Credit cards are among the most common means of payment many people use globally. It helps limit people’s spending, eliminates the hustle of carrying cash, and makes shopping more convenient. In addition, people must shop around and compare card issuers when considering applying for a credit card.
Numerous credit cards are available from different issuers with different credit limits, interest rates, fees, benefits, and rewards. So who are credit card issuers?
Who Are Credit Card Issuers?
These are financial institutions like fintech companies, credit unions, or banks that offer end users like business owners or consumers credit cards. They are responsible for creating, managing, activating, approving, and mailing credit card applications. They are also the ones who make credit card policies plus customer support approaches.
They are also the company’s credit card holders deal with when checking their balance, reporting missing cards, or paying credit card bills. While they don’t process card holders’ transactions with different businesses, they are the ones who decline or approve them.
They set card offers, benefits, rewards, credit limits, fees, and other issues relating to credit cards. Card issuers also report a card holder’s payment and credit history to credit bureaus. In addition, they receive percentages of sales prices that stores pay when they accept their credit cards as payment means, also known as merchant fees.
Some popular card issuers include:
- Bank of America
- American Express
- Capital One
- US Bank
Card Issuers vs. Payment Networks
Besides the name of the credit card issuer, credit cards also contain the name of the payment network. Payment networks are companies that act like go-betweens that process and facilitate payments between merchants and card issuers.
Merchants, in turn, have to pay interchange fees. For example, when a cardholder uses their credit card to pay, the payment system relays the payment details to the payment network, which then sends it to the card issuer.
The card issuer then declines or approves the transaction, relays the decision to the payment network, then returns the information to the payment system to complete the transaction. Payment networks also administer credit card benefits on the card issuer’s behalf. These benefits include an extended warranty, rental car insurance, and a price protection policy.
Some payment networks include American Express, Visa, MasterCard, and Discover. American Express and Discover are card issuers, but there can be credit cards from either of them that don’t belong to their payment networks.
Card Issuers vs. Co-Branded Partners
Another name that credit card holders can confuse with card issuers is the co-branded partners. These are merchants, like stores, airlines, or hotels, who work with card issuers to create co-branded credit cards.
Even though the name of the co-branded partners appears bigger on the card, the bank or credit union issues the card. Therefore, if credit card holders have issues with their payments, benefits, or card fees, they should call the issuer, not the co-branded partners.
However, if cardholders have a co-branded reward card, they should call the co-branded partners if they have issues with their rewards. This is because the card issuer purchases the rewards from that brand before distributing them to the cardholder.
According to experts from SoFi, understanding a card issuer and their responsibilities makes it easier for cardholders to understand their relationship. Understanding the differences between all the players involved in the credit card also makes it easier for cardholders to navigate issues.