So Youve Decided You Want To Open A New Credit Card But How Do You Decide Which Card Is Right For You
There are many options when it comes to selecting a credit card, but one option people tend to overlook is which network the card belongs to. Visa and Mastercard are two of the biggest credit card networks in the U.S. Youre probably familiar with both names, but what exactly are they and how do they differ? Lets take a look.
Where Is Mastercard Not Accepted
Mastercard is generally accepted worldwide, including in over 200 countries and territories and in 150 currencies. However, certain retail locations, such as U.S.-based Costco warehouses, dont accept Mastercard credit or debit cards and take only Visa cards.
In addition, Mastercard, or any other card from another card network, isnt accepted at any cash-only location or as an option to pay credit card bills.
Visa Trades At A 9% Discount To Mastercard Its Biggest Gap Since 2014
+1.27% shares are up 36%. And while analysts expect Mastercard to post revenue growth of 20% for its latest quarter, they predict that Visas revenue rose by just 7.5%.
Part of the variance in stock performance stems from Mastercards big push beyond card swipes and into services. The company has been trying to convince investors that its total addressable market is actually much larger than previously thoughtif you go beyond retail and count the more sizable market of business payments, as well as peer-to-peer opportunities.
Before, we really attacked mostly $45 trillion of retail payments with a sliver of B2B payments, CFO Martina Hund-Mejean said at a recent investor conference, referring to business-to-business payments. And we really widened the opportunity in terms of what we could be doing in the payments industry to $225 trillion.
Mastercards recent acquisition of Vocalink supports that goal. Vocalink enables real-time, bank-account-based payments, and Mastercard sees big opportunity in getting businesses to pay each other this way, rather than by check.
Visa is also working to integrate a big purchase, having bought Visa Europe about two years back, but its still working through some of the operational and logistical aspects of the acquisition.
Analysts are wondering if Visa will wind up back on track with Mastercard once it smooths out aspects of the acquisition.
Also Check: Walmart 12 Month No Interest
Whats The Difference Between Visa Cards And Mastercards
The biggest differences between Visa and Mastercards dont lie within those companies themselves, but with the bank that issues the individual card and the range of features they offer. While there are some minor differences, like the number of countries that accept them, the size of their ATM networks, or the exchange rate they offer abroad, the variations between Visa and Mastercard are not that significant to the consumer.
What About American Express Discover And Union Pay
Due to poor international acceptance, few people would use any of these cards as their primary travel card.
American Express is nonetheless a popular card for mile hunters in many countries. While Visa and Mastercards interchange fees in Europe are capped at 0.2%-0.3% in the EEA , no such rules apply to American Express yet. So in many European countries an Amex is the only remaining option offering any decent credit card rewards .
Although its a bit harder to come by accurate data for American Express exchange rates, it looks like they typically end up somewhere between Mastercard and Visa. See this thread on FlyerTalk and this article on the UK based MSE for some data points.
Read Also: Comenity Ultimate Rewards Mastercard
List Of Merchant Category Codes For Visa And Mastercard
Merchant Category Codes are used to identify the type of business in which a merchant is engaged. Most of the time MCC identifies a business correctly but there are always some outliers, especially when it comes to small businesses. This is a list of codes that comes from Citibank and I saw it posted on reddit.
Payment brands use merchant category codes to classify merchants and businesses by the type of goods or services provided. Payment brands, issuers and acquirers can use MCCs to categorize, track and restrict transactions. These codes are also used to reward the correct amount of points for a credit card purchase, based on the category.
Often, MCCs are recognized by all payment brands however, not all codes are recognized by all brands. Payment brands frequently add, eliminate or change the codes with regularly-scheduled enhancements.
This document shows how merchants code for Visa and Mastercard payments. Most of the codes are the same, but there are some differences as noted by Econ0mist on reddit. Visa and Mastercard differ in how they categorize financial institutions, when it comes to funding accounts. This is important when opening bank accounts and funding with a Visa or Mastercard credit card. You would want to do this to earn free credit card rewards, but if cash advance fees are charged, then it is not worth it.
Mastercard Vs Visa Exchange Rates
There is one difference between Mastercard and Visa that could affect your decision if you are looking for a credit card to take on holiday. When you use a credit card abroad, your money is converted from the local currency into pounds sterling using the payment providers exchange rate.
If you have a Visa card, youll pay the Visa exchange rate and Mastercard holders will pay Mastercards exchange rate.
In general, Mastercard tends to offer a marginally better exchange rate than Visa. That means your holiday spending will be slightly cheaper with a Mastercard credit card than a Visa credit card.
Also Check: Department Store Card
Which Payment Network Should You Choose
There’s not a lot of contrast between Visa and Mastercard, so for most people, it may not matter which one you pick. Rather, focus on finding the credit card that will give you the most bang for your buck through its rewards program and benefits.
If, however, you have a specific need, such as shopping at a specific retailer where only one is accepted, or you want a perk that only one of them offers, it may be better to pick the network that works better for you.
Before you apply, consider using Experian CreditMatch to compare credit cards based on your credit score.
Want to instantly increase your credit score? Experian Boost helps by giving you credit for the utility and mobile phone bills you’re already paying. Until now, those payments did not positively impact your score.
This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.
Mastercard Vs Visa: What’s The Difference
It can be hard to keep straight all of the companies whose logos may appear on your credit card. First, you always have the issuing bank or credit union, such as Chase or Capital One. Then you may have a company that may be co-branding your reward cards, such as United Airlines or Hilton hotels. Finally, you have the payment network that the credit card belongs to, such as Visa, MasterCard, American Express or Discover.
MasterCard and Visa are the most popular networks, and most credit card users find them to be indistinguishable. Although nearly all American merchants that accept one accept the other, there are some key differences that cardholders need to be aware of:
Visa has a network of more than 28 millions merchants, and 2 million ATMs in 200 countries and territories. MasterCard features more than 30 million merchants, but people rarely come across merchants that take one and not the other. In my experience, for example, there was only one occasion where I was able to use a Visa card, but not a MasterCard, which was with a Canadian services company.
Both Visa and MasterCard each offer benefits, but it all depends on which card you have. Different cards frequently offer different benefits, despite being part of the same payment network.
3. Discount programs
Can you choose which network your card is a part of?
Which should you choose?
More from Credit.com
Lets Start With The Basics: What Is A Credit Card Network
As we noted in our article on , there are two main players in the credit card industry: credit card issuers and credit card networks.
, like Chase and Citi, approve your credit card application, set your credit limit and interest rates, and take your monthly payments. They also offer rewards and perks that vary depending on the card.
, on the other hand, authorize and process the transactions you make with your card. These payment networks essentially connect cardholders with merchants and banks, allowing for a seamless experience when you use your card at a merchant that accepts it.
include Visa and Mastercard. Interestingly, Discover and American Express are combination companies that issue cards and have their own transaction networks. This article will focus on Visa and Mastercard, since they are the largest networks in the world.
The Difference Between Visa And Mastercard
Visa and MasterCard are the worlds best-known credit cards, and it might seem like theyre one and the same. But there are some major differencesread on to learn what they are!
5 min read
Before we dive into the differences between Visa and MasterCard, its worth explaining what these two companies do. Visa and MasterCard are payment networks that allow for the electronic transfer of funds between banks or other financial institutions and companies. They provide branded payment processing services for credit cards, debit cards, and prepaid cards that banks or financial institutions can then offer their customers.
In this article, well look at the differences between Visa and MasterCard. Well cover how widely theyre accepted, how many ATMs they offer, how many businesses accept them, and more.
Recommended Reading: Who Is Walmart Credit Card Through
What Is The Difference Between Visa And Mastercard
Visa and Mastercard are secure payment networks that manage and process payment transactions when using a debit card, credit card or prepaid card. Visa and Mastercard Differences If you use a debit card or
Visa and Mastercard are secure payment networks that manage and process payment transactions when using a debit card, credit card or prepaid card.
So Where Does This Leave Us
Although Mastercard tend to come out on top most of the time for most currencies, its not always the case. You can use the currency conversion tools of Visa, Visa Europe , and Mastercard to get a sense of which one will be cheaper in your particular circumstance.
However, since the exchange rate is determined based on the date the transaction is posted , its impossible to know your the exact exchange rate beforehand.
If you use a credit card offering rewards or cash back that will usually be a bigger factor in determining what card to use . Or if one of your cards offer no foreign transaction fees, while another charges 3%, you should of course use the former. But all other things being equal, a Mastercard will usually come out ahead on the exchange rate.
Recommended Reading: How Do I Check My Cabela’s Credit Card Balance
Setting Terms And Conditions
The issuing financial institution sets the payment cards terms and conditions, including fees, rewards, and other features. For credit cards, the issuing bank is responsible for underwriting, interest rate structuring, and the full development of rewards programs.
Card issuers can also offer other perks, such as identity theft and fraud protection, car rental insurance, and business purchase discounts. While differences in interest rates, credit limits, rewards programs, and perks are controlled by the issuing financial institution, Visa and Mastercard compete for the co-branded relationship and take part in the drafting of card terms.
Overall, the card payment industry is complex, involving merchants, merchant acquiring banks, issuer banking, network processing, and cardholders. Network processors, and specifically Mastercard and Visa, have the freedom to structure their fees any way that they like. This structuring and reporting is one of the biggest differences between the two largest network processors.
Visa Vs Mastercard Faq
There isn’t much of a difference between Mastercard and Visa when it comes to acceptance. Both card networks are accepted in more than 200 countries and territories. And almost every merchant that takes credit cards accepts both Visa and Mastercard.
But Mastercard does have a slight advantage over Visa in terms of worldwide acceptance. Mastercard works in 210+ counties and territories, compared to 200+ for Visa.
You can learn more from our guide comparing Visa vs. Mastercard.
There are some differences between Mastercard and Visa. But these two major card networks are pretty equal in the categories that matter most to consumers: acceptance and secondary benefits.
Both Visa and Mastercard are accepted in more than two hundred countries. And it is very rare to find a location that will accept one but not the other. Furthermore, both Visa and Mastercard administer certain benefits programs, including rental car insurance and extended warranties. But individual card issuers decide what coverage cardholders receive.
So it doesn’t really matter whether you have a Visa or Mastercard in your wallet. As long as you have at least one of them and your card offers competitive terms, you’ll be in good shape. If you’d like to learn more about the similarities and differences between Visa and Mastercard, including how the best credit cards on each network compare, check out WalletHub’s complete Visa vs. Mastercard review.
Don’t Miss: Valero Gas Card Pre Approval
Visa Vs Mastercard: What’s The Difference
Many or all of the products here are from our partners. We may earn a commission from offers on this page. Its how we make money. But our editorial integrity ensures our experts opinions arent influenced by compensation. Terms may apply to offers listed on this page.
Visa and Mastercard are the two largest payments networks, both of which have billions of cards that bear their label all around the world. If you’re trying to decide between Visa vs. Mastercard, whether you’re looking for a debit card or credit card, know that both are great options.
However, there are a few key differences to keep in mind as you shop around. Here’s the comparison of Mastercard vs. Visa from top to bottom.
The History Of Mastercard And Visa
Modern credit cards began with the Diners Club card in the 1950s in America. Finders Services brought the cards known as charge cards at the time to the UK in 1961. Mastercard dates back to 1966 when the company launched the MasterCharge card. It became known as Mastercard in 1979.
Visa began as the BankAmericard in 1958. The company expanded internationally in 1974 and adopted the Visa name in 1976.
Since the 1970s, both Mastercard and Visa have been central in the development of credit cards.
You May Like: How Do I Check My Cabela’s Credit Card Balance
Does Visa Or Mastercard Offer The Best Exchange Rates
Im not the first person to attempt answering this question.
Peter over at Hungry for Points did an interesting experiment where he among other things looked at when Visa and Mastercard transactions posted , what exchange rates he received, and how they compared to their respective online currency conversion tools.
- Visa often takes a bit longer to post, but when they do they consistently match their published rate for the posting date.
- Mastercard posted faster, but there were small variations in exchange rates even on transactions posted on the same day.
- Although not a statistically significant experiment, Visa ended up being 0.27% more expensive than Mastercard.
His test was for cards based in US dollars, spending in euros. But could it be that theres an opposite effect when spending in US dollars with a card based in euros?
To find out, I plotted the official exchange rates for Visa and Mastercard against the mid-market exchange rate as reported by Google for one month:
I see a few interesting things in the graph:
- The Mastercard rate seems to lag one day behind the mid-market rate, while Visa lags two days behind.
- You usually pay more than mid-market, but you can be lucky and pay a bit less on some days
- Visa is on average 0.30% more expensive than the mid-market rate, while Mastercard averages 0.21% above mid-market.
Which Network Is The Best
For many people, choosing a credit card based on the credit card issuer and the features of the individual card is better than choosing based on the credit card processing network. If most of your transactions will be made in the United States, you wont run into much trouble using a credit card from any of the four major processing networks. However, if you plan to travel internationally, a Visa or Mastercard may be a better option since they have more worldwide acceptance.
Recommended Reading: How To Pay Best Buy Credit Card On App
Antitrust Investigations In Europe
The European Union has repeatedly criticized Mastercard for monopolistic trade practices. In April 2009, Mastercard reached a settlement with the European Union in an antitrust case, promising to reduce debit card swipe fees to 0.2 percent of purchases. In December 2010, a senior official from the European Central Bank called for a break-up of the Visa/Mastercard duopoly by the creation of a new European debit card for use in the Single Euro Payments Area .
WikiLeaks published documents showing that American authorities lobbied Russia to defend the interests of Visa and Mastercard. In response Mastercard blocked payments to WikiLeaks. Members of the European Parliament expressed concern that payments from European citizens to a European corporation could apparently be blocked by the United States, and called for a further reduction in the dominance of Visa and Mastercard in the European payment system.
The European Consumer Organisation praised the action against Mastercard. BEUC said interbank fees push up prices and hurt consumers. BEUC Director General Monique Goyens said, “So in the end, all consumers are hit by a scheme which ultimately rewards the card company and issuing bank.”
In February 2021, following an investigation by the UK Payment Systems Regulator, Mastercard admitted liability for breaching competition rules in relation to pre-paid cards.