Credit cards are an important, even necessary part of a consumer’s personal finances. They allow their cardholders to more securely shop stores online – anywhere in the world, and make purchases in the local mall with convenience and security.
And for you to make the most of the benefits credit cards offer, you should understand the credit card industry’s two main components: credit card companies, and credit card issuers.
Credit Card Companies
VISA and Mastercard are credit card companies. They are in the global business of process payments, and innovating technology to increase the securely of their business.
Credit Card Issuers
Typically, financial institutions with lending arms are credit card issuers. However, any qualified organization with money to lend can issue their own credit cards, through a credit card company. The industry principle – credit card companies use credit card issuer money to pay merchants in full when you make a purchase. This allows you, the customer, to make monthly payments to your credit cards company, who pays the credit card issuer interest for employing their money.
Credit card issuers compete for business by offering new customers promotional deals that include low introductory rates on new purchases, and short-term interest rate discounts on balance transfers.
A short-term opportunity for you to possibly consolidate your credit card debt, and lower your monthly payments.