Contacted PenFed today to ask a couple questions on the long list of pre-approved credit offers they gave me. While I was on the phone with them I ended up inquiring about both a credit card (PenFed Power Cash Rewards $31,800) and loan (New Auto Loan $50,000).
I currently have a PenFed Platinum Cash Rewards (no longer offered) with a rate of 10.49% and a 60 month new auto loan with PenFed at a rate of 2.49%. When I originally got these accounts in August 2016 I was a new member and my original Nextgen Score was 769.
A couple days ago is the first time I have received pre-approved offers from PenFed and now my Nextgen score is 772 (nearly identical to what it was 8 months ago, and I have had no missed payments and quite a bit of use on the credit card paying off all but about 1% each month). So in the eyes of PenFed I should be the same or better as far as my creditworthiness is concerned.
When calling in today to inquire about trying to get a credit line increase on my current card which has a rate of 10.49% (since it wasn't listed in my pre-approved offers) I was told that since that specific card was no longer offered (the reason it wasn't on the pre-approved list to begin with) it would take a a hard pull to get a credit line increase on it. I didn't really need the cli so I didn't want to waste a hard pull. I then inquired about the new cash rewards card, thinking I could possibly just transfer my current card into that. I was told no, I couldn't transfer into it, but I could get a new account through the preapproval and the interest rate would be 14.49%. I reconfirmed the rate with them and was told "Yes, 14.49%. 4 points higher than you currently have. If you want, we can do a hard pull and most likely get you the same or better rate than you currently have."
I was now curious about this higher rate offered on the credit card and decided to inquire about the new auto loan I was offered. I was told a new auto loan through the preapproved process today would have be at a rate of 4.49%, a full 2 points higher than the 2.49% I currently have. I was then told basically the same thing, that if I allowed them to do a hard pull I would most likely get the same rate I currently have.
Just be aware that PenFed pre-approved offers will not get you the best rate you can get through PenFed. To get the best rate will require a hard pull of your credit report (assuming your credit is still as good or better than your last hard pull done by PenFed). The only way I can see a preapproved offer being beneficial to someone is if you've had some recent bad credit report. I think in most cases it would be worth a hard pull to get the lower rate, especially a rate which is lower by multiple points.
