Personal Finance

Pre-Approved Credit Card offers

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  • May 24th, 2015 2:34 pm
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[OP]
Sr. Member
Mar 25, 2005
650 posts
69 upvotes
Bowmanville

Pre-Approved Credit Card offers

When should you accept and when you shouldn't?

I got an e-mail saying i'm pre-approved for the Scotiabank SCENE visa. Outside of my mortgage, I have nothing with Scotia. To me, I'm not a THEATRE movie watcher (max 2-3 movies a year), so I have no interest in this card.

Not sure if its even worth churning.

Also, as a note of history, was recently approved for both the AMEX SimplyCash ($5k) and MBNA Smart Cash World ($12k). My overall utilization currently is 44% with the majority sitting at a .99% interest rate for 15 months.
17 replies
Deal Addict
Jul 28, 2012
1044 posts
479 upvotes
Trois-Rivières, QC
When you say "churning", I suppose it means that the preapproval comes with a welcome bonus. I believe SCENE points can be redeemed for other things than freebies at the movie theatre.

However, keep in mind that Scotiabank charges a $10 inactivity fee if you don't make any transactions with your card for 12 consecutive months.
http://www.scotiabank.com/ca/en/0,,697,00.html
[OP]
Sr. Member
Mar 25, 2005
650 posts
69 upvotes
Bowmanville
Correct it came with 2000 bonus SCENE points.
Sr. Member
Aug 14, 2013
548 posts
51 upvotes
Montreal, QC
I got this offer as well, and I changed it to the Momentum No-Fee Visa.
[OP]
Sr. Member
Mar 25, 2005
650 posts
69 upvotes
Bowmanville
MrAmex wrote: I got this offer as well, and I changed it to the Momentum No-Fee Visa.
What was the process you went through? Did you get the SCENE points then change?
Sr. Member
Aug 14, 2013
548 posts
51 upvotes
Montreal, QC
No. I changed it before they issued the card, it is easy to do it.
Call them telling that you don't want Scene card, and that you want the Momemtum Visa.
tg82 wrote: What was the process you went through? Did you get the SCENE points then change?
Sr. Member
Sep 9, 2012
622 posts
156 upvotes
Edmonton
Watch out for CIBC 'pre-approvals'. My wife received one for an Aerogold visa infinite, and applied using the offer ID and reference number on the letter. Pre-approval was written all over the application. Despite this, a CIBC hard hit showed up on her credit report shortly after applying.
Deal Addict
Nov 18, 2012
1527 posts
592 upvotes
Toronto
Most pre approval still make a hard pull. Except pre approval credit limited increased.
Simple is the best.
Deal Addict
Feb 10, 2013
4542 posts
1095 upvotes
Richmond
2000 scene points is 20 dollars off at sport chek. so if you don't watch movies, it's a straight 1% back in points redeemable at sport chek.
Newbie
User avatar
Dec 4, 2014
45 posts
9 upvotes
Concord, ON
I just got an offer I'm considering as well for 6k from Scotiabank...right after paying off OSAP (go figure). Wouldn't it be smart to accept?

Adding more credit will only lower my utilization ratio, and if they don't hard pull, thats a huge bonus.

Am I missing something?
Sr. Member
User avatar
Dec 24, 2011
633 posts
1406 upvotes
East, Canada
AlienAlias wrote: Am I missing something?
A nose and a mouth.

It can be useful to have more available credit but it's also sort of a waste of your time to have more than one 'emergency' credit card. Depends how many CC accounts you have right now. It's a short-term dent, for a longer-term possible slight improvement in your overall score, but if you just manage and use your set of existing credit products then your score will look after itself.
Deal Fanatic
Apr 16, 2007
8132 posts
3476 upvotes
Financial District B…
AlienAlias wrote: I just got an offer I'm considering as well for 6k from Scotiabank...right after paying off OSAP (go figure). Wouldn't it be smart to accept?

Adding more credit will only lower my utilization ratio, and if they don't hard pull, thats a huge bonus.

Am I missing something?
Having any sizeable utilization ratio means you're carrying debt. Accepting and/or applying for any additional credit all for the purpose of lowering that utilization ratio should never be an excuse or primary purpose to accepting an offer or applying for any other.

Moreover, accepting any CC offer for the purpose of lowering the utilization ratio becomes the permission of continuance of that debt amount. Otherwords, instead of lowering your utilization via payments on account you are merely raising the limit ceiling to accommodate the debt and its metrics that affect bureau score profiling.

Hard inquiries are and can still be performed predicated on aged data used for the pre-approval qualifying.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Fanatic
Aug 27, 2004
7608 posts
1034 upvotes
Toronto, ON
mikeymike1 wrote: Having any sizeable utilization ratio means you're carrying debt. Accepting and/or applying for any additional credit all for the purpose of lowering that utilization ratio should never be an excuse or primary purpose to accepting an offer or applying for any other.

Moreover, accepting any CC offer for the purpose of lowering the utilization ratio becomes the permission of continuance of that debt amount. Otherwords, instead of lowering your utilization via payments on account you are merely raising the limit ceiling to accommodate the debt and its metrics that affect bureau score profiling.

Hard inquiries are and can still be performed predicated on aged data used for the pre-approval qualifying.
But in the world of credit bureau reporting, a $3000 balance on a credit card statement is a $3000 balance... whether you pay it off 2 weeks after getting the statement and the next month's balance will be all-new spending or whether you're only making minimum payments.

So, in that context, isn't utilization ratio somewhat important? If you spend $2000/month on a credit card with a $3000 limit and pay it off in full each month, your utilization ratio will be extremely high... whereas if the same person has $30000 in available credit they'll look far less extended.
Deal Fanatic
Apr 16, 2007
8132 posts
3476 upvotes
Financial District B…
VivienM wrote: But in the world of credit bureau reporting, a $3000 balance on a credit card statement is a $3000 balance... whether you pay it off 2 weeks after getting the statement and the next month's balance will be all-new spending or whether you're only making minimum payments.

So, in that context, isn't utilization ratio somewhat important? If you spend $2000/month on a credit card with a $3000 limit and pay it off in full each month, your utilization ratio will be extremely high... whereas if the same person has $30000 in available credit they'll look far less extended.
While utilization ratios are important it should not be the barometer to how you use your credit or live your life (within your credit limits).

For instance, if you're not applying for a mortgage or a auto loan etc. your utilization ratio means squat. If your bureau profile is not going to be analysed or risk underwritten any time soon then it doesn't matter if you're statement balance is $29 or $2900 on the 3k limit card.

I know where you're coming from when you state 2k monthly spend on 3k limit. In that scenario requesting limit increase or adding another card would suffice predicated on operating costs and serviceability within incomes.
But far too many will apply for another CC, as I've stated above, to assist or pad their ratios which in turn really results in slower repayment schedules.

If people really want to lower their ratios... goddamn pay down your balance as opposed to applying for another CC.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Fanatic
Aug 27, 2004
7608 posts
1034 upvotes
Toronto, ON
mikeymike1 wrote: While utilization ratios are important it should not be the barometer to how you use your credit or live your life within your credit limits.

For instance, if you're not applying for a mortgage or a auto loan etc. your utilization ratio means squat. If your bureau profile is not going to be analysed or risk underwritten any time soon then it doesn't matter if you're statement balance is $29 or $2900 on the 3k limit card.
And if you are applying for a mortgage, what are you supposed to do about the statement balance? Pay off your credit card two days before the statement is printed so that the balance reported to the bureaus is $150?
Deal Addict
Feb 10, 2013
4542 posts
1095 upvotes
Richmond
VivienM wrote: And if you are applying for a mortgage, what are you supposed to do about the statement balance? Pay off your credit card two days before the statement is printed so that the balance reported to the bureaus is $150?
pay down the balance to 30% of the utilization ratio i assume.

i'm not even sure if i should take the scotiabank one. They offered me 9k for the scene visa lol. They seem to be handing credit like candy. Everyone else gave me under 2k besides vancity.
Deal Fanatic
Apr 16, 2007
8132 posts
3476 upvotes
Financial District B…
VivienM wrote: And if you are applying for a mortgage, what are you supposed to do about the statement balance? Pay off your credit card two days before the statement is printed so that the balance reported to the bureaus is $150?
Yes that would make the most logical sense. You should know that applying for or accepting any new credit prior to a mortgage app is more of a bad thing than a good thing.

With that in mind what do you think? Pay down current balance to reduce utilization ratios or apply for new revolving credit to lower utilization ratios?
If you choose the latter, make note the months reporting will reveal its new credit even if applicant waits a few months for that mortgage app.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Fanatic
Aug 27, 2004
7608 posts
1034 upvotes
Toronto, ON
mikeymike1 wrote: Yes that would make the most logical sense. You should know that applying for or accepting any new credit prior to a mortgage app is more of a bad thing than a good thing.

With that in mind what do you think? Pay down current balance to reduce utilization ratios or apply for new revolving credit to lower utilization ratios?
If you choose the latter, make note the months reporting will reveal its new credit even if applicant waits a few months for that mortgage app.
Applying for new revolving credit to lower utilization ratios... seems like a silly idea in the short-term (i.e. if you are applying for a mortgage next month). It'd lower utilization, sure, but also lower average account age and add a recent hard hit. Maybe asking existing issuer for a limit increase is a reasonable idea to lower utilization ratios?

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