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’s reliability or good customer service. 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, as there are other less famous issuers.
Many other credit card issuers can provide the typical credit cards, such as low-interest, no annual fee, 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
- 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 credit card transactions and decide which stores and merchants can accept them. In most cases, which card network you use doesn’t matter much.
- On the other hand, card issuers 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.
- Some credit card companies can act as both issuers and networks. The best-known examples are American Express and Discover. These two credit card companies act as lenders and are responsible for processing credit card transactions.
The Importance of Choosing the Right Issuer
Whether you go for Credit One Bank, Bank of America, or some other credit card issuer, it’s essential to be very careful. Your card issuer can help you reach financial stability or put you in debt. Issuers are responsible for accepting or denying your credit card applications; setting your rates, fees, and 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 must ensure they offer 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 fraudulent charges.
Soft vs Hard Credit Inquiries from Card Issuers
When researching other card issuers, you’ll often notice that they advertise 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. Other issuers can look at your basic credit information to determine whether you could 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 credit, this is also considered a soft inquiry. This doesn’t leave a trace on your credit report and won’t affect your score.
RELATED: Soft Credit Pull vs. Hard Credit Pull
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 complete picture of your financial health, and you could still be denied once you 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 leaves a trace on your credit report, and making multiple credit card applications will temporarily damage your credit score.
