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Credit card issuers are the financial institutions that create, manage and approve applications for credit card accounts. As a cardholder, this is the company you'll deal with when taking actions such as checking your card balance, paying your bill or reporting your card as missing.
Here's what to know about how credit card issuers work and how they differ from credit card networks.
How Credit Card Issuers Work
Credit card issuers are financial institutions, such as banks, credit unions, fintech companies and other lending institutions, that provide credit cards to consumers. When you use your card, it's the card issuer that you're borrowing money from.
Card issuers set credit limits, offer card benefits, charge interest and fees, and more. Although most of them don't process your transactions with merchants, they are responsible for approving or declining them.
Some of the bigger card issuers in the U.S. include:
- American Express
- Bank of America
- Capital One
- Synchrony Bank
- U.S. Bank
- Wells Fargo
If you have a question about your credit card, you'll typically call the number on the back of the card, which directs you to the card issuer's customer support line.
Credit Card Issuer vs. Credit Card Payment Network
While most of your experience with a credit card is directly tied to your card issuer, most issuers don't process their own transactions directly with merchants.
This is where credit card payment networks come in. These companies, which include American Express, Discover, Mastercard and Visa, have created a digital infrastructure to facilitate transactions between merchants and card issuers. In exchange, they charge merchants what's called an interchange fee.
It works like this: Let's say you make a purchase at your local supermarket. When you insert or tap your card, the supermarket's payment system sends the transaction details to your card's network, which then relays it to your card issuer. The card issuer determines whether or not to approve the transaction and sends the decision to the card network, which then passes along that information to the supermarket.
Because credit card networks are the ones facilitating transactions, network acceptance is what determines whether or not you can use your card with a particular merchant. In the U.S., all four major payment networks—Visa, Mastercard, American Express and Discover—are accepted virtually everywhere you go. In some cases, however, you may not be able to use an American Express or a Discover credit card. If you're abroad, both of those networks are accepted far less commonly than Visa and Mastercard.
As you might have noticed, two of the four major payment networks are also card issuers. American Express and Discover perform both functions for consumers. There are also cards from other issuers that run on the American Express network, but in the U.S., Discover only acts as a network for its own credit cards.
Why Are Card Issuers and Payment Networks Important?
If you're thinking about getting a new credit card, it's important to consider both the card issuer and the payment network it's on. The card issuer controls the card's terms and features, so you'll want to make sure those meet your needs, and that the issuer has a good reputation among its existing customers.
As for the card network, it may not matter as much which one you pick if you're only planning on using the card within the U.S. If you have plans to travel internationally, however, you'll likely want at least one card that uses the Visa or Mastercard network so you aren't left stranded without a payment option.
You can use Experian CreditMatch™ to filter credit cards based on their issuer. In most cases, you can also see which network a card is on by looking at the image of the card. Although some now show the network's logo on the back of the card, many still show it prominently on the front.
If you're not sure about which network a card uses, contact the card's issuer directly to find out.