Crack open your wallet and pull out your credit cards. We bet there’s a very good chance at least one of them is a Visa or Mastercard. Here’s the difference between them and how to choose the right credit card for you.
Visa and Mastercard: What they have in common
Of the four major credit card networks — which also includes AmericanExpress and Discover — Visa and Mastercard are the top two (by a mile). They have the highest share of credit cards in circulation with 49.7% and 34%, respectively. That leaves Discover with 8.4% and AmericanExpress with 7.9%, according to a 2019 Nilson report.
Not only are Visa and Mastercard widely carried, but they’re also widely accepted by merchants nationally and internationally. Almost everywhere that one is accepted, the other is, too. The few exceptions include cases where businesses have exclusivity deals like Costco has with Visa.
The reason there aren’t many differences between Visa and Mastercard is mainly because neither company issues credit cards. That’s right — Visa and Mastercard don’t actually give out credit cards. Instead, that’s the role of banks and other financial institutions. For example, you might have a Chase Platinum Visa or a Bank of America Mastercard. Discover and AmericanExpress, meanwhile, are both credit card networks and issuers.
The issuers are the ones who control a credit card’s most important features, such as interest rates, penalties and fees, and rewards programs.
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Credit card networks vs. issuers
So what role do credit card networks like Visa and Mastercard play? They authorize and process the transactions that are made on credit cards. They also set the swipe fee that merchants pay when you use a card to buy something.
As the name suggests, credit card issuers actually issue the credit cards. They tend to be credit unions or banks like Chase, Capital One or Bank of America. They approve or reject card applications; collect payments from cardholders; and handle customer service. They also decide the card’s interest rate, credit limit, late fees and perks.
That’s why if you want to find the cards with the best features, it’s better to decide based on which bank is issuing the card, rather than whether the credit card network is Visa or Mastercard.
Visa vs. Mastercard benefits
That being said, there are some differences between Visa and Mastercard. Primarily those differences can be found in the features that each network offers with its own tiers of benefits. Credit card issuers, however, don’t have to offer all of these benefits (or any of them). In some cases, credit card issuers also offer their own versions of these benefits.
Let’s start with Visa, which offers three levels of benefits on its cards:
Traditional: Includes lost and stolen card reporting; emergency card replacement; car rental collision damage coverage; and roadside assistance.
Signature: Includes all the Traditional tier benefits plus extended warranty protection and travel and emergency assistance.
Infinite: Includes all the Signature tier benefits plus return protection, travel accident insurance, trip cancellation and interruption insurance; trip delay reimbursement; and lost luggage reimbursement.
Mastercard also offers three levels of benefits:
Standard: Includes zero liability protection; lost or stolen card reporting; emergency card replacement; and ID theft protection.
World: Includes all the Standard tier benefits as well as enhanced ID theft protection, cell phone protection, concierge services, access to Mastercard travel and lifestyle services; free shipping at certain retailers; and retail discounts.
World Elite: Includes all the World tier benefits plus additional discounts on ride-shares, food delivery and movie tickets.
How to choose between Visa and Mastercard credit cards
Because there aren’t many differences between what Visa and Mastercard themselves offer, it’s more important to choose a credit card based on what the issuer offers. Of course, your credit history will play a big role in the kinds of cards you’re approved for and the interest rates you receive.
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Think about how you use credit cards and which features will benefit you the most. Typically, you might want the card with the best interest rate, but if you never carry a balance, maybe the card’s cash back rewards are more important. Maybe you travel frequently and want a card that will give you points or miles and offer travel protections. Or maybe you’re looking for a card with a 0% introductory APR for balance transfers so you can pay down some debt.
No matter which card you choose, always read the fine print first.
“A credit card can seem like a good deal until you miss one payment and then the fees and interest rates go way up,” says Christopher Viale, president and CEO of Cambridge Credit Counseling Corp.
How Resolve can help
If you’re dealing with debt and not sure what to do, we’re here to help. Become a Resolve member and we’ll contact your creditors to get you the best offers for your financial situation. Our debt experts will answer your questions and guide you along the way. And our platform offers powerful budgeting tools, credit score insights and more. Join today.