Visa vs. Mastercard: What’s the difference?

Male barista accepting a credit card for payment from a female customer in a light-filled coffee shop. Is it Visa? Mastercard? Male barista accepting a credit card for payment from a female customer in a light-filled coffee shop. Is it Visa? Mastercard? Image:

In a Nutshell

Visa and Mastercard are two of the biggest credit card networks in the U.S. Each offers similar perks or benefits on its cards, such as zero liability on unauthorized purchases, but other factors set these credit card companies apart.

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At a glance: Our favorite Visa® and Mastercard® credit cards

Best Visa card for simple cash back Chase Freedom Unlimited®
Best Visa card for balance transfers Chase Slate®
Best Mastercard for simple cash back Citi® Double Cash Card
Best Mastercard for travel rewards Barclays Arrival® Premier World Elite Mastercard®

So you’ve decided you want to open a new credit card. But how do you decide which card is right for you?

There are many options when it comes to selecting a credit card, but one option people tend to overlook is which network the card belongs to. Visa and Mastercard are two of the biggest credit card networks in the U.S. You’re probably familiar with both names, but what exactly are they — and how do they differ? Let’s take a look.

Let’s start with the basics: What is a credit card network?

As we noted in our article on credit card companies, there are two main players in the credit card industry: credit card issuers and credit card networks.

Credit card issuers, like Chase and Citi, approve your credit card application, set your credit limit and interest rates, and take your monthly payments. They also offer rewards and perks that vary depending on the card.

Credit card networks, on the other hand, authorize and process the transactions you make with your card. These payment networks essentially connect cardholders with merchants and banks, allowing for a seamless experience when you use your card at a merchant that accepts it.

Credit card networks include Visa and Mastercard. Interestingly, Discover and American Express are combination companies that issue cards and have their own transaction networks. This article will focus on Visa and Mastercard, since they are the largest networks in the world.

How did Visa and Mastercard conquer the credit industry?

In 1958, Bank of America launched BankAmericard® credit card, the first consumer credit card with a “revolving credit” feature, giving the cardholder the option to either pay off their balance in full at the end of each billing cycle or carry a balance from month to month. This is generally how unsecured credit cards work today.

Bank of America joined with other issuing banks to create National BankAmericard Incorporated. After expanding internationally, BankAmericard decided to change its name to Visa. Today, Visa operates in more than 200 countries and territories. At the end of 2016, there were more than 3 billion Visa® cards around the world and about 44 million merchants who would accept them.

Mastercard was the brainchild of a group of banks that came together to form the Interbank Card Association in 1966. It didn’t acquire the name Mastercard until 1979, but it has since expanded to make up a significant share of the U.S. market. Today Mastercard offers many different types of credit cards, and these cards are accepted in more than 210 countries and territories around the world.

Visa and Mastercard accounted for a whopping 75% of U.S. credit card purchase volume in 2017.

Just how big are these two credit card networks? Together, Visa and Mastercard accounted for a whopping 75% of U.S. credit card purchase volume in 2017, according to a February 2018 study by the Nilson Report. Factor in debit purchases, and their combined market share jumps up to 85%.

With size comes increased capabilities and resources. Merchants and consumers seeking benefits such as purchase protection, zero liability for unauthorized charges and (perhaps most of all) convenience thus tend to gravitate toward Visa and Mastercard.

Visa vs. Mastercard: Which is better?

That’s not necessarily an easy question to answer. Both credit card networks offer wide acceptance and competitive benefits, but let’s try to break it down a bit.

Acceptance

There may be a few significant differences between Visa and Mastercard, but acceptance isn’t one of them. Both cards are widely accepted in the U.S. and in more than 200 countries and territories globally.

Even though both cards are accepted around the world, some banks and countries will occasionally strike up exclusive product partnerships with one or the other. For example, in 2015 National Australia Bank announced a 10-year exclusive contract with Visa.

The good news is that these types of partnerships typically don’t affect your ability to use either type of cards with merchants. Both Visa and Mastercard are widely accepted in Australia.

Technology

When it comes to tech, you won’t find a yawning gap between these two companies. Both continue to innovate new technologies such as contactless payment, more commonly known as “tap and pay.”

Both companies also emphasize security in online shopping, with technologies designed to promote safe online transactions.

Verified by Visa works behind the scenes when you shop online to sniff out when you might not be the one making the purchase. If you use a new device or make an especially large purchase, you may be asked to provide more information to confirm that purchase.

Similarly, Mastercard SecureCode® generates a private code for your Mastercard® account to use when online shopping. Though it works slightly differently than Verified by Visa, both technologies offer an additional layer of security at checkout.

Cardholder benefits

Visa and Mastercard vary slightly in the benefits they offer cardholders.

What really matters, however, is which kind of Visa® or Mastercard® credit card you apply for. Each company offers several tiers of credit cards, with benefits that get more impressive as the tiers ascend.

Here’s a basic breakdown of each company’s tiers based on a few of their cards. Note that the list of benefits for each card below is not exhaustive, but it should give you a good idea of what each tier offers.

Visa

Traditional Visa Signature® Visa Infinite®
Lost or stolen card reporting ✔︎ ✔︎ ✔︎
Emergency card replacement & emergency cash dispersal ✔︎ ✔︎ ✔︎
Auto rental collision damage waiver ✔︎ ✔︎ ✔︎
Zero liability protection ✔︎ ✔︎ ✔︎
Roadside Dispatch® ✔︎ ✔︎ ✔︎
Warranty Manager Service ✔︎ ✔︎
Trip cancellation/trip interruption coverage ✔︎
Lost luggage reimbursement ✔︎
Travel accident insurance  ✔︎

Mastercard

Standard World Mastercard® World Elite Mastercard®
Lost or stolen card reporting with Mastercard Global Service™ ✔︎ ✔︎ ✔︎
Emergency card replacement & emergency cash dispersal with Mastercard Global Service™ ✔︎ ✔︎ ✔︎
Price protection ✔︎ ✔︎ ✔︎
Zero liability protection ✔︎ ✔︎ ✔︎
Free shipping from 140+ online stores using ShopRunner ✔︎ ✔︎
Complimentary professional travel services ✔︎ ✔︎
Complimentary 24/7 concierge  ✔︎ ✔︎
Trip cancellation insurance ✔︎

The verdict

When deciding on a credit card, look at each card individually. Determine which benefits, interest rates and rewards are most beneficial to you, and base your decision on those factors — consider the payment network after that.

If you’re still unsure about which network is right for you, you may want to start with our lists of the best Visa® credit cards and the best Mastercard® credit cards.

What other options do you have?

As we mentioned above, Visa and Mastercard are credit card networks that don’t issue their own credit cards.

Other credit card companies, such as American Express and Discover, issue credit cards and operate payment networks. Both of these companies can offer specific benefits or perks on their cards, and sometimes have exclusive affiliations with particular merchants. Because of the way American Express and Discover operate their payment networks, these credit cards aren’t as globally accepted.

Where are my credit cards accepted?

Bottom line

Visa and Mastercard both have a lot going for them. Each offers advanced payment technology, security features while online shopping, and high global acceptance rates.

So what’s a responsible credit card shopper to do? Instead of focusing on Visa vs. Mastercard, focus on the benefits associated with individual cards.

“There are differences between specific cards … but the uniqueness is driven by the benefits the individual banks (and sometimes their cobrand partners) provide,” says Joe Stanish, co-founder of the budgeting app Honeyfi.

If you start by determining the type of rewards you prefer and the interest rates you can live with, you should be able to find the right card for your wallet.

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Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors' opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when it’s posted.