were for sale to see if you were getting value for money. When you're applying for a credit card pre-approved or otherwise you should do the same. Shop around to see what other credit card companies are offering before making a decision, don't just apply because it's been made a little easier for you.

These mail offers for pre-approved cards are actually just another marketing ploy to attract new customers. Your 'pre-approved' offer doesn't mean you will automatically receive a credit card. Your formal application will be vetted and assessed and if it fails to meet the credit card company's criteria then your application may be refused or you may be offered a card with a lower limit, or one at a higher interest rate. It's also worth considering that the 'pre-approved' card you are being offered is not necessarily the one most suitable for your specific needs. You should read the terms and conditions carefully before sending off your application and make sure it's the best possible card for you.

Compare the card you've been offered to others, and take into consideration things like the:

• APR (Annual Percentage Rate) this measures the cost of the credit charge annually.
• Is the APR Variable? This means if interest rates change the rate you pay will change accordingly.
• Annual Fees- You may be charged a fee monthly fee even if you don't use your credit card.
• Transaction Fees and other charges-You may be liable to a fee if you exceed your credit limit, or make a late repayment.
• Bonus programs- Do they offer incentives like cash back, merchandise or free air miles? If you don't think you'll take advantage of these offers look for a different type of card you may get a lower rate, as the cost for these incentives is usually hidden somewhere in the rates offered.

Once you've taken everything into account and found a card with the features to suit all your needs then that's the time to apply.