Prequalified vs. Preapproved: What’s the Difference?
5 Min Read | Published: April 16, 2024
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Discover the meaning of prequalified vs. preapproved, two terms that are sometimes used interchangeably but may have different meanings, depending on the card issuer.
At-A-Glance
- The difference between prequalified and preapproved can vary, as these terms are sometimes used interchangeably by credit card issuers.
- Typically, prequalified refers to a pre-screening application process that you can initiate on the card issuer’s website, while preapproved refers to card offers that you receive from the card issuer usually through the mail or your email inbox.
- Prequalified or preapproved can mean that you’re more likely to be approved for a certain credit card, but it may not be guaranteed – depending on the card issuer.
If you’re wondering what the difference is between being prequalified or preapproved for a credit card, you’re not alone. Anyone who’s received credit card offers in the mail or their email inbox may have come across different versions of these terms. The two phrases are often used interchangeably, but sometimes they refer to different processes. For this reason, it’s a good idea to pay attention to the terms and conditions or promotional material that you receive to see what the credit card issuer means when they say you’ve been “prequalified,” or “preapproved.”
With this in mind, let’s break down what these two terms often mean.
What Does Prequalified Mean?
Many credit card issuers offer prequalification in the form of a pre-screening application that can be submitted before an applicant opts for a full credit card application. The pre-screening process is typically designed to help give potential applicants an idea of whether they’re likely to be approved for a certain credit card. However, it may not be a total guarantee of approval – depending on the card issuer.1
Prequalification will often take the form of a soft credit check, allowing the applicant to gauge their eligibility without having to risk any impact on their credit score (unlike a hard credit check).2 Once an applicant has been prequalified, they can usually then choose to move on to the full application and hard credit check at that time.
Remember: this may differ between credit card issuers, so it’s important to read the application details carefully when applying for a card.
Did you know?
You can apply for a U.S. American Express Personal Card and know if you’re approved with no impact to your credit score.
A hard credit check only occurs after you’ve accepted the Card, not during the application process itself. If you choose to accept the Card, the information we provide to the credit bureau(s) may impact your credit score.
What Does Preapproved Mean?
Preapproved offers are typically sent out by credit card issuers by mail or to your email inbox. These offers may be sent to potential candidates who meet some of their initial eligibility requirements for a certain card. Receiving a preapproved offer may be a good indicator that you may be approved for the credit card but like being prequalified, it’s important to note that it is not a guarantee of approval. Preapproved offers usually have a disclaimer stating this, so it’s important to read the details carefully.
What Happens Once You’ve Been Prequalified or Preapproved?
Even if you’re prequalified or preapproved for a certain credit card, you’ll still need to decide if you’re going to move forward with completing the full credit card application.
When choosing a credit card, you’ll want to look for one that fits your needs best, depending on the card’s features and benefits. Here are some examples of the types of credit cards you can apply for:
- Travel Rewards Card
Travel rewards cards offer rewards points on eligible travel purchases, such as purchases at participating hotels and airlines. Some cards offer rewards for other eligible purchases as well, outside of travel.
- Cash Back Rewards Card
A cash back rewards card pays you cash back any time you purchase with the card. With cash back, you can get back a percentage of your eligible purchases, typically as a statement credit.
- Balance Transfer Card
Preapproved offers are sometimes invitations to transfer the existing balance of your current credit card onto a new balance transfer credit card. Sometimes these cards may offer a 0% introductory Annual Percentage Rate (APR) for a set period.
Frequently Asked Questions
Prequalification and preapproval are both done with a “soft inquiry” on your credit. Soft inquiries do not appear on your credit report or negatively impact your credit score, unlike a hard inquiry that may impact your credit score.3
The Takeaway
Prequalified and preapproved are not always the same thing, but the terms are often used interchangeably. The exact implications of these terms can vary, depending on the credit card issuer. Prequalified may refer to a pre-screening application process you can initiate on the card issuer’s website, while preapproved offers are usually sent to you by the card issuer. Being prequalified or preapproved can mean that you’re more likely to be approved for a certain credit card, but it’s not always guaranteed. As a result, you should always read through the details carefully before applying for a card.
Kevin D. Flynn is a financial services provider, business coach, and financial writer. He lives in Leominster, Massachusetts with his wife Evelyn, two cats, and ten wonderful grandchildren.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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The material made available for you on this website, Credit Intel, is for informational purposes only and intended for U.S. residents and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.
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