topic Re: Pre-Approval Interest Rates in Credit Cards

Pre-Approval Interest Rates

Anonymous — Sat, 20 Apr 2019 14:51:12 GMT

I've been wondering a bit about the interest rates in pre-approvals. My wife and I have very similar credit profiles, from the cards and limits we have, to length of accounts, to utilization and over all scores (seriously within a few points of each other). We get a lot of offers in the mail, and haven't opted out of pre-screening just because we're always interested in what's out there. Generally we get pre-screened offers for the same cards, but with small differences. Recently, she got an offer for a specific card that noted an interest rate of ~16%. I got an offer for the same exact card, but my offer had an interest rate of 21%.

I'm just curious as to why, with everything else being so similar, the interest rates would vary so much. I realize that no one can give me a difinitive answer, as a lot of the answer lies in the voodoo magic of credit calculations, but I was hoping maybe someone would have some insight that maybe I don't. It's really not too important, either. We don't generally carry large balances on any cards that don't have a 0% APR offer on them. But curiosity is getting the best of me, and I figured that this board is the best place to satisfy it.

Re: Pre-Approval Interest Rates

Remedios — Sat, 20 Apr 2019 15:52:12 GMT

@Anonymous wrote:
I've been wondering a bit about the interest rates in pre-approvals. My wife and I have very similar credit profiles, from the cards and limits we have, to length of accounts, to utilization and over all scores (seriously within a few points of each other). We get a lot of offers in the mail, and haven't opted out of pre-screening just because we're always interested in what's out there. Generally we get pre-screened offers for the same cards, but with small differences. Recently, she got an offer for a specific card that noted an interest rate of ~16%. I got an offer for the same exact card, but my offer had an interest rate of 21%.

I'm just curious as to why, with everything else being so similar, the interest rates would vary so much. I realize that no one can give me a difinitive answer, as a lot of the answer lies in the voodoo magic of credit calculations, but I was hoping maybe someone would have some insight that maybe I don't. It's really not too important, either. We don't generally carry large balances on any cards that don't have a 0% APR offer on them. But curiosity is getting the best of me, and I figured that this board is the best place to satisfy it.

Pretty similar does not equal the same. There are always differences between two profiles.

A small change in utilization, length of credit history, or recency of the last opened account can and will change APR depending on algorithms lenders use to assess the risk.

Also, pre-screening only means you've met a particular set of qualifications set by a lender. I've had pre-screened offers that had one APR listed in the letter, but totally different one when attempting prequal at lenders website. Pre-screened offer may be based on CR from months ago, while prequal APRs are done in "real time".

Re: Pre-Approval Interest Rates

pinkandgrey — Sat, 20 Apr 2019 16:27:27 GMT

Profiles that look identical to us mere mortals probably look very different to lenders. No one can quite crack the codes, the algorithms that the banks use lol