Monday, December 31, 2012

Give Credit Where Credit Is Due

A lot of people receive preapproved or prescreened credit card offers in the mail, and I am no exception.  I sometimes receive several in a week, and on more than one occasion I've received several in a single day.  Thus throughout the years I started to wonder how many of these applications are actually sent to me in a given year... and in 2012 I decided to find out.  Therefore, beginning on January 1st I began collecting and documenting each and every prescreened credit card offer that arrived in my mailbox not only to determine how many of these offers I received, but also to document the differences between the offers.

Since January, I have documented a total of 69 offers that have arrived in the mail.  Initially I thought about attempting to document offers received via email as well, but I soon realized that would include hundreds of such offers, so I opted to limit this experiment to only offers that happen to appear in my physical mailbox.  I then used a spreadsheet to list details such as introductory interest rate, regular interest rate, annual fee, balance transfer fee, as well as any particular "bonus" offered with the card such as airline miles, cashback bonuses, or points per dollar spent.

Yes... I apparently have far too much free time.

The Offers

Here is a summary of some of the more interesting facts about the prescreened offers I received:

  • 57 of the 69 offers included a introductory APR of 0%.
  • A shortest intro APR offered was for 12 months; the longest for 18 months.
  • The lowest, regular (non-intro) APR was for 9.99%; the highest was for a whopping 25.24%!
  • 61 of the 69 offers had no annual fee.  The few cards that did include an annual fee were typically travel cards that offered airline miles for every dollar spent.  The annual fee for these cards ranged from a low of $95 to a high of $150 although in most cases the fee was waived for the first year.
Now as far as which banks were responsible for the offers I received, the breakdown is as follows:
  • Discover: 23
  • Citi / Citbank: 16
  • Capital One: 14
  • American Express: 11
  • HSBC: 2
  • Comenity Bank: 2
  • Chase: 1
It should be noted that in mid-2012 Capital One bought HSBC, so I could have listed those as the same company for a total of 16 offers.  Either way Discover is the clear winner here with a total of 23 offers out of the 69 I received.

If you prefer a visual reference, here is a pretty chart showing the final outcome taking into account conjoined companies:

Factors Impacting The Number of Offers

There are a few specific items I need to point out regarding the total count of prescreened offers showing up in my mailbox.  First of all I currently hold three credit cards.  I have a Wells Fargo Visa, a Chase Freedom Visa, and a Menards card issued by HSBC (aka: Capital One).  My relationship with these companies most likely impacts the number of offers coming from them, as I wouldn't expect to get a lot of offers from companies that I already hold cards with.

I have been told that Wells Fargo does not currently send prescreened offers to non-Wells Fargo customers therefore if someone isn't a Wells Fargo customer and doesn't receive offers from Wells Fargo I wouldn't exactly be shocked.  In the interest of full disclosure I should mention that I do in fact work for Wells Fargo, but I do not work in the Credit Card line of business so don't quote me on how they handle their prescreening process.

As to my Chase Visa card, I should note that prior to me having a Chase card, I would get prescreened offers from Chase about as often as I do from Discover.  Apparently these people don't give up easily.  Capital One on the other hand doesn't seem to care that I have a HSBC issued Menards Card, because they continue to send me prescreened offers on a regular basis.

In years past, I have had cards from Capital One, Citibank, Discover, and retail (store) cards issued by Wells Fargo and GE Financial.  The Wells Fargo card was from a furniture store, and the GE account was for a carpet purchase.  The cards from Discover and Capital One were closed upon my request because I rarely used them and they were simply taking up room in my wallet.  The store accounts were opened at the time of the purchases due to 0% APR offers, and they were closed within the interest free window in order to prevent any interest charges being applied to the accounts.  I only mention these cards because I have an account history with these companies which may or may not impact the number of prescreened offers I receive from them.

My Credit Profile

I will admit if you would have asked me how many prescreened credit card offers I receive in the mail over a one year period, I would have guessed at least 150.  When the total count showed me that I actually receive less than half that amount I was somewhat surprised, but I cannot state if my estimates were based upon past experience, or if perception simply doesn't match reality.

I don't believe my actual credit score has changed much in the past few years, so I doubt that has anything to do with the number of offers arriving in my mailbox.  I monitor my credit report on a regular basis and have good to excellent credit.  My credit score ranges from high 700s to low 800s depending upon the credit bureau and when I happen to check (the most recent score I have seen was in the upper 700s).  I've never been late on any payments and I have verified my credit reports do not show any late or missing payments.  

That said, I have noticed over the past year my credit score appears to have dropped a bit which I attribute to the fact that some of my older accounts are dropping off my credit history due to them being closed.  This likely impacts my credit utilization, and because I no longer have a car loan that I'm paying on a monthly basis I'm assuming there is some impact due to fewer types of credit being used.  

One mistake I made in years past is to close old credit cards and open new accounts when there was a tempting bonus offer.  For instance at one point I had a Capital One card with a fixed 5.9% APR, however because I rarely used the card I closed it and opened up a different account with another card issuer because of a $300 cash bonus.  Because I don't typically carry a balance on any of my credit cards, I generally don't care about the APR of a card, however the cycle of opening and closing credit card accounts can have a negative impact upon a credit score.  Because of this, I plan to keep the cards I have even if I only use them several times a year.  

The Never-ending Sales Pitch

It seems clear that Discover, Capital One / HSBC, and Citi are very determined to give me a credit card and on more than one occasion I received multiple offerings from these companies within a one week period.  In fact, I received an offer from Discover on April 16th, and a second offer from them two days later on April 18th.  The offers themselves were identical, so I could see no reason why they were so quick to send a follow-up mailing.

As mentioned previously, Discover was responsible for sending me a total of 23 prescreened offers throughout 2012 or an average of two offers per month.  I am convinced that they are single-handedly keeping the US Postal Service in business.

Speaking of Discover, their typical offer included a 0% intro-APR for 12-15 months with a regular APR of 9.99%.  However in May I noticed their regular APR moved upwards to 10.99% and in July it moved up to 12.99%.  In August the APR reached a peak of 14.99%, but two short weeks later in September they were back down to 9.99% where they have remained until the end of the year.  I'm not sure what drove the varying interest rates, but it seems odd that an APR would slowly rise only to drop 5% in a matter of two weeks.  I guess this is one case where it clearly pays to keep track of the various offers before sending in an application.

The Outliers

If this little experiment has taught me anything, it is that there are vast differences between offers when you look at the details.  Late in the year I received two offers issued by Comenity Bank for the "Express NEXT" card (a store credit card for the Express clothing stores).  This wasn't exactly shocking to me because I had recently signed up for a rewards program in my local Express store, and shortly thereafter the prescreened offers showed up.  The disturbing aspect of this was that the regular APR for this card is a whopping 24.99% which was second only to an offer received from Sears.

Speaking of Sears, their offer (issued by Citibank) not only was the highest APR of any card received throughout the entire year at 25.24%, but they didn't even include any type of intro APR.  They were nice enough to offer a $10 statement credit after the first purchase, but honestly... I find this offer insulting.  I realize store-branded cards typically hold higher APRs than regular bank-issued, non-branded cards, but a card with an APR above 25% is simply insane especially considering the card offers no significant benefits on top of a traditional card.

I realize Sears has been losing billions of dollars a year for the past few years (yes that is billions with a "B"), but if they want to stay in business and build brand loyalty it probably isn't a great idea to attempt to return to profitability on the backs of their credit card holders.  To make matters worse I hold a Sears loyalty card with VIP status meaning I have spent thousands of dollars with Sears in a one-year time frame... and this is the way that loyalty is rewarded?  I'm underwhelmed Sears... but that really isn't anything new.

The Fine Print

I of course am not about to list all of the fine print for each of the offers I received, but I will provide a little insight as to my methodology.

First, if the regular APR was listed as a range (for instance 9.99% - 12.99%) I always listed the lowest APR in that range to correspond to a person with good to excellent credit.  Obviously not everyone would qualify for the lowest APR, but this was one way to level the playing field.

Next, most APRs were listed as varying with the market based upon the Prime Rate.  I documented the APRs at the point the offer was received, but if the Prime Rate happens to change, it is assumed some of the APRs would as well.

Finally, I didn't list all of the bonuses that are included with each offer.  I did document them in my spreadsheet for comparison sake, but I didn't take the time to outline each here for space reasons.  Most of these offers were for point or mileage bonuses after charging so much on the card within a specific time period.  For example it is very common to receive 10,000 bonus miles or $100 statement credit if $1,000 is charged within three months.  A few offers included gasoline gift cards, cashback bonuses, or bonus miles upon an approved application as well.

Stop The Madness

As fun as this process is, I really have no desire to receive dozens upon dozens of these offers each and every year, and because of the ever-increasing threat of identity theft, I'm forced to shred these offers rather than just chucking them in the trash.  Therefore, I will be putting a stop to most of these offers by following the recommendations of the Federal Trade Commission.

The FTC advises anyone who wishes to stop such prescreened offers to call toll-free 1-888-5-OPT-OUT (1-888-567-8688) or visit  Either of those options should remove your name from the mailing list for five years, which for most people is probably a good thing although if you do decide you want a credit card you may have to reach out to a card issuer rather than waiting for them to reach out to you.  However as a bonus, you will probably save several trees due to the massive reduction in junk mail arriving in your mailbox.

Do you have a question or comment about this post?  Sound off in the comments and I'll do my best to respond.


  1. just saw your story.
    Here is what I did. at first.. send the empty envelope back to them, that way they pay the postage for nothing. If all would do that they would pay lots of stamps for nothing.
    But I kept on getting invites.
    The someone told me.. tear the application, include it in the envelope and send it back. The computer cannot deal with tore application so has to be done manually. That takes working people to do this!!!!
    After 1 1/2 years of doing this, my name finally got taken off and have not received any offers for credit cards app. for 2 years!!!!!
    Worked for me!!!

    1. The problem is, the credit card companies have started to get wise to these tricks, and some of them are putting barcodes on the business reply envelopes so they know who they are coming from. Sending those back for anything other than "official" purposes could in theory get you in trouble.

      Instead of spending a year and a half sending back envelopes, it is probably faster and more effective to simply visit the website to stop the offers within 60 days. The bonus here is that not only will this stop credit card offers, but other types of prescreened offers as well such as offers for insurance, investments, and even automobile warranties.

      Thanks for the comment!