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Facts

  1. My cousin in high school has ≤ $500 in her HSBC Canada accounts, and has never had any income or job.

  2. She has had only 1 Secured Credit Card with a $300 limit. She spends ≤ $90/month, and always pays it fully, punctually.

  3. Since receiving the offer beneath, she has done nothing that requires a hard credit check. So her credit history ought be the same.

  4. We know that notwithstanding her pre-approval, she must still apply froamlly and have her credit "hard-checked" (and appear on her credit report).

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Questions

  1. See the title. We worry that she'll be rejected, this pre-approval notwithstanding. What if this pre-approval is "bogus", and a marketing ploy to coax people to apply?

  2. Does HSBC's "pre-approval" imply an increase in her credit score (which she hasn't checked as checking isn't free)? If yes, then she's contemplating applying for another bank's credit card.

  • You should probably add at least the text from the first footnote (1) as that may have important information on what they mean by "pre-approval". You might also want to carefully read the other footnotes: depending on exactly what they say, someone of a cynical disposition may think that the waiving of the $35 fee is just one of the options available ("$35 Cash Back rebate") and that you may not be able to get both that and the 5,000 points at the same time. – TripeHound Aug 28 '18 at 8:53
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These credit card pre-approvals are mostly meaningless. Receiving one basically means that they deemed you worth advertising to. That's an incredibly low bar, and means almost nothing when it comes to actually being approved.

Very commonly people don't get approved for the advertised offer, but instead for a lower limit and higher interest rate.

That said, your cousin's history with the secured card makes it sound likely they'd be approved for a low limit card, but this card doesn't seem like a good option. $35 fee in the 2nd year on such little spending is not justifiable and with so little credit history it's not ideal to be closing accounts after a year. Better to find a no fee reward card if looking to build credit and benefit from rewards a little.

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