What Are Soft Pull Credit Cards and How Do They Work?

Soft Pull Credit Cards: What They Are and How They Work

Credit cards are a convenient way to make purchases and build credit, but applying for a new card can often result in a hard inquiry on your credit report. Hard inquiries can lower yourcredit scoreand stay on your report for up to two years. However, there is an alternative:soft pull credit cards.

What Are Soft Pull Credit Cards?

Soft pull credit cards are credit cards that allow you to apply without a hard inquiry on your credit report. Instead, the issuer will only perform a soft inquiry, which does not impact your credit score. Soft inquiries are usually performed by lenders when they want to pre-approve you for a loan or credit card, and they do not require your permission.

How Do Soft Pull Credit Cards Work?

Soft pull credit cards work by using alternative methods to determine your creditworthiness. Instead of relying solely on your credit report, the issuer may use other factors such as your income, employment history, and payment history with other accounts. Some soft pull credit cards may also require you to link your bank account to verify your income and expenses.

Benefits of Soft Pull Credit Cards

The main benefit of soft pull credit cards is that they do not impact your credit score with a hard inquiry. This is especially beneficial if you are trying to maintain or improve your credit score. Soft pull credit cards are also a good option if you have limited credit history or are just starting to build credit. Additionally, some soft pull credit cards offerrewards and perkssimilar to traditional credit cards.

Drawbacks of Soft Pull Credit Cards

While soft pull credit cards offer many benefits, they also have some drawbacks. One drawback is that they may have higherinterest ratesand fees compared to traditional credit cards. Additionally, some soft pull credit cards may require a security deposit or have lower credit limits. Soft pull credit cards may also have stricter approval requirements, such as a minimum income or credit score.

Tips for Applying for Soft Pull Credit Cards

When applying for a soft pull credit card, it is important to research the issuer and read the terms and conditions carefully. Look for cards with rewards and perks that align with your spending habits, and compare interest rates and fees. Be sure to meet the issuer's approval requirements before applying, and consider linking your bank account to improve your chances of approval.

Saving Money with Soft Pull Credit Cards

Soft pull credit cards can also help you save money in various ways. Some cards offer cashback or rewards on purchases, which can add up over time. Other cards may offer introductory 0% APRs on balance transfers or purchases, allowing you to pay off debt or make large purchases without accruing interest. Be sure to read the terms and conditions carefully and make payments on time to avoid fees and interest.

Avoiding Risks with Soft Pull Credit Cards

While soft pull credit cards do not impact your credit score with a hard inquiry, it is still important to use them responsibly and avoid risks. Be sure to make payments on time and avoid carrying a high balance, as this can negatively impact your credit score. Additionally, be wary of scams and fraudulent activity, as soft pull credit cards may still be targeted by fraudsters.

Recommended Soft Pull Credit Cards

Some recommended soft pull credit cards include the Discover it® Cash Back, Capital One QuicksilverOne Cash Rewards Credit Card, and Petal® 2 Visa® Credit Card. These cards offer rewards and perks, have reasonable interest rates and fees, and may be easier to get approved for compared to traditional credit cards.

In conclusion, soft pull credit cards are a great option for those who want to apply for a credit card without impacting their credit score. While they may have some drawbacks, they offer many benefits and can help you save money in various ways. Be sure to research the issuer and read the terms and conditions carefully before applying, and use the card responsibly to avoid risks.