ADVERTISER DISCLOSURE

Visa Credit Cards vs MasterCard – Does it Make a Difference?

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. Here's how we make money.

If you’ve ever turned on a television or opened a magazine, you’ve probably seen advertisements for MasterCard (Priceless) and Visa (Life Takes Visa). But what do these companies actually do and what’s the difference, anyway?

MasterCard and Visa don’t issue credit cards

First, it’s important to understand that MasterCard and Visa do not issue credit cards.  Instead, they make money by processing transactions between your point of purchase and your bank. They have nothing to do with your rewards programs, interest rates, late fees or customer service issues. Simply put, they are payment networks that connect merchant payment terminals with your bank’s credit card department. Because millions of merchants accept huge amounts of credit card purchases every day, banks prefer to use one of these third party networks to process credit transactions.

So should I get a Visa or MasterCard? And does it matter?

Though networks have nothing to do with fees or rewards, they arrange most non-reward “perks.” Your bank (Chase, Bank of America, etc.) is in charge of things like cash back programs and airline miles. But the networks (Visa, MasterCard, Discover, etc.) add perks like fraud protection, car rental insurance, travel insurance, purchase protection and more. When choosing a network, you need to determine which offers the most generous and relevant perks. Visa and MasterCard are pretty similar, but Visa is just a little better. Its advantage is twofold. First, Visa has better “Loss of Use” coverage on car rental insurance. Second, MasterCard offers “Return Protection” on very few cards, whereas Visa Signature offers the service broadly. With exclusivity arrangements falling by the wayside, you are now more likely to be given a choice between networks when approved for a credit card. If your choice is between Visa and MasterCard (and it often will be), we recommend Visa, especially if the card falls under the Visa Signature category.

Visa highlights:

Capital One Venture Rewards Credit Card
Apply Now

on Capital One's
secure website

Capital One® Venture® Rewards Credit Card cards offer some pretty awesome perks on top of your bank’s rewards program. Take the Capital One® Venture® Rewards Credit Card card for example. Deemed Money magazine’s “Best Rewards Card if you aim to rack up airline miles,” it has an impressive flat 2% rewards rate on all purchases. You receive a sign-up bonus: Enjoy a one-time bonus of 40,000 miles once you spend $3,000 on purchases within the first 3 months, equal to $400 in travel. You never have to worry about blackout dates, and there are no limits or expiration dates on miles. The card’s Signature status piles on even more benefits. You are granted 24-hour complimentary concierge service, lost luggage reimbursement, purchase security, travel and emergency assistance services, roadside dispatch and more.

Chase Freedom Credit Card
Apply Now

on Chase's
secure website

Another Visa favorite is the Chase Freedom®. Though not actually a Visa Signature, it’s much more accessible than the Capital One® Venture® Rewards Credit Card as it has a $0 annual fee and has a really great signup bonus: Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening.  The card gives a whopping 5% back on categories that change every three months. These can include gas, groceries, hotels and dining out. Plus, you earn 1% back on everything else and get access to the Chase Ultimate Rewards Mall, which earns significant bonuses on online shopping at stores ranging from Express to Ralph Lauren to Starbucks.com.

MasterCard highlights:

The Barclaycard Arrival Plus™ World Elite MasterCard® is like the Capital One® Venture® Rewards Credit Card, but possibly better. It offers 2.2% rewards on every dollar spent when you redeem your rewards for travel – 2 miles earned per $1, and 10% of those miles credited back to your account when you redeem as a statement credit against any travel expense. There’s no foreign transaction fee, and the $89 - Waived first year annual fee, is offset by a strong bonus: Earn 40,000 bonus miles when you spend $3,000 or more on purchases in the first 90 days from account opening. Finally, it’s a World MasterCard, which comes with cool perks like trip cancellation insurance, extended warranty and travel concierge services.

The Citi Simplicity® Card is pretty much the best low APR/balance transfer offer out there: 0% for 21 months on purchases and balance transfers, and then the ongoing APR of 12.99% - 22.99% Variable . But what sets it apart is that it has neither a late fee nor a penalty APR, so you won’t see your interest rate jacked up to 30% if you miss a payment. It’s ideal for anyone who needs to make a big purchase and pay it off over time, or for anyone who’s already got some credit card debt.

Other Networks

Of course, Visa and MasterCard aren’t the only networks out there. Discover and American Express are the main competitors. Generally, Discover offers the worst perks (no purchase/return protection, no loss of use coverage on rental cars, and no concierge services). American Express has the best perks but is not, unfortunately, as widely offered or accepted as Visa or MasterCard. American Express has better insurance coverage on both return and purchase protection and offers the same protection on all cards—not just premium offerings. For a good American Express rewards credit card, check out the Starwood American Express. It offers big earnings on hotel stays and some great signing bonuses. But if you’re like most people, you’ll stick with the big guys—Visa and MasterCard—simply because they are so universally accepted.

  • Allie Kat

    Discover has purchase and return protections.

  • Allie Kat

    American Express Everyday. Great rewards, great service, great perks.

    • Guido Sarducci

      And a royal pain in the a** 90% of the time. Had been a “member” since 1972 and went paws up last year. What a joke!

      • Allie Kat

        I’ve had AMAZING experiences with Amex… YMMV

  • Aaron Lip

    Your bank pays you 1% to borrow money… The credit card allows you to borrow money, but many cards pay you back in rewards for use. Credit cards can give you significant returns on expenditures, at the expense of putting you at risk of high rates. Used well, they can mitigate expenditure and improve your quality of life.

    To simplify payment systems, one reduces options. Without options, strategies bringing success become limited and overall diversity is reduced. You don’t use credit. That works for you. It’s simple. No need to infringe on the rights of others by suggesting they need to abandon complexity.

    It’s the same issue I have with religious people; they have their beliefs, but shouldn’t be implying mine are wrong by trying to change them.

    • Cockie Sunburn

      I might have been a bit one-sided in my previous posts, so I get where you’re coming from. I do share your hate of ‘I’m right and you’re wrong’-like discussions. Also: do whatever you want.

      Theoretically though. Seeing the financial trouble many people are in, the incredible complexity of financial solutions and the (still!) stubborn, profit-minded banking culture, I think many people would profit from a more simple system that doesn’t involve high risks.

      But maybe that’s just me.

      • Aaron Lip

        True, most people think they’re the exception. Credit cards can be an asset, but generally aren’t worth the risk for most. People such as I use them for large expenses they can already pay for with debit. I don’t really need the card tbh, aside from universities refusing to accept visa debit.

        Banks are a business; they’ve got to be profit minded to survive. Credit unions, not so much.

        Probably the simplest system is bartering. It has some headaches of its own. There’s also stuffing bills in mattresses/burying it.

        Simple systems are great when they work efficiently and allow you control. By nature, banks cannot; you don’t technically own the money in your account. You own rights to a portion of the bank’s money. Should the bank collapse, you own nothing.

  • Rotary Rocket

    That isn’t correct because it’s not just the balance but the potential balance you could have. Say you loose your job you are very likely to max those cards out while you are working on restoring your income. Risk management know this and factors that in. Marketing will down play this fact to increase there penetration.

    I been present in many a meeting where I watched this play out between the groups first hand. It’s also apparent when you fill out a home loan, where they ask for to list all your credit line with their balance and limits.

    • typeav

      Like I mentioned before, there is no negative impact on his credit or Fico Score, what you are referring is credit decision and this depends on many factors. For example what is his income ? Does he have his own business or is he a contractor ? Not everybody is on 9-5 and what are his assets ? Not everybody is broke either. What are the credit line on each card $250 or $10k or $50k. In first place he is not applying as per his question he just want to get rid off his cards. He can cancel anytime no problem but he can also let them expired and will look much nice on his credit report.

  • Shweta Chawla

    I have a VISA credit card issued in India, and I am travelling in US, the cards works fine here. I want to find out if the sign of VISA still covers the car rental insurance…SInce thats the catch the rental is cheap but the insurance kills you. Would be thankful if any answers this… Regards
    Shweta

  • jose

    Netspend