Visa and Mastercard Compared

Published: 19th September 2011
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Visa and Mastercard are so dominant in the credit card market that they are synonymous with the term "credit card”. In most cases, when your application for credit card is approved, the first two options of credit card that you will be offered are Visa and Mastercard. Since these two credits cards are the most widely used cards in the world, it is common for users to make comparisons between them and try to find out which one provides better benefits. While the providers of Visa and Mastercard are often seen as business rivals, they actually operate according to a somewhat similar business model. In reality, the differences between one credit card and another have more to do with the bank that issues the card, rather than the credit card company itself.



Visa and Mastercard distribute their credit cards, collect their fees, and pay their debts in the same manner. Many people think that these two companies issue their credit cards, but this is not true. They enter into agreements with banks and give them the right to issue their credit cards. With this arrangement, the banks will be responsible for choosing the benefits and perks that come with the cards. As such, if you receive a Visa card from, say, Citibank, the benefits and perks that you will get are most likely similar to those that are offered with the bank’s Mastercard. In the past, banks were only allowed to issue only one kind of card. However, the advancement of digital payment has enabled credit card companies to create more flexible debt payment methods. This made it possible for both Visa and Mastercard to allow the same bank to issue their credit cards.



If you want to know how the debt on your Visa or Mastercard is passed on and paid, you have to see how the credit card receipt travels. After you have paid for your purchase at a merchant that accepts Visa or Mastercard, the receipt will be deposited at the merchant’s bank. From the bank, it will be sent to the bank that issued your credit card. Upon receiving the receipt, the issuing bank will take a fee from it and then send a fee to Visa or MasterCard. It will also pay the debt and send a bill to you. If you have a Citibank Visa or Mastercard, you will receive a bill from Citibank, and not Visa or Mastercard.



Other than charging fees for purchases made with their credit cards, Visa and Mastercard have another major source of income. They will charge the merchants that accept their credit cards a small fee for every transaction. This is the reason why not every retailer accepts all kinds of credit cards. Nonetheless, since Visa and Mastercard are both so popular, it rarely occurs that only one of them is accepted in a certain location, and the other is not. You will also rarely come across a retailer that does not accept any of the two cards.



The bank that issues your Visa or Mastercard will decide what kinds of rewards you will receive. The cash back, airline miles, and other rewards that you get with your credit card are offered by the bank. Instead of trying to figure out whether Visa or Mastercard is better, you should find out about the benefits that come with the specific credit card that is issued by your bank. Although Visa and Mastercard do not deal with reward schemes, they can offer other important benefits to encourage people to apply for their credit cards. Both of these cards have some standard features, such as fraud protection, as well as additional services. There are also different levels of service within each network. For instance, Visa Signature provides more attractive perks than Visa Classic, but it charges a higher interchange fee. If you take these extra benefits into consideration, you will find that Visa is better than Mastercard. However, it is still the rewards that are offered by the issuing banks that make the real difference.



When comparing Visa and Mastercard, you may want to look at some statistics about the two companies. If you want to choose a credit card that is used by more people, you should opt for Visa. In the year 2009, the number of Visa credit cards in the United States exceeded 270 million in the United States, while there were only about 203 million Mastercard credit cards in the country.



Card acceptance is another consideration that you have to make when selecting a credit card. In 2009, it was reported that Visa cards were accepted by over 30 million merchants in more than 170 countries. Cardholders were able to get cash advances from ATM machines in more than 1.4 million locations around the world. Mastercard, on the other hand, was accepted by more than 28 million merchants in about 210 countries and territories, and its network of ATMs consisted of approximately 1.5 million locations.



Basically, Visa and Mastercard use the same practices to achieve their business intentions, to such an extent that they seem like they are the same company. However, there are still some differences that you can find between credit cards from Visa and Mastercard, but they are not very significant differences. When you are applying for a new credit card, it is more important that you look for differences in the rewards and perks that are offered by different banks. Banks offer attractive packages that can be very beneficial, and you should select a credit card that comes with benefits that suit your lifestyle. For instance, if you need to travel a lot for business or other purposes, you should opt for a card that offers an excellent airline miles reward scheme.



While it is common for credit card users and applicants to compare Visa and Mastercard, it actually does not make much of a difference if you select one or the other. Both companies are known to be very reliable, and they are accepted in almost any place in the world.



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