The plastic money is part of our daily lives. We need it for our purchases, credit scores and so on. These credit cards are issued by financial institutions such as banks or credit unions etc. What do these credit cards give to these institutions?


  • Credit cards generate stable income to the credit card companies.
  • Such income is accumulated through processing fees, account maintenance fees, Interest or late payment charges and annual fees that are charged to the credit card holder.
  • For any financial institution, customer relation is very vital for surviving and credit cards help these institutions to maintain a regular and active relationship their customers. These institutions use their existing customer contacts to cross-sell or promote other nation 21 loans financial products.
  • The merchandise tie-ups wit  h the credit cards prompt the customers to make purchases at their favourite outlets. The more purchase the customer makes, these institutions gain more revenue.
  • The banks and credit unions also offer a host of timely benefits and rewards for their long-standing customers. These are incentives to make the customer stay with the bank and continue using their financial products.
  • Credit cards are also offered to long-standing customers who have a good amount of money invested in the banks. To the elite customers, credit cards are given as fringe benefits with no processing fee and low-interest rates.
  • Credit cards help banks and credit unions to maintain their customer base and reputation. The reputation of any financial institution is profitable to the shareholders.

How do the financial institutions issue credit cards?

In a financial institution, an underwriting team deals with the most important process, the credit card application process. They assess all the applications based on the accuracy of the personal information, income, financial history and credit worthiness. Each application is evaluated based on the risk factor and revenue potential.


Types of credit cards issued by the credit card companies

Credit cards are extremely customised and have many categories. They are based on a variety of customers such as students or immigrants, professionals, entrepreneurs and so on. The credit cards are also based on a multitude of features such as interest rates, qualifications and reward, etc. It is very difficult to select the credit card that meets your requirements. However, one can certainly compare and choose between many categories.

  1. Credit cards for mainstream consumers

This category includes all those “regular credit” cards. These credit cards differ based on the financial institution that is providing the card, and credit lines along with other factors. These credit cards also form the major part of the total credit card numbers.

  1. Credit cards for students

Banks and financial institutions target these smaller but unique group as they have better-earning potential in the future. This can help a bank or credit to create a strong building block for the future investments. Though these cards are offered on a short-term basis, students often reap better rewards and benefits than mainstream consumer credit cards. They are also protected under consumer rights.

  1. Credit cards for entrepreneurs

Entrepreneurs have unique requirements. The cards offered to them are usually customised, and the rewards are often related to either office supplies or other office-related services. The entrepreneurs get big credit lines in comparison to the previous categories of credit cards. These cards are issued to those who run a business can take a fund help and can provide a tax ID number or Employer ID with their social security number. These cards are not covered under consumer protection, and the business owner will be held liable to the credit.

How do credit card companies evaluate the applications?

Credit card companies look for minimal risk factors and maximum profits when evaluating an application for a credit card. They consider:

  1. Creditworthiness

In the application process, our credit reports are checked to know about our repayment abilities and history. This process helps these credit card companies to analyse our performance as a credit card holder. They take every factor into consideration such as spending habits, repayment history and personal information. A good financial history and accurate personal information can put one in line for better interest rates and better credit and if someone is not finding credit sources for bad credit personal loans then inspiration fund can help them The one with the bad credit scores is presented with many credit card options that can help to rebuild his or her credit. But usually these cards will have higher interest rates.

  1. Income and repayment ability

It is legally recommended that credit card companies should check the income and asset of the applicant. By assessing their total income and assets their repayment ability is decided. The banks and credit unions require the applicant to have the ability to pay a monthly instalment on time.

  1. Other debts

Income and asset are only one side to a person’s financial status. The other side is to check debts and liabilities. Any payable amount has a direct impact on the repayment ability.  His or her debt repayment ability reduces if they have many debts or a huge credit.

What are credit card features?

Credit card features are those factors that make them distinct from the rest. It could be the rewards and benefits or interest and other charges.

Rewards and benefits

These features promote spending behaviour in a customer. And also they help to attract new customers. The rewards could be based on daily domestic purchases such as earning points when one shops for groceries, pharmaceuticals, cosmetics or gas. These rewards can be redeemed in the form of gift vouchers or coupons. Some credit card companies also offer gifts based on various points.

Fees and charges

Every credit card differs when it comes to the fee structure. The fees could include annual charges, processing charges, foreign exchange fees, balance transfer charges and so on.

Interest rates

Interest rates vary based on the type of credit card. A credit card used for a balance transfer is charged with a different interest rate than a generic card. Many people base their credit card choices solely based on interest rates.


Other features

Apart from these credit cards there are other types that are offered to a specific group of people or entities.

  • Credit cards that are connected to companies
  • These cards are provided to target groups such as professionals or employees of a particular company etc. These cards work as a non-monetising incentive to those who are dedicated to their companies.
  • Store credit cards
  • These are specialised cards intended for specific stores or business chains. These are targeted to promote customer’s spending behaviour at a specific store or on a particular business chain.
  • Charge cards
  • These cards require the customer to pay the full balance amount every month.
  • NPSL cards

No pre- set limit cards usually have steady credit lines. These are rarely changed except for economical changes.

How do credit card companies protect customers?

Any financial transaction is vulnerable to thefts and scams. Credit card companies always track all the credit card transactions of their customers to ensure protection from thefts.

  • Credit card companies examine the pattern in the filed complaints. It could be a place or a specific merchant. They make sure to spot the common causes in the complaints.
  • Once the cause is spotted, the customers are notified or alerted through an automated notification system.
  • To increase the safety net some credit card companies provide customised card protection options to customers such as, microchip cards(EMV) to keep the identity unique and private or regular alerts on pre-set purchase limits and so on.
  • The credit card company safeguards the enormous customer data and they can identify any unusual financial practices such as transfer or withdrawals of big amounts within no time.
  • Banks sends regular notifications about flagged retailers or phishing e-mails to alert their customers. Banks depend on their automated system to generate alerts in such cases.
  • In case of any fraudulent event, most of the banks ensure to cover the expenses. But customers may face temporary account suspensions or credit card cancellations.

How can credit card companies help customers?

Credit card companies encourage people to apply for credit cards. This can be a good thing for someone who wants to build up and better his or her credit scores. The credit cards are extremely customised so that one can choose as per their financial needs. These companies guide their customers to select the best credit card.

Credit card companies are financial institutions such as banks or credit unions that gain steady income by issuing credit cards. There are many types of credit cards that are based on many factors such as interest rates and other fees, demography or various credit card companies and their market reputation. Credit card companies often have large consumer data which is protected for safeguarding the interest of their customers and shareholders. The credit card companies also help their customers by alerting them about fraudulent transactions. Credit card companies play a very big role in the economy due to their relevance in the realm of mainstream consumers.