Wondering how you can get yourself a Pre-Approved Credit Card? Don’t worry. In today’s post, I will be discussing everything you need to know about preapproved credit cards and how you can apply for the same.
What is a Pre-Approved Credit Card?
Typically, when you apply for a credit card, the bank or financial institution fetches your Credit Score and takes a decision on whether or not to approve your application, depending on your credit behavior and creditworthiness. This data they get from Credit Bureaus who maintain your Credit Profile.
However, a pre-approved credit card, as the name suggests, is already approved for usage without the eligibility check.
Who should get a Pre-approved Credit Card?
A pre-approved credit card is ideal for someone who has no credit history till now and wants to take up their first credit card. Often banks refuse to provide a credit card in case someone doesn’t have a Credit Profile. For them, the only two ways of obtaining a Credit Card are either taking a Secured Credit Card based on FD or getting a Pre-approved Credit Card.
Needless to say, pre-approved Credit Cards are popular with freelancers, small business owners, and students.
How does a Bank decide to offer a Pre-Approved Credit Card?
Typically banks can offer you a pre-approved credit card if they notice that you are a creditworthy individual. But, as I mentioned earlier, they do not fetch your Credit Score for that. Then, how do they decide?
These are the factors based on which banks can take a decision:
- You maintain a high networth banking relationship with your bank. Or, you maintain a high balance.
- You maintain a salary account with your bank. Or, you get payments on your bank account regularly.
- You maintain a high FD amount with your bank.
- You use your bank Debit Card or UPI to make a good volume of purchases every month.
- You continue (1), (2), & (4) for a period of 3-6 months.
In short, banks look for individuals who keep a good balance with a bank and do a lot of transactions. These are potential customers for the bank who will sooner or later be offered a preapproved Credit Card.
Which Banks offer Pre-approved Credit Cards?
Any bank may choose to offer a preapproved credit card, however, generally speaking, Private Banks tend to be more lenient in offering them. You can expect pre-approved credit cards from these banks (but not limited to):
- Axis Bank.
- ICICI Bank.
- HDFC Bank.
- SBI.
- IDFC First Bank.
- RBL Bank.
- Kotak Bank.
- IndusInd Bank.
These are the most popular banks.
How to get a Pre-approved Credit Card?
The easiest way of getting yourself a pre-approved Credit Card is by opening a bank account in your desired bank, and possibly upgrading to high-networth banking if you can afford it.
For example, in case you open an HDFC Bank Account, I would recommend you to upgrade to classic banking or upwards. As a perk, you get almost all banking services free of cost.
In case you can do regular monthly transactions from your bank account, this is a plus.
Within 3-6 months, most banks will offer you a Pre-approved Credit Card. Watch out for intimations from your bank via Emails, SMS, Netbanking Banner, or even via calling.
Remember, in case of a pre-approved credit card, your bank decides your eligibility depending upon your relationship with the bank only. Your CIBIL Score is not required. You also do not need to submit any documents. Bank fetches your KYC Documents as registered with them.
Enjoy!
Thank you for reading. Don’t forget to join our FinTalks Facebook Group & FinTalks Telegram Channel for regular updates on banking and finance.