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

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If you’re looking for a new credit card, you might wonder whether Visa or MasterCard would be better for you. To help you decide, the Nerds took a deep dive into the two competing payment networks to see how they compare.

The first thing to understand is that neither Visa nor MasterCard actually issues or distributes credit cards. The cards themselves are issued by banks. Visa and MasterCard are networks that process payments between banks and merchants for purchases made with the cards.

With that in mind, Visa and MasterCard probably have fewer differences than you think. Both payment networks offer cardholders added perks such as rental car insurance, fraud security and payment protection. When it comes to deciding on Visa vs. MasterCard, it’s usually more important to consider what the issuing bank is offering in a credit card — such as rewards, cash back or a 0% balance transfer deal — than what the payment processor includes.

Differences between Visa and MasterCard

As far as consumer appeal goes, Visa and MasterCard share a lot more similarities than differences. Both offer multiple tiers of benefits. The higher-level offerings generally include discounted travel and vacation bundles.

Visa’s two levels. Visa offers two levels of benefits: base level and Visa Signature. Most of the company’s base-level cards come with auto rental collision damage coverage, extended purchases warranties, unauthorized purchase coverage, emergency assistance and urgent card replacement. Visa Signature cards include all of the base-level offerings, as well as a 24/7 concierge service and an online portal that gives cardholders access to discounts and special access to entertainment, sporting events, dining and travel.

MasterCard’s three tiers. MasterCard offers three tiers of benefits: base, World and World Elite. The base package offers perks similar to Visa’s. These include auto rental collision coverage, fraud liability protection, emergency travel assistance, card replacement and extended warranties. MasterCard offers one notable service that Visa does not: price protection. If you buy an item with a MasterCard and the price is reduced within 60 days, MasterCard will cover the difference, though there are exclusions.

Nerd note: Although Visa itself doesn’t offer purchase protection, some card issuers that transact through Visa do offer security on price changes.

MasterCard’s World level includes additional perks such as a dedicated personal travel advisor (similar to Visa Signature’s concierge), longer price protection (120 days) and added amenities at certain hotels (such as complimentary breakfast, late checkout and room upgrades). World Elite, MasterCard’s top level, comes with all the benefits of the lower levels and tacks on discounted service at participating rental car companies, reduced prices on airfare and access to the World Elite Cruise and Vacations programs guide, which provides price cuts on cruises and other package trips.

Do the differences matter?

When you compare credit card benefits to reach your decision, it’s generally more important to compare perks from the issuer rather than those from the payment processor. Perks offered by credit card issuers (such as Chase, Citi, Capital One, Bank of America and Wells Fargo) typically including features like cash back, rewards points and, often, substantial sign-up bonuses.

A sampling of Visa cards and MasterCards

The Capital One® Venture® Rewards Credit Card falls under the Visa Signature umbrella and offers an unlimited 2X miles per dollar on all purchases, which makes racking up miles as easy as swiping your card. Plus, there’s no need to track rotating reward categories. Miles never expire and can be redeemed for flights, hotels, rental cars and more through the card’s travel platform. You can also redeem rewards in any amount for travel purchases already made using Capital One’s Purchase Eraser tool. Just find the expenses on your statement and designate how many miles you’d like to use. (Points must be redeemed within 90 days of the purchase being posted to the account.)

For new cardholders, the Capital One® Venture® Rewards Credit Card comes with a generous signup 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. With an annual fee of $0 intro for first year; $59 after that, and the benefits of Visa Signature included, this card is a good choice for people seeking a no-hassle card that makes traveling more affordable.

Though not a Visa Signature card, the Chase Freedom® caters to spenders who want a higher rewards rate on rotating categories. This card earns up to 5% cash back per dollar (up to $1,500 in spending) on categories that change every quarter. These have historically included groceries, restaurants, gas and various retail outlets. All other purchases earn an unlimited 1% back.

Along with the card’s high cash-back return, new cardholders also get a sign-up bonus: Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening. And it comes with a $0 annual fee. If you’re a smart spender who remembers to opt in to the quarterly Chase Freedom® bonus categories, this card could have you earning big cash back.

If you’d prefer a card with the World Elite MasterCard stamp, the BuyPower Card from Capital One® -Get The Card That Helps You Get The Car is an option to consider. This card allows users to earn points redeemable toward the purchase of a new Chevrolet, Buick, GMC or Cadillac vehicle. Every swipe up to $5,000 in spending earns 5% back, with every additional purchase earning an unlimited 2% after that.

Along with the perks tied to the World Elite MasterCard program, the BuyPower Card from Capital One® -Get The Card That Helps You Get The Car’s annual fee of $0 makes this card a solid choice if buying a car is in your future.

The bottom line on Visa vs. MasterCard

For some people, choosing Visa or MasterCard may provide a minor feature or two that acts as an added convenience. But most people would be better off spending time comparing what issuers offer, such as cash back and rewards earnings. This is where you’ll find the most value per dollar.

Kevin Cash is a staff writer at NerdWallet, a personal finance website. Email: kcash@nerdwallet.com. Twitter: @kevin_cash.


Image via iStock. 

 

  • 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