Definition
“With Approved Credit” (WAC) is a common phrase used in advertisements, especially for loans, leases, and financing offers. It serves as a qualifier that indicates the advertised terms or offers are available only to those who qualify based on the lender’s credit criteria. Essentially, it protects advertisers by clarifying that not all customers will receive the specified terms or offers—only those whose credit has been approved by the lender.
Mechanism of WAC
When an advertisement states that an offer is available WAC, it means that the financing terms, interest rates, monthly payments, or other financial benefits are contingent upon the borrower meeting certain creditworthiness criteria. The approval process typically involves evaluating the applicant’s credit score, income, debt-to-income ratio, and other financial factors to determine eligibility.
Application and Examples
Financial Advertisements
- Auto Loans: Often, car dealerships will advertise low-interest rates or special financing deals with the notation “WAC,” indicating that only customers with approved credit scores will qualify.
- Retail Financing: Interest-free financing promotions for big-ticket items like appliances, electronics, or furniture frequently include the WAC qualifier.
- Credit Cards: Certain introductory APR offers or credit card benefits might be advertised with the WAC proviso.
Example
Consider an advertisement for a new car:
“Drive away with 0% APR financing for 36 months, WAC.”
This means that only customers who have been approved based on the car dealership’s lender’s credit criteria will qualify for the 0% APR offer.
Historical Context
The term “With Approved Credit” has become more prevalent as both consumer credit offerings and regulations have evolved. Its use primarily serves to mitigate legal risks for advertisers, ensuring transparency and honesty in financial promotions and helping to prevent misleading claims.
Special Considerations
Legal and Ethical Implications
- Consumer Protection: WAC statements help in setting realistic expectations among consumers, preventing potential misunderstandings and dissatisfaction.
- Transparency: By clearly stating that offers are contingent on credit approval, companies foster a transparent and ethical advertising environment.
Comparisons with Similar Phrases
- Subject to Credit Approval (STCA): Another common qualifier similar to WAC, indicating that the offer depends on meeting the lender’s approval criteria.
- On Approved Credit (OAC): Used interchangeably with WAC, often region-specific terminology variations.
Related Terms
- Creditworthiness: A measure of an individual’s ability to repay a loan, assessed based on credit history, score, income stability, and other financial factors.
- APR (Annual Percentage Rate): The annual rate charged for borrowing, expressed as a percentage, representing the yearly cost of funds over the term of a loan.
FAQs
What does 'With Approved Credit' mean?
How does WAC protect advertisers?
Can everyone qualify for WAC offers?
References
- Federal Trade Commission. “Advertising and Marketing on the Internet: Rules of the Road.” FTC Website.
- Consumer Financial Protection Bureau. “Understanding Credit Scores.” CFPB Website.
Summary
“With Approved Credit” (WAC) is a key phrase in financial advertising that refers to the contingent nature of the advertised offers on the borrower’s creditworthiness. This qualifier not only sets realistic consumer expectations but also protects advertisers from accusations of misleading promotions. Familiarizing oneself with terms like WAC is crucial for understanding financial advertisements and the implications of credit approvals.
