Visa vs. Mastercard: What’s the Difference? Which Should You Choose?

Susan Shain

Susan Shain | Blog

Jun 05, 2019 | Updated Aug 22, 2019

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When I worked as the office manager for a sea kayaking company, I took a lot of reservations over the phone. Each time, I had to get the client’s credit card number. I’d always start by asking what type of card he or she had, until eventually I noticed a pattern.

If the card number started with 4, it was a Visa; with 5, it was a Mastercard; with 3, it was an American Express.

That observation only led to more questions: Besides the numbers they start with, what’s the difference between Visa and Mastercard? Which is better: Visa or Mastercard? At long last, I decided to dive into the topic — here’s what I learned.

Visa vs. Mastercard: What Are They, Exactly?

Although it’s a common misconception, Visa and Mastercard do not issue credit cards — you wouldn’t, for example, send Visa an application to get approved for a credit card.

Here’s why:

  • Credit card issuers, like Chase and Barclays, physically approve your credit card applications, determine your credit limits and interest rates, and send you statements each month. They also manage rewards programs.
  • Credit card networks, like Visa and Mastercard, act as liaisons between financial institutions and merchants. Each time you swipe your card, it’s the network that processes the transaction. Though they’re often called credit card networks, “payment network” is a more accurate description, because they support debit card transactions, too.

That’s why, even if you get a card from your bank, it’ll still have a Visa or Mastercard logo in the bottom corner. Your bank is the one loaning you the money, in the case of credit cards, but Visa or Mastercard is the one transmitting the information that makes your payment go through.

Visa and Mastercard are the largest payment networks in the world. In the United States in 2017, Visa cards accounted for a whopping 53% of credit purchase volume, according to The Nilson Report, followed by Mastercard (22%), American Express (21%), and Discover (4%).

Discover and Amex are unique in the payment processing world because they wear the hats of both credit card network and issuer. In other words, they issue their own cards and also process their own payments.

Which Is Better: Visa or Mastercard?

So what is the difference between Visa and Mastercard? For the everyday user, not a whole lot.

Both types of cards are accepted widely around the globe, at tens of millions of merchants and in more than 200 countries. On rare occasions, certain merchants will strike deals with certain networks: The most famous U.S. example is Costco, which only accepts Visa cards.

In 2016, Visa accounted for $139 billion of worldwide purchase transactions, trailed by Mastercard with $67.3 billion. Since American Express and Discover aren’t accepted as widely, they only accounted for a fraction of that: $7.2 and $2.3 billion, respectively.

When it comes to Visa vs. Mastercard, you’ll see the biggest differences when it comes to each network’s cardmember tiers. Which tier you qualify for — and which benefits are included — depends on a range of factors, including your income, credit scores, and chosen card. Here’s more information about the differences between Visa Traditional, Visa Signature, and Visa Infinite and Standard Mastercard, World Mastercard, and World Elite Mastercard.

Here’s what Mastercard and Visa have in common:

  • Contactless technologyThis newish feature allows you to tap your card on the payment terminal and go. Both Visa and Mastercard support contactless credit cards.
  • Fraud protections: One of the best features of credit cards (as opposed to debit cards) is $0 liability. If someone makes an unauthorized purchase on your card, neither Visa nor Mastercard will make you pay for it (as long as you alert your card issuer quickly). When you’re shopping online, you can also sign up for additional layers of security, such as Visa Secure or Mastercard SecureCode.

Here’s where you might find slight differences between Visa and Mastercard:

  • Conversion rates: In many cases, Mastercard offers slightly better exchange rates when you make purchases in a foreign currency. Check the rates for yourself with these calculators from Mastercard and Visa.
  • Auto rental collision damage waiver: While many credit cards come with rental car insurance, coverage varies depending on the card network, issuer, and type. Visa, for example, doesn’t set a limit on its loss-of-use coverage, whereas Mastercard may cap it at $500. Here’s which credit cards offer the best car rental insurance.
  • Return protection: When a merchant won’t accept your eligible return, return protection will refund the cost, as long as the purchase was made on your card. Most Mastercards come with this “Satisfaction Guarantee,” which usually offers refunds of up to $250 within 60 days of a purchase. While Visa only guarantees return protection with its Infinite cards, Signature cards may have it, as well.
  • Purchase protection: Bought a new tennis racket, only to have it stolen a week later? This insurance might have your back. Mastercard typically covers eligible purchases for up to 90 days, as do Visa Signature and Infinite cards.
  • Price protection: If you find a lower price for an item soon after you buy it, this feature may refund you the difference. Standard Mastercards typically offer this for up to 60 days after purchase, and Mastercard World and World Elite cards may offer it for up to 120 days. Certain Visa cards offer price protection, too.

With many of these credit card benefits, the fine print is up to the issuer — so be sure to study your particular card’s terms and conditions before deciding to apply.

Is Mastercard or Visa better in Europe? The truth is both types of cards are widely accepted abroad, and are therefore better choices for international travel than Amex or Discover. As noted above, Mastercard may offer a slightly better exchange rate than Visa, but if you don’t travel frequently, it probably won’t make a huge difference. When comparing travel credit cards, look for one that doesn’t charge foreign transaction fees and offers a solid rewards program. For Europe specifically, you also might want to consider chip-and-PIN cards, which work best with the continent’s automated ticket machines.

8 Visas and Mastercards We Recommend

Generally speaking, you’ll find more co-branded Visa cards — with airlines and hotels, for example — and more secured Mastercards, for people with limited or poor credit. But when it comes down to the nuts and bolts, we wouldn’t say there are make-or-break differences between Visas and Mastercards.

So, rather than focusing on the network, we’d recommend focusing on the perks and benefits that each specific card offers. Look for low or no annual fees, high-quality customer service, and easy-to-use rewards.

Before applying for a card, make sure you understand exactly how credit cards work. We’d also advise checking your credit scores and reports.

Here are some of our favorite credit cards that run on the Visa or Mastercard networks.

Best For Visa Mastercard
Limited credit Petal Cash Back Visa® Card Journey® Student Rewards from Capital One® (Review)
Cash back Chase Freedom® (Review) Citi® Double Cash Card - 18 month BT offer (Review)
Travel or dining Chase Sapphire Preferred® Card (Review) Capital One® SavorOne® Cash Rewards Credit Card (Review)
High-end travel rewards Chase Sapphire Reserve® (Review) Citi Prestige® Card (Review)

 

Best for Limited Credit

Key Features

  • Annual fee: $0
  • Credit limit: $500–$10,000
  • Rewards: 1% cash back on eligible purchases; increases to 1.25% after six on-time monthly payments, and 1.5% after 12 on-time monthly payments
  • No foreign transaction fees or late fees (An APR of 15.24 - 26.24% Variable applies)

This unique (and sleek!) Visa card is great for brand-new credit users because it’s possible to get approved without established credit history. Combined with a lack of fees, and a rewards system that incentives responsible card use, it’s a solid choice for a first credit card.

 

Key Features

  • Annual fee: $0
  • Credit line increase: After making your first five payments on time
  • Rewards: 1% cash back on every purchase; if you pay on time, that increases to 1.25%
  • No foreign transaction fees

Despite the name, you can get this intro-level credit card even if you’re not a student. We love that this Mastercard offers cash back rewards, a bonus for on-time payments, and most importantly, a straightforward route to a higher credit line.

Best for Cash Back

Key Features

  • Annual fee: $0
  • Introductory bonus: $150 after spending $500 in the first 3 months
  • Rewards: 5% cash back on rotating categories (up to $1,500 per quarter, then 1%); 1% on everything else

Do you get a thrill out of getting a good deal? Then this card might be right for you. Every quarter, you’ll register to earn a stellar 5% cash back on your first $1,500 of purchases in rotating bonus categories. Recent categories included gas stations, tolls, and drugstores (Q1 2019) and grocery and home improvement stores (Q2 2019).

 

Key Features

  • Annual fee: $0
  • Rewards: 2% cash back on every purchase: 1% when purchases are made, 1% when they’re paid for
  • Balance Transfer APR: 0% for 18 months for transfers completed within 4 months, then 15.99% – 25.99% (Variable)

If you’re not interested in rotating categories — and just want easy-to-earn cash back — this is one of the simplest rewards cards to use. You’ll get 2% cash back on everything; no need to sign up, and no need to track categories. With no annual fee and a 0% introductory APR for 18 months for balance transfers, it might be our favorite cash back card ever.

Best for Travel or Dining

Key Features

  • Annual fee: $95
  • Introductory bonus: 60,000 points for spending $4,000 in the first 3 months
  • Rewards: 2X Ultimate Rewards (UR) points per dollar on travel and dining; 1X on everything else
  • No foreign transaction fees

This is one of the best Visa credit cards for travel fanatics. Not only does it earn valuable UR points, which can be transferred to more than a dozen different airline and hotel partners at a 1:1 ratio, but it also comes with a slew of perks, such as primary car rental insurance and lost baggage protection.

 

Key Features

  • Annual fee: $0
  • Introductory bonus: $150 for spending $500 in the first three months
  • Rewards: 3% cash back on dining and entertainment; 2% at grocery stores; 1% on everything else
  • No foreign transaction fees

This card is a fun choice (and a fun color!). Aimed at foodies, it earns 3% cash back on dining and entertainment, and 2% at grocery stores. Whereas most cards are made for either restaurants or groceries, we like that this card offers solid rewards for both. Compounded with the fact it has no annual fee and no foreign transaction fees, this is a snappy option for anyone who loves living the good life.

Best for High-End Travel Rewards

Key Features

  • Annual fee: $450
  • Introductory bonus: 50,000 points for spending $4,000 in the first 3 months
  • Rewards: 3X Ultimate Rewards (UR) points per dollar on travel (after the $300 credit is used) and dining; 1X on everything else
  • Perks: $300 annual travel credit, Priority Pass Select membership, Global Entry or TSA PreCheck application fee credit, primary car rental insurance

This card is one of a handful of Visa Infinite cards available to Americans — and its exclusivity shows in its rewards and perks. If you have the credit needed to qualify for this card, and travel enough to warrant its annual fee, then the Reserve is a killer choice.

 

Key Features

  • Annual fee: $495
  • Introductory bonus: 50,000 points for spending $4,000 in the first 3 months
  • Rewards: 5X ThankYou points per dollar on air travel and dining; 3X on hotels and cruises; 1X on everything else
  • Perks: $250 annual travel credit, fourth night free, Priority Pass Select membership, Global Entry or TSA PreCheck application fee credit

This high-end card is quite similar to the Reserve, albeit with a higher annual fee and smaller travel credit. Depending on your travel style, that difference might be offset by the fourth night free you’ll get when booking eligible hotel stays with the card. (Starting in September 2019, this benefit is capped at two uses per year.) All in all, the Prestige is worth a look, especially when considering it employs Mastercard’s superior exchange rate.

Wrapping Up

While the cards above are a selection of our favorite Visas and Mastercards, they’re just the tip of the iceberg. If you didn’t see a card that fits your needs, check out the best cards for rebuilding credit, the best cards for balance transfers, and the best cards for gas and groceries.

And remember: Though you’ll see some small differences when it comes to Visa vs. Mastercard, it’s fees, rewards, and responsible credit behavior that matter far more.

Still haven’t found what you’re looking for? See our picks for the Best Credit Cards for a mix of purposes and lifestyles — you’re sure to find the right card for you.
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