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Credit Card Issuing: Everything You Need To Know

If you’ve ever used a credit card, you’ve encountered a credit card issuer–but you may not have paid attention to who that was. Credit card issuers offer credit cards to consumers, small businesses, large corporate businesses or a combination of those three. Their names may or may not feature prominently on the card in your wallet. 

Credit card issuers can include large or small banks or credit unions. American Express and Discover issue cards directly, but Visa and Mastercard do not. Instead, individual card issuers offer cards under the Visa and Mastercard brands. 

What Does It Mean To Issue A Credit Card?

Credit card issuers will provide a variety of services to cardholders. They will:

  • Take credit card applications

  • Review credit histories

  • Approve or decline credit applications 

  • Set credit limits

  • Mails physical cards and renewal cards

  • Facilitate virtual card numbers (if offered)

  • Accept and process card payments 

  • Deliver statements

  • Credit reporting

  • Review credit scores of existing customers

  • Offer and facilitate balance transfers

  • Administer rewards programs and perks

Card issuers also typically handle customer service for the card. If you have a dispute over a purchase you made with your co-branded Southwest Rapid Rewards Visa card, for example, you don’t contact Southwest Airlines to dispute the purchase–unless you have a dispute about airline tickets on a Southwest flight you bought with the card! Instead you contact the card issuer, Chase, to inquire about the purchase and file a dispute. 

However, card issuers don’t handle 100% of the credit or debit card payment process. Instead, several parties are involved, in addition to the issuer:

  1. The merchant bank. This is the bank where the retailer/seller who accepts the credit card gets funds from sales made by credit card. 

  2. The payment network. Visa, Mastercard, American Express and Discover help facilitate card transactions, including foreign currency conversion. In the case of Amex and Discover, they may also issue cards. They also often administer certain benefits, such as extended warranties or rental car coverage. 

  3. Payment gateways and payment processors allow merchants to accept in-store and online payments and provide security functions such as protecting cardholder data. 

Credit Card Issuing Solutions For Businesses

Businesses may be interested in credit card issuing for two main reasons:

  1. To find the best credit card to use in their business. 

  2. To offer a credit card to their customer base. 

Small business owners looking for a new credit card to use for business purchases will want to choose carefully to find a card that best fits their business needs. 

Cost is one important factor so when evaluating credit card offers you’ll want to pay attention to interest rates, annual fees and other fees such as foreign transaction fees. 

Business owners often make large amounts of purchases, and want to earn rewards for those purchases, including cash back or travel rewards. Choose a rewards card with rewards you can actually use. For many businesses, cash back is a good choice, as the business can always use cash! 

Flexible spending limits are also important to many business owners as they can’t afford business interruptions if their cards are declined. 

Some business owners may want to qualify for a business credit card, but don’t have excellent consumer credit scores. (Most major credit card issuers check personal credit.) Or they don’t want to provide a personal guarantee for their business card. 

In those cases, they may need to consider a secured credit card, which requires a security deposit, or a card that will evaluate the businesses’ financial health, and look beyond a FICO score.  

Dash.fi offers up to 3% cash back on your first two months of spend, 10 - 20x higher limits, unlimited virtual cards and advance spend controls. There are no credit checks or founder guarantees. Learn more. 

How Do I Issue A Credit Card Online?

Businesses that want to issue their own credit card will often partner with a financial institution that offers co branded credit cards. These cards prominently feature the name of the business that partners with the credit card company offering the card. Examples of this type of credit card account include:

  • Costco Anywhere Visa Cards by Citi

  • JetBlue Business Card (from Barclays)

  • Alaska Airlines Visa (issued by Bank of America)

  • CapitalOne Walmart Rewards Mastercard

  • Hotels.com Rewards Visa (issued by Wells Fargo)

However, you’ll note that all of the above examples involve large companies that have partnered with major credit card issuers to offer rewards cards. 

What if you have a smaller business or a startup and you want to issue a card? You also have options. 

Smaller businesses, including retailers, may be able to issue their own credit card program by partnering with financial services companies. Private label cards typically can be used with a specific merchant while co-branded cards may be used at various stores. 

For example, Stripe Issuing allows businesses to set up a card program without setup fees. TSYS offers a variety of solutions including co-branded and private label cards for retailers or other businesses, Adyen offers card issuing in the US and other countries. 

Some card issuers also offer virtual card numbers. These allow a cardholder to instantly access the account upon account opening. Virtual cards are also a popular option for managing employee spend and to manage recurring expenses. 

Do Banks Issue Credit Cards?

Many banks, including Bank of America, Chase, Citi, PNC Bank and US Bank, issue credit cards. Credit unions like Navy Federal Credit Union issue credit cards. Smaller banks and credit unions may issue credit cards as well. 

Most banks and credit unions also offer debit cards to their customers when they open up checking accounts (and sometimes with savings accounts). However, debit cards don’t carry the same level of protection as credit cards. Debit cardholders can’t dispute purchases, and if the card is compromised, the cardholder may find themselves temporarily without access to funds they need to make essential purchases. 

Whether you’re trying to find a credit card, or you’re a business that wants to issue a credit card to its customers, understanding how credit card issuing works will help you make an informed choice.

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