What's the deal with 'pre-approved' offers?

While credit card companies have a lot of cash they do not just give it away. Before banks mail out pre-approved offers, they first obtain a list of potential candidates from the credit bureaus. The list is compiled by the bureaus according to criteria set by the individual banks. Once the list is compiled the bank then sends its pre-approved offers with enticing terms to everyone on the list.

When you send in your application, the bank runs another credit check. If your credit standing has changed for the worse in the meantime, you will likely be offered a card with a lower credit limit and a higher interest rate. Because the terms were set before you were approved (hence pre-approved), you may not always qualify for the offer you received. After reviewing your credit rating, credit card companies will adjust the terms to better match your needs or theirs. If your credit standing has changed negatively between the time the bank requested the list and you received the offer, rest assured the re-adjusted terms will be less favorable than the ones originally offered.

If you want a credit card you don't have to wait for the banks to send you an invitation. By shopping around you have a greater chance of finding a better deal than the one offered in the mail.