What's the Difference Between MasterCard and Visa Credit Cards?

By Jason Steele. Last updated 14 July 2016. 0 comments

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Have you ever wondered why some credit cards are part of the Visa payment network and some are with MasterCard. Sure, there are other competitors such as American Express and Discover, but Visa and MasterCard dominate the market with approximately 70% of the credit card purchase volume. But for credit card users what's the difference?

Answer: not much

For most purposes, it matters little to cardholders whether their card has the MasterCard or the Visa label on it. Both are accepted at tens of millions of merchants, at over two million ATM locations and in more than 200 million countries.

When Does It Matter?

On rare occasions, you might find a retailer somewhere that only accepts either Visa or MasterCard. For example, Costco’s new partnership with Visa means that only Visa credit cards will be accepted at Costco stores. More likely is that you might want to take advantage of some of the specific cardholder benefits offered by Visa or MasterCard. When a product manager at a credit card issuer designs a credit card, it chooses to participate in the Visa or MasterCard program, or with a competing payment network. And when it chooses Visa or MasterCard, it gets to pick benefits from a menu of options including things like travel insurance and purchase protection. (See also: 4 Surprising Reasons to Always Use Your Credit Card)

For example, most Visa cards offer some form of rental car insurance and extended warranty coverage, but not all do. Many rewards credit cards that are part of the Visa payment network are also part of the Visa Signature program, which offers a range of benefits including concierge service, shopping discounts, and travel deals. (See also: 13 Awesome Credit Card Perks You Didn’t Know About)

Nevertheless, the same is also true with cards that participate in the MasterCard payment network. A basic MasterCard might offer rental car insurance and few other features while a premium travel rewards card will likely be a part of their World or World Elite MasterCard programs, which offers its own list of premium services.

What to Focus on When Choosing a Card

MasterCard and Visa compete so closely with each other, that they end up offering benefits that are largely equivalent. Some credit card users might examine these benefits and find advantages of one over the other, but few of these differences apply to most cardholders. It's much more likely that the real reason for choosing one card over another will be its terms and conditions including the sign-up bonus, rewards for everyday spending, and other benefits not provided by the payment network.

For example, an airline rewards card may offer features such as a free checked bag or priority boarding which are benefits provided by the airline, not the payment network. Likewise, cash back rewards are offered by the card issuer, not Visa or MasterCard. And of course, you should always consider fees such as the annual fee and any foreign transaction fees, which will be imposed by card issuers, not payment networks. (See also: Ask These 7 Questions to Help Choose the Perfect Credit Card)

By understanding the differences between Visa and MasterCard, or lack thereof, you can look past the payment networks and focus on more important aspects of choosing a credit card.

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