It cannot be stressed enough how important it is to be careful when choosing a credit card issuer. You cannot apply for a new credit card without knowing anything about the issuer, without knowing how reliable they are, or how good their customer service is.
Some of the most popular issuers today include Bank of America, Synovus Bank, Applied Bank, or Chase Bank, but these aren’t your only choices.
There are many other credit card issuers that can provide both the typical credit cards such as low-interest cards, no annual fee credit cards, or no foreign transaction fee credit cards and credit cards such as shopping or co-branded cards.
So, let’s see what these other credit card issuers are, how they work, and whether they’d be a good choice for you.
Credit Card Issuers vs Credit Card Networks
1. Primarily, it’s important to know what other credit card issuers are not. Visa and Mastercard, for example, are not credit card issuers, they are credit card networks. They process your credit card transactions and decide which stores and merchants can accept their credit cards. In most cases, it doesn’t matter much which card network you’re using.
2. Card issuers, on the other hand, are financial institutions such as banks or credit unions that lend you money through credit cards. Applied Bank, Bank of Missouri, Capital One Bank, CitiBank, Meta Bank – these are all credit card issuers.
3. There are credit card companies that can act both as credit card issuers and credit card networks. The best-known examples are American Express and Discover. These two credit card companies act as your lenders, and they’re in charge of processing your credit card transactions.
The Importance of Choosing the Right Issuer
Whether you go for Credit One Bank, the Bank of America, or some other credit card issuer, it’s important to be very careful. Your card issuer can either help you reach financial stability or put you in debt.
Issuers are responsible for accepting or denying your credit card applications, for setting your rates, fees, credit limits, coming up with the terms and conditions, providing bonuses and rewards, maintaining your credit account, and more.
When choosing a card issuer, you have to ensure that they’re offering the best card features with the lowest fees. You should also consider how good their customer support is since you’ll need to contact the issuer if you have problems with your credit card, if your card has been lost or stolen, or if there are some fraudulent charges.
Soft vs Hard Credit Inquiries from Card Issuers
When you’re researching other card issuers, you’ll often notice that they advertise their soft credit inquiries that don’t damage your credit card score. But what are soft credit inquiries? And for that matter, what are hard inquiries?
A soft credit check is typically a part of the background check. Credit card issuers can take a look at your basic credit information to determine whether you could potentially qualify for some of their credit card offers. Your employers might do a soft credit check before they decide to hire you, and when you check your own credit, this is also considered as a soft inquiry. This doesn’t leave a trace on your credit report and won’t affect your score.
Soft inquiries are also used for credit card pre-approvals. However, if you’re pre-approved for a credit card, this doesn’t mean you’re guaranteed to get it. Soft inquiries don’t present the full picture of your financial health, and you could still be denied once you actually apply for a card.
A hard inquiry is a full credit check. The issuers and lenders will pull your records from one of the major credit bureaus and determine whether you’re eligible for their credit line. This does leave a trace on your credit report and making multiple credit card applications will temporarily damage your credit score.
Other Issuers Card Offers Recap
Other Issuers Cards Frequently Asked Questions
Pre-approvals can be useful in certain circumstances but are rarely necessary. They’re only used as an indication of how likely you are to be approved for a credit card. When an issuer pre-approves you for a credit card, this does not guarantee that your application will be accepted.
For a pre-approval, the credit card issuer only does a soft credit inquiry that offers only the basic information about your creditworthiness. While you might be pre-approved, only a full credit check will give enough information to know whether you’re truly eligible for a card or not.
You can essentially only benefit from a pre-approval if you’re denied since that means that you truly don’t meet the issuer’s requirements. Having your pre-approval rejected won’t affect your credit score.
The most important factor that can influence which rates and fees you might be offered by a credit card issuer is your creditworthiness. The higher your credit score, the lower your rates and fees will be. The opposite is also true, and the lower your credit score, the higher the charges. This is simply because credit card issuers act as lenders, and they’re taking a risk by giving you money since you might not pay them back.
If you have a history of paying all of your debts and bills on time, you’ll seem like less of a risk and vice versa.
There are many popular credit card issuers, some of the best-known include the Chase, Synovus Bank, Credit One Bank, or Applied Bank, for example. However, when it comes to finding the best credit card issuer for you, this is very relative and subjective. While some issuers generally offer better rates and fees, they might offer invaluable rewards and vice versa. Many other credit card issuers will have very similar offers, and you’ll still see both very positive and very negative reviews about them.
Depending on your creditworthiness and credit score, some issuers might be better for you than others. At the end of the day, it all depends on what kind of credit card you’re looking for, and what kind of card you’re eligible for. You’ll need to compare the different credit card features to find the ones that are the most appealing to you.
A hard credit inquiry is a full credit check that offers all the information about your credit activity. All banks, credit unions, and other credit card issuers perform a hard credit inquiry when you apply for one of their cards, that is unless the issuer offers guaranteed approval offers that don’t have a minimum credit requirement.
A hard credit inquiry does leave a trace on your credit report and will lower your credit score since you’re opening a new line of credit. This effect is only temporary, however. The hard inquiry will stay on your report for about 24 months but will affect your score for only about a year. With time, the inquiry has a lower and lower effect on your score, which is why it’s recommended that you wait between 3 and 6 months before applying for new lines of credit.
Most card issuers allow you to apply for their credit cards online, especially when they offer instant decision cards. Online applications are easy, convenient, and in many ways similar to in-person applications. You will need to provide your personal information, including but not limited to your name, ID, verifiable address, social security number, and employment status.
If your online application has been approved, to start using your new card you will first need to sign a contract which you will either receive via email or by post.
While online applications are generally secure, you still need to be careful. Only apply through a secure network (such as your home Wi-Fi), and only use your own device.
Yes. When choosing a credit card issuer, one of the most important factors to consider is whether the issuer reports to all 3 major credit bureaus, Equifax, Experian, and Transunion. If you’re trying to build up your credit score, getting the wrong type of card from an issuer that doesn’t report to all three of these credit bureaus can keep you from achieving this goal.
If your credit card doesn’t report to all of the major bureaus, its usefulness will be rather limited. For example, let’s say you have a credit card that reports only to Experian, and you’ve built up your score and established great credit history. When you apply for a new line of credit from another lender who checks your credit score from Equifax or Transunion, it will be as if you have no credit history at all.
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Most of the credit card issuers will offer both Visa and Mastercard credit cards, except in situations when a financial institution acts as both the credit card issuer and the credit card network, as is the case with American Express or Discover, for example.
However, choosing a credit card network isn’t generally considered as very important by the average consumer. Card networks process transactions and determine where their cards can be used. Card issuers are considered as a more important factor to consider when choosing a credit card because they’re in charge of determining the terms and conditions of your credit card.
A soft credit inquiry is a credit check that offers only the basic information about your credit score and doesn’t go into your full credit history. When you check your credit score, this is considered to be a soft credit inquiry. A soft inquiry can also be performed by banks or credit unions when they offer pre-approved credit cards, and it can be performed by employers when doing a background check.
Since a soft credit inquiry is not performed for a specific line of credit, it doesn’t leave a trace on your credit report and doesn’t affect your credit score. Typically, only you can see when a soft inquiry has been performed on your credit history.