If you’re familiar with finance jargon, you’ve most likely heard of pre-approval credit cards. These cards are typically issued by major credit card issuers like the Bank of America. However, another type of pre-approval card that might not be popular is the pre-approval store credit card, which ensures smooth transactions. Pre-approval store credit cards are cards issued by stores and retail units. The only difference between them and the usual pre-approval credit card is that they can only be used in specific stores. The major advantage to getting a store card is the availability of special offers like discounts, bonuses, rewards, etc that would be awarded to you. These special bonuses enable you to make purchases at the store that issued the card. The obvious disadvantage is that you can only use the card at the store that issued it.
Now let’s dive into all the crucial details you need to know about pre-approval store cards.
How Do Pre-approval Store Cards Work?
When you request a pre-approved store card, the card issuer performs a hard inquiry on your credit. This hard inquiry will help them determine if you are qualified for the pre-approved store credit card.
If you get a notification from the store that you have been pre-approved for their store card, this means that there is a high percentage that you would get the card. Of course, this will only happen if you have passed all of their basic requirements. Some of these requirements include fraud checks, accurate details, your credit history, etc.
Difference Between A Pre-approved Or Pre-qualified Store Card
The difference between a pre-qualified and pre-approved store card depends on the store issuing the card itself. Sometimes they are two words that mean completely different things. Other times they are used interchangeably by the card issuer. Whenever the two words are used to mean different things, the key difference between them is the type of inquiry performed. For a pre-qualification store card, the card issuer only performs a basic review of your credit history. This review is not usually strict and would not impact your credit score.
The opposite is the case for pre-approval store cards. The card issuer performs a hard inquiry before you can be qualified for a pre-approved store card. That means that you would have to submit some personal information before you will be considered. Sometimes, this hard inquiry could reduce your credit scores significantly.
How Do I Get A Pre-approval Store Card?
This depends on the store in question. Some stores grant pre-approval store cards when you request them. As for the others, you would have to wait for them to send you an offer via email or mail. Sometimes, you might get this offer during a check-out.
If the store grants pre-approval cards, then all you have to do is this:
- Go to the branch of the store nearest to you.
- If you’re not sure if they grant by request, ask them if they do so.
- Ask them all the requirements and policies associated with the card.
- If they do, request the pre-approval store card request form.
- Fill out all the necessary details and attach the necessary documents.
- Patiently wait for a response. If your request has been rejected, it will be communicated to you. The same will happen if it has been approved.
Where You Can Use Store Cards?
The locations available for you to use your store card depend on the type of store card. There are majorly two types of store cards all over the place; open-loop store cards and closed-loop store cards. The closed-loop store card can only be used at the branches of the store that issued them. For example, if you got an IKEA Projekt credit card, you can only use it at the IKEA branches and any of its related stores.
The open-loop store cards, on the other hand, can be used anywhere you can use a typical credit card. You can easily identify these with the MasterCard, Visa, or American Express logo that comes with them.
Stores That Offer Pre-approval Store Cards
Although not all stores or retail units offer pre-approval store cards, there are still a few who do. Here is a list of some of the stores that have a pre-approval card option:
- IKEA Projekt credit card.
- Jared The Galleria of Jewelry Credit Card.
- Avenue credit card.
- Joss & Main.
- Walmart store card.
- Kohl’s charge.
- Wayfair credit card.
Does A Pre-approval Guarantee That I Would Get The Card?
When most people first hear of the term pre-approval store card, they think this guarantees that they would get the card. The truth is that getting the card is not assured. The card issuer usually conducts a comprehensive overview of your credit history and details to determine your creditworthiness. So, if you do not meet their requirements, your request will be denied. Sometimes, you may be notified by the store that you have been pre-approved for the store card. If this happens, this means that your odds of getting the card when you apply are incredibly high.
Advantages Of A Pre-approval Store Card
If you’re unsure if getting a pre-approval store card is the best decision for you, then you might want to consider the advantages of getting one first. The main advantages of a pre-approval store card include:
- They are relatively easier to get than the more common credit cards. That is because they typically don’t require a very high credit score.
- They have no extra yearly/monthly fees attached to them.
- You can receive discounts or prizes that you can always use at the store.
- If you meet the requirements for the card, you get to receive special promotions and bonuses.
- If used properly, you can use them to build your credit score.
Disadvantages Of A Pre-approval Store Card
Almost everything in the world has its advantages and disadvantages. The same thing also applies to store cards. The major disadvantage to a store card is that most of them cannot be used everywhere.
Some of the other cons of getting a pre-approval store card include:
- Their average interest rates are higher compared to the more common credit card.
- They tend to have lower credit limits.
- Their customer service might not be very effective. That is because the bank usually provides customer service and not the retailers themselves.
- Every bonus or reward you earn is only effective at the stores themselves.
Conclusion
Pre-approval store cards are not as common as the typical credit cards. Despite this, there aren’t very difficult to get. The problem is determining if they’re what you need. To do this, all you need is an understanding of the advantages and disadvantages of the pre-approval store card. Once you have this in place, you can weigh them together and decide whether to get them or not.
