Credit Card Networks vs. Card Issuers

To choose the right credit card, you have to know the credit card environment first. In the credit card environment, card issuer, and card network- these two terms are used frequently. Most people are confused between these two terms. They think that both mean the same thing.

But these two are actually different and mean two different types of institutions or parties. If you have the wrong idea too, read the article and clear the confusion by knowing the right thing.

Credit Card Networks

Credit card networks are the institutions that control and determine where their credit cards will be accepted and where those won’t be accepted. Besides, these also work to make the transactions between the merchant and issuers smooth.

Credit Card Networks

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The popular credit care networks around us are Visa, MasterCard, American Express, Discover, etc. Credit card networks are in charge of the transaction fees and other related costs that are settled between the merchants and the card issuers.

On the other hand, they don’t have any control over the charges that the users pay, for example- interest rates, annual fees, foreign transaction fees, over-limit fees, and late fees.

Credit Card Issuers

Credit card issuers are the bank or financial institutions which directly provide the card to the customers. They are often called ‘Issuing Bank.’ Some credit card issuers are Chase, Capital One, etc.

Credit card issuers have control over the rules and regulations that are applied to the users of credit cards. Credit card issuers can-

  1. Approving or denying the applications for credit cards
  2. Setting the most rules and regulations that are applied for cad users
  3. Paying for the transactions that the cardholders do
  4. Collecting the payments from the cardholders
  5. Providing customer service to ensure customer satisfactionCard Issuers

A credit card network uses credit card issuers to issue the card to the users or direct consumers. But this is not a must. If the network wants, it can issue cards to the users by itself too.

For example- American Express and Discover are both credit card networks and credit card issuers. These two organizations issue their cards to the users directly by themselves, and no mediator is involved here.

On the other hand, Visa and MasterCard are two credit card networks. These networks have involved credit card issuers like Chase, Capital One, and others as intermediaries to issue their cards to the users.

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