What Is a With Approved Credit (WAC) Statement?

A with approved credit statement, or WAC statement for short, is a qualifier used in advertisements. It is intended to clarify that the offer being promoted is conditional on the buyer having an adequate credit rating.

WAC statements are typically included in relation to offers of financing, such as hypothetical lease terms provided in an ad for a new car.

Understanding WAC Statements

To that end, qualifying statements generally provide additional details on the conditions associated with the particular offer being promoted in the ad. In the case of WAC statements, the offer typically relates to the financeability of the product, such as when a car or other big-ticket item can be purchased using credit provided by the seller or an affiliated lender. These advertisements often include incentives, such as interest-free periods or minimal down payments.

Including a WAC statement is an import risk minimization strategy for the advertiser. Without this disclaimer, the advertiser might be accused of using bait-and-switch practices. This practice consists of offering a product or service to a group of customers, where some or all of those customers will in fact not be able to purchase that product or service under the price or terms advertised. Bait-and-switch tactics are considered fraudulent and are a violation of consumer protection laws. Consequently, companies are careful to avoid this liability by disclosing the terms of their offerings through WAC statements and other disclaimers.

The WAC statements themselves typically clarify that in order to qualify for the advertised terms, the customer will need to qualify for credit approval based on considerations such as their credit rating, their current and historical income level, and their employment status. However, consumer protection legislation, such as the Equal Credit Opportunity Act (ECOA), prevents companies from considering personal identity factors, such as the customer's ethnicity, gender, age, religion, or sexual orientation.

Example of a WAC Statement

Laura is in the market to purchase a new car. One day, she encounters a TV ad for a new car that seems to meet the specifications she is looking for. Although the car would typically be more expensive than she can afford, the advertisement states that the manufacturer is currently offering an attractive financing package featuring a minimal down payment and very low interest rates for the first 12 months.

Upon further inspection, however, Laura realizes that she would not be able to participate in this offer. Written in fine print near the bottom of the ad, the company's WAC statement clarifies that these attractive financing terms are only available subject to a credit approval process in which the applicant's credit score, current income, and collateral will be taken into consideration. Because Laura currently has a poor credit score and limited collateral, she anticipates that her application would not be approved.