What's the difference between Visa and Mastercard?
Covered in this guide...
Visa vs Mastercard
The average consumer will find very little difference between MasterCard and Visa. They are both widely accepted in more than two hundred countries around the world. However, neither Visa nor MasterCard actually issues any credit cards themselves. They are both simply methods of payment which rely on banks to issue credit cards using these payment methods. Therefore, the interest rates, rewards, annual fees and other charges are issued by your bank. When you pay your credit card account, you are paying it to the institution which issued your card, not to Visa or MasterCard.
Visa and MasterCard make their money by charging the retailer for using their payment method. A Visa issued by one bank will have little to do with a Visa issued by other banks. There are slight differences with the amount Visa and MasterCard charge banks for things such as, for example, foreign currency conversion fees. However, the two remain competitive on basic offerings.
The battleground for winning customers is in the high-end rewards offered. Platinum cards offered by Visa and MasterCard can provide the cardholder with various concierge and assistance services, as well as exclusive offers for concerts, sports tournaments or similar. These platinum rewards are designed to tempt banks and financial institutions into promoting one or the other to their customers.
Credit cards on the Mastercard network are sorted into three tiers: Standard Mastercard, World Mastercard and World Elite Mastercard. Each tier contains all the benefits and perks of the ones preceding it, as well as added extras. The best benefits are for World and World Elite cardholders. Some common benefits are as follows:
World and World Elite Mastercard credit cards qualify for price protection. If you make a purchase and that item’s price is lowered within 120 days of the purchase, the network will refund you the difference up to a certain amount per claim. It’s important to note not all purchases are covered under price protection. For example, you will not receive a refund on items purchased from an internet site whose primary purpose is not the sale of the item or related items. That disqualifies retailers like Amazon.
World MasterCards also come with concierge services to schedule restaurant reservations and event tickets. Most of these tend to be targeted at high-end and luxury outings, which may not be to everyone’s taste and budget.
Hotels and Resorts
Another notable benefit of World cards is their “Hotels & Resorts” program. If you stay with participating hotel chains you will be given special perks like late check out, room upgrades and complimentary breakfasts. These will vary from hotel to hotel.
Visa has simpler benefit structure which is divided into two tiers: Standard Visa and Visa Signature. Like the standard Mastercard, the base tier in the Visa network doesn't provide any considerable advantages. Visa Signature cards are where most of the network’s benefits take effect. The best among these include:
Lost luggage reimbursement
If an airline loses your luggage on a flight which you paid for with a Visa Signature, you can be reimbursed for an agreed amount per bag. Note that not all cards qualify for the benefit. Each individual issuer can limit this benefit per account.
Signature Luxury Hotel Collection
Through the Visa website, you can get low rates on participating hotels, with some added benefits, as long as you pay for it using the Visa Signature card. Like World Mastercard’s Hotels & Resorts program, you get additional perks such as room upgrades and late check-out. Visa's offer is slightly more powerful, as it includes more hotels – more than 900 throughout the world. Though Visa does not provide price protection, some Visa cards issuers do make that offer, sometimes covering items purchased from online retailers.
Standard Visa and Mastercard Features
There are certain benefits which are provided by both Visa and Mastercard. Some of these benefits have become an industry standard, which issuers expect the networks to provide for their cardholders:
Protection Against Unauthorised Charges
In the unfortunate event that your credit card is used to make an unauthorised purchase, report it to your issuer to have the transactions reversed. In such a scenario, Visa or Mastercard will cover the cost.
Rental Vehicle Collision Damage Waiver
If you rent a vehicle using a Visa or Mastercard, you may be eligible to receive collision insurance for that vehicle. The only catch is, you will need to decline the rental company's collision insurance and pay for the transaction using your credit card. It’s important to read through the fine print for the Collision Damage Waiver the credit card company provides before you choose to rely on it, as there can be subtleties and exclusions which need to be fully understood.
Most purchases on your credit card will qualify for additional refund protection and warranties, which will cover instances of the item being damaged, lost or stolen. The specifics of coverage differ from card to card and can depend on the bank or institution which issued the card. However, most Visa and Mastercard credit cards offer some form of these benefits.
Visa and MasterCard are two of the most popular credit card brands in the world. However, these companies don't issue credit cards themselves.
Banks and other financial institutions issue the cards, setting interest rates and credit limits and sponsoring rewards programs.
When deciding on a credit card, consumers need to take into account the interest rate and features of the card, rather than the brand.
The differences between the credit card companies are subtle, however the benefits and perks they offer can make a difference to the consumer.
Perks might include purchase protection, car rental insurance, luggage protection or extended warranties.
The main difference between credit cards is the perks and incentives. Therefore, the motivation to choose between Visa or Mastercard will come down to the customer’s personal preferences.