What Does Pre-Approved Really Mean?
The short answer? Nothing whatsoever.
It's a riddle for a lot of people: they get dozens of "pre-approved" offers in the mail, yet they know their credit report wasn't accessed. Some even decide to apply and 
discover their "pre-approved" status still leads to a rejection. So, why are they called "pre-approved" if they're not really approved in the first place?
Because it gets people’s attention, that's why.
The key disclaimer here is that you're pre-approved based on what they already know about you...and that could be anything from everything to absolutely nothing.
Credit card companies collect information about you in a variety of ways, but one of the most common is to either examine previous applications for credit cards, or buy lists from other credit card companies that have information from previous applications. Credit card companies like these lists because they have what marketing departments call "built-in interest": you're either actively looking for a credit card, or have been in the past and might be interested in getting a new one.
Old credit card applications are especially good as banks have ever-shifting requirements...and just because you don't qualify for one of their cards doesn't mean you might not qualify for another.
Then they analyze that information. How many credit cards do they know that you have? How many times have you applied for a credit card? What kind of cards did you apply for? For example, let's say they're looking at a person who has filed two applications for high-end credit cards over, say, ten years. That's a person they're fairly sure will qualify for any card they throw at him.
Finally, they look at their own standards. Even a person with bad credit can, in theory, be qualified for certain types of credit cards. If they think there's a reasonable chance that a person can get a card from them, they'll call that person "pre-approved."
It's not deceptive because, as we said, it's based on the information the companies have about you at the time, which, most notably, generally doesn't include your credit report. That's what they look at after the fact, when you file the actual application and give them permission to look at your credit. They may like what they see, or they may not.
But the real goal here is to get you to open the letter they send you. You might remember that credit card companies literally account for six percent of all junk mail in a given year, sending out more letters than there are people in the US in a few cases. "Pre-approved" pushes you to look at the deal they're offering elsewhere; lower interest rates, higher balances, better rewards programs, and so on.
In short, just because you're "pre-approved" for a card doesn't mean you'll get it. And any "pre-approved" offer you get that you might be interested in, you should examine closely. This is a case where looking a gift horse in the mouth is a good idea.
5-7-2012
by Chris Martin
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4-6-2012
by Dan Seitz
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12-5-2011
by Neil Hayashi
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