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What is a Credit Card Issuer? Everything You Need to Know

What is a Credit Card Issuer? Everything You Need to Know
Kelly Boyer Sagert

Kelly Boyer Sagert

Updated February 8, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
From credit card issuers to credit card networks, behind-the-scenes management allows consumers to seamlessly use their cards to make purchases. This post will define terms and otherwise illuminate what steps issuers and networks take to facilitate the credit card system.

How Do Credit Card Issuers Work? 

Although many people know how a credit card works—from how to use one to make a purchase to how to make payments on the account—we may not think as often about the issuer and the role they play. A credit card issuer is a financial institution that offers accounts to consumers. In fact, they handle a much bigger part of the process, starting with the application and approval process.Once a consumer’s application gets approved, credit card issuers send them their cards, along with information about the terms and conditions of their accounts, including their credit limits and, if applicable, their cash advance limits. The issuers also approve or deny individual transactions, bill consumers through monthly statements and collect payments.Credit card issuers must follow numerous governmental regulations as set out by the Consumer Financial Protection Bureau under the auspices of the Federal Deposit Insurance Corporation (FDIC). These include (but aren’t limited to) the following: limits on fees and finance charges, allocations of payments, and increasing annual percentage rates.Next up: credit card networks, a different type of organization, one that deals with credit card issuers and merchants instead of directly with the consumers who have credit card accounts.

Credit Card Issuer vs. Credit Card Network 

The four major credit card networks are as follows:
  • American Express
  • Discover
  • Mastercard
  • Visa
Each of these helps to facilitate processes between the credit card issuers and the merchants that accept their cards at their stores and businesses. The networks create the structure required to allow retailers to take their brand of credit card and receive the funds from the credit card issuer to pay those merchants.Then there’s the issue of fees. The credit card network sets the processing fees that a merchant pays to offer a type of credit card at their store and to accept financial transactions with them. These are also called interchange fees or swipe fees. A credit card issuer, meanwhile, sets the fees that a consumer would pay to use their card. In sum:
  • Credit card networks (such as American Express, Discover, Mastercard and Visa) create a structure for the credit card issuers (banks, credit unions and other financial institutions).
  • Credit card networks also facilitate the processes and payments between issuers and the merchants (retail stores, car repair shops, cleaning service companies and more) that allow their customers to use a particular type of credit card. 
  • Credit card networks set processing fees that a merchant must pay to offer their kind of credit card.
  • A credit card issuer offers a type of credit card offered by a network to consumers.
  • Credit card issuers manage the process from start to finish from the consumer’s point of view.
  • Credit card issuers charge fees for consumers to use their card. Here’s more about those fees.

Does the Issuer of the Credit Card Charge a Fee? 

Types of consumer fees charged by a credit card issuer can include the following:
  • Interest fees: If you don’t pay off the statement balance in full by the due date, then interest will be charged based on the current rate. Here’s more information about zero interest credit cards and tips on how to calculate credit card interest.
  • Annual fees: Some credit card issuers charge a fee once a year, which must be paid for the consumer to continue to have access to their credit line.
  • Late payment fees: If the minimum payment isn’t made by the statement date, then late fees can be charged.
  • Cash advance fees: If a card has a cash advance feature, it will likely come with a fee.
  • Balance transfer fees: If you transfer a balance from another credit card, there may be a fee assessed. 
There can also be returned payment fees if you make a payment and, for example, the check bounces; foreign transaction fees; or other types specific to a credit card issuer. By looking at credit card APRs (annual percentage rates), you can calculate the cost of borrowing the money through using a credit card; it may sound strange to refer to using a credit card as “borrowing,” but, in fact, the issuer is fronting you the money. If you pay your balance in full each month, you can typically avoid paying interest although you may still be subject to some fees.Pay attention to cash advance terms and conditions. Besides coming with a fee, the interest rate on funds advanced to you will likely be higher than if you’re making purchases with that card. Plus, there isn’t a grace period when you don’t pay interest. It begins accruing on the day that you “buy” the money from the credit card issuer. You can find more information about what credit card terms mean here.

Finding the Credit Card Issuer Number 

A credit card issuer number can refer to the phone number of the issuer or their issuer identification number. Here’s more about each.

Credit Card Issuer Phone Number 

To find the telephone number of your credit card issuer, locate the number that’s listed on the back of the card or go to the issuer’s website to find the appropriate telephone number. Your issuer may provide different phone numbers for different types of questions: customer service issues, lost or stolen card challenges, request for an increased credit limit and so forth. 

Credit Card Issuer Identification Number 

The credit card issuer identification number (IIN) usually consists of the first eight digits of a credit card number and identifies the credit card network and the credit card issuer. In other words, these numbers wouldn’t be unique to your credit card number and the IIN is used to process financial transactions made on this account. Numbers that follow the IIN will be unique to your account. 

Examples of Some Major Credit Card Issuers 

In alphabetical order, here are several of the major credit card issuers:
  • American Express
  • Bank of America 
  • Barclays
  • Capital One
  • Chase
  • Citibank
  • Discover
  • Synchrony
  • USAA
  • U.S. Bank
  • Wells Fargo

Finding the Right Credit Card 

Tips to help you find the right credit card:
  • Compare the APRs to see which ones are best
  • Also consider the reward programs, including:
    • What you get (cash back? Travel points?)
    • How you can redeem the rewards
  • Compare the fees, including whether an annual one is charged
Armed with this knowledge, compare credit cards and make a savvy choice for your unique situation. 

The Takeaway 

Credit card issuers handle the credit card application, approval process, payments and overall management aspects of a person’s account. This is different from a credit card network that sets up the structure for issuers who will offer their brand of credit card. From a borrower’s standpoint, what’s most important is to choose a card that’s best for them, financially speaking, and offers the benefits they want and need.

Apply Today for a Credit Card 

Ready to apply for a credit card? At Lantern by SoFi, you can fill out one application to receive offers from lenders in our network.
Photo credit: iStock/SDI Productions
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.SOLC112183

About the Author

Kelly Boyer Sagert

Kelly Boyer Sagert

Kelly Boyer Sagert is an Emmy Award-nominated writer with decades of professional writing experience. As she was getting her writing career off the ground, she spent several years working at a savings and loan institution, working in the following departments: savings, loans, IRAs, and auditing. She has published thousands of pieces online and in print.
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