Credit card companies in Australia – Forbes Advisor Australia
Credit cards are a widely accepted, convenient, and fairly secure alternative to debit cards, cash, and other forms of payment. Benefits like rewards, travel benefits, and shopping protection make credit cards an even more attractive option for consumers — and that’s what makes credit cards big business.
Credit card companies are credit unions, banks, payment networks, and other financial institutions that issue credit and facilitate card transactions for consumers and business owners. Card issuers are distinct from card networks, although some card networks are also card issuers. Let’s explore the differences.
What are credit card companies?
Credit card companies are classified as payment networks and/or card issuers.
Four major credit card networks dominate the market in Australia: American Express, Mastercard and Visa. Each credit card network — also known as a card association — may work slightly differently, but the basic principles remain the same.
Card networks are working to facilitate the transfer of funds from a cardholder to a merchant. When you shop with a credit card, payment processors use a card network to exchange transaction information between the merchant’s bank (also called the acquiring bank or acquirer) and the financial institution responsible for issuing your card.
A credit card issuer is a bank or credit union that provides the end user, e.g. B. a consumer or small business owner, a credit card directly available. Large banks also often act as credit card issuers in Australia: Commonwealth Bank, Westpac, Macquarie, NAB and ANZ are all card issuers.
Credit card network vs. credit card issuers
While credit card networks facilitate the transmission of information, credit card issuers offer credit cards to consumers and businesses. The card issuer is the entity that determines who qualifies for the revolving line of credit, charges the consumer, and provides rewards. As a cardholder, your primary interaction is with your card issuer (not the card’s network) when taking actions like paying your bill or reporting your card missing.
If you want a Visa or Mastercard credit card, you will need to apply for one through another financial institution such as Commonwealth Bank or Westpac. American Express differs from the other credit card networks because these financial companies also issue credit cards.
List of credit card companies used by Australians
American Express describes itself as a payments service that gives customers access to “products, insights and experiences that enrich lives and drive business success.”
The Company’s payment platform involves issuing cards and operating a payment network. Amex customers include consumers, small businesses, medium-sized businesses and global corporations.
American Express cards are not exclusively issued by American Express, but many of the best Amex cards are.
ANZ – the Australian & New Zealand Banking Group – is one of Australia’s “Big Four Banks”, making it one of the largest financial institutions in the country. ANZ provides banking and financial products and services to more than six million customers domestically and approximately nine million worldwide.
As a banking giant, ANZ offers its customers a range of credit cards for business, lifestyle and personal needs. At the time of writing, ANZ had 10 different cards available, including low interest cards and frequent flyer rewards credit cards.
Bank Australia is a client-owned bank, which means each of its clients is an equal shareholder, regardless of the value of their investments or accounts. The bank also has B Corporation credentials, with the intention of putting both people and the planet at the heart of its operations.
Bank Australia offers its customers a range of credit cards with competitive prices and no late payment fees.
Citi’s 200 years of banking and financial asset management expertise doesn’t translate to two centuries of credit card experience, but Citi’s credit card offerings are well known among credit card professionals, especially for long introductory APR periods and great rewards.
Commonwealth Bank of Australia
The Commonwealth Bank of Australia, commonly known as CBA or CommBank, is the largest of Australia’s big four banks, serving more than 16.6 million customers. It offers a range of credit cards, including low-fee and Qantas points options, as well as a Neo card that requires a simple monthly fee in exchange for a 0% annual interest rate.
The ING Group is a multinational banking and financial services company headquartered in The Netherlands with a wholly owned subsidiary ING Australia established in 1999.
Currently, the bank only offers two types of credit cards: a low-rate option in the form of a Classic or Platinum card, depending on approved credit limits, and an Orange One Rewards Card, which offers cash-back rewards.
Macquarie Bank is another of Australia’s largest banks and, with its rising market capitalization dwarfing some of the Big Four banks, may have been singled out as the key game changer that will create the ‘Big Five’.
With its growing market capitalization and user base, Macquarie offers three different types of credit cards: Macquarie Black Card with Macquarie Rewards, Macquarie Platinum Card with Macquarie Rewards, and Macquarie RateSaver Card with Low Rate.
As of January 2022, NAB – National Australia Bank – was listed on the ASX 200 with a market capitalization of $96 billion. NAB serves 8.5 million customers in Australia and overseas and offers eight different types of credit cards to its customers.
These include the standard offers with no interest, low fees, low prices and rewards, and a credit card in partnership with Qantas to offer customers bonus frequent flyer points with the airline.
Suncorp Bank offers its customers three credit card options: Standard, Gold and Platinum. Although purchase rates, interest-free periods, and reward offers all vary, each Suncorp credit card has a consistent cash advance rate of 21.99% pa
Westpac was Australia’s first bank, founded in 1817 as the Bank of New South Wales. In 1982 the bank was renamed Westpac Banking Corporation and at the time of writing has 14 million customers worldwide.
Westpac is one of the big four banks and offers its customers 10 different credit card options depending on individual requirements and qualifications.
A credit union is a member-owned financial institution that, like a bank, lends and offers checking and savings accounts. Unlike a bank, a credit union returns its profits to members. That means you’ll generally find lower interest rates on loans and higher savings rates at credit unions — and a potentially friendlier banking experience, too. Many credit unions offer particularly lucrative reward credit cards. Those interested in being greener or banking more sustainably might be interested in choosing a credit union over a larger bank.
Examples of credit unions that offer credit cards include:
- Community First Credit Union
- Holiday Coast Credit Union
- Macquarie Credit Union
- Police Credit Union
Smaller banks or those with a regional presence also often offer credit cards. Some examples are:
- heritage bench
- virgin money
- ME bank
- bench from us
How do credit card companies make money?
Credit card companies could benefit from consumer transactions by charging consumers fees and charging interest on balances.
Every time you tap, insert, swipe, or click with a credit card, the merchant is charged a transaction fee to conveniently accept the payment. This payment is often factored into the cost of the goods or services you purchase and ranges from 1% to 4%. Some providers pass this fee directly on to consumers. In any case, the card networks make money from transaction fees charged to the seller for the convenience of accepting credit card payments and indirectly to the consumer through a cost markup.
An interest rate – often referred to as the Annual Percentage Rate (APR) – associated with your use of a card varies depending on the lender and your credit rating, and is usually charged with each balance on the card. Interest charges allow lenders to profit if you don’t pay your bill on time. To avoid interest costs, you can pay each billing period on time and in full. The grace period (usually a settlement period) prevents interest from accruing.
Credit card issuers may charge annual fees for cards that offer premium rewards or for cards that are advertised and designed for people with poor credit scores. Annual fees can be extremely expensive, especially for the highest quality perk cards.
Other Fees and Charges
Card issuers may charge cardholders late fees for non-timely payment, cash advance fees for withdrawing cash from an ATM using a card, balance transfer fees for transferring the balance of another card, foreign transaction fees for purchases made outside of Australia, or over-limit fees if a cardholder spends in excess of a credit limit. All of these fees allow the card companies to capitalize on the financial needs of consumers.
There are many credit card options, but almost all work on one of the three major networks: American Express, Mastercard, or Visa. Countless card issuers issue revolving credit accounts and lend money to consumers through credit cards in one form or another. Lucrative rewards and loyalty programs can be part of many of these offers to entice consumers into using credit cards, but credit cards also come with a lot of responsibilities. Be aware that late or missed payments or maintaining a balance for a long time can be costly.
frequently asked Questions
What Are the Big Four Credit Card Companies?
The four major credit card networks are Visa, Mastercard, American Express and Discover; However, Discover is not an accepted card in Australia.
The four largest banking institutions in Australia are NAB, ANZ, Westpac and Commonwealth Bank.
Commonwealth Bank and Westpac both use the Mastercard network, while NAB and ANZ use Visa.
Can You Get a Credit Card With Bad Credit Debt?
How high is credit card debt in Australia?