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 specific grocery stores, restaurants, gas stations 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 $150 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.
(Updated Oct. 10, 2015)
Image via iStock.