Hi, I’m John Ganotis from CreditCardInsider.com and today’s question is: Why do I get so many credit card offers in the mail? And the follow-up question: How can I stop them?
So, the reason you get so many credit card offers in the mail is that the credit card companies want you to sign up and they have mathematical models that show them that if they send out all these credit card offers and sometimes the same offer to the same person multiple times that some percentage of people will actually apply and they’ll end up making money in the long run.
Now, they don’t generally just waste postage sending the same offer out to everybody. Instead what they do is send specific targeted offers out to specific groups of people who already match certain criteria in their credit history. So if you get something in the mail that says “pre-approved,” “pre-qualified,” “pre-screened,” or “pre-selected” for a credit card, chances are the credit card issuer has already screened your credit history and decided that you are a good fit for that card.
Now, how does a company that you’ve never done business with know about your credit history? Well, credit card issuers can actually buy that information from the credit reporting bureaus. And we already did another video that talks about that process in more detail called “What does it mean to be pre-qualified for credit card?” so I’m just going to link to that video if you want to learn more about how the credit card issuers buy your information from the credit bureaus.
But basically, if you do get an offer in the mail you can find out if the offer already considers your credit by looking in the fine print. So you might get an offer that looks something like this with all of the terms, and then somewhere it will say “pre-screen and opt-out notice” if the issuer has already considered your credit history before sending you this offer.
Now, since they’ve already looked at your credit history to some extent the credit card issuer may give you better terms on this offer than you would be able to get if you just went to the issuer’s website. So that could be a better sign up bonus, or a better interest rate, or something like that. Basically, since the credit card issuer has already pre-screened you with certain criteria through the credit bureaus, then they might offer you something better than what you would get just applying through the issuer’s website.
So you can actually check to see if there are existing pre-qualified offers for you from certain issuers by going to specific issuer websites. And, for example, the Editor of Credit Card Insider was able to get over $100 more in a sign up bonus by going to an issuer website and seeing if he was pre-qualified for any cards than he would have got if he just went and applied for the card through the issuer site normally.
It also comes in handy to have these prequalified offers when you’re shopping around for a new credit card because whenever you apply for a credit card outright and send in the application you’re going to get what’s called a hard inquiry. And too many of those can start to bring down your credit scores. But if you go on to an issuer website and see that they have a pre-qualified offer available for you, then you’re more likely to get approved for that when you do apply. You’re still going to get that hard inquiry, but you know that the credit card issuer already thinks that this offer is a good fit for you based on your credit history.
Now, on to the question: How can I stop all these credit card offers that are filling up my mailbox?
Pretty much anything that has this prescreen opt-out of notice is going to have some information about how you can opt out specifically with that issuer, but there’s actually something that similar to the Do Not Call list for telemarketers in the US and that’s a website.
It’s called Opt-Out Pre-Screen and you can go to that at www.optoutprescreen.com.
And the website, to be honest, looks pretty shady. That’s the real website and they let you opt out online for up to five years and you can also get a form on that website that you can mail in to opt out permanently. Also, it’s worth noting that the form opt-out pre-screen actually asks for your social security number.
In the FAQ on their website they say that that’s so that they can better identify people, for example, people that have the same name, but you can actually submit it without your social security number if you’re nervous about that. But that is legit website to opt out of this stuff. It’s www.optoutprescreen.com. And I’ll link to that in the description of this video, too.
Now, by default, as I said you can opt out for five years or you can opt out permanently by mail, but you can actually opt back in on the same website. Now, when you do opt out the request gets processed with the credit bureaus within five days, but it might take a little bit longer for the actual credit card offers to stop. I’d say give it at least a couple of weeks.
Now, as I said before, you might be able to get better deals through these prequalified offers than you would be able to get just applying. And so, the strategy that I suggest is that if you want you cut down on the amount of mail that you’re getting from these credit card issuers, simply go to that website and opt-out. Then, when you are in the market for a credit card again, go back to the website, opt back in, and then give it a month or two and then you can start to shop around, maybe on the issuer websites, and see if they have any pre-screened offers for you or see if you start getting any in the mail.
One last thing to note is that there are some myths out there that using this opt-out pre-screen website to either opt-out or opt-in of these offers can hurt or improve your credit. All that you’re affecting here really is, other than your mail, is soft inquiries on your credit, which don’t negatively impact your credit scores. They do show up on there, but they won’t hurt your credit scores and so if you do this, or choose not to do this, you’re not going to damage or give up a possible improvement your credit.
So I hope that this video has helped you learn more about how you can stop those offers if you want to, or use them more strategically really as a great way to get better benefits and then stop a bunch of junk mail when you’re not looking for a new credit card. I’m John Ganotis from CreditCardInsider.com.
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Thanks for watching, and have a great day.