Visa vs Mastercard

Visa or Mastercard? What Are the Key Differences?

Publish date September 6, 2018 Views: 547 Comments: 0

Credit cards can be valuable contributors toward your financial health but picking the right one can get tricky. If you’re trying to decide between Visa or Mastercard, know that they are nearly identical and the real differences are the individual benefits that come with specific cards. That being said, it’s worth knowing what the minor differences are between Visa or Mastercard before you choose the card that’s right for you.

Processing Networks and Card Issuing Partners

The first thing to note is that neither Visa nor Mastercard actually issue any credit cards to consumers. Visa and Mastercard are credit card processing networks. As networks, they control where credit cards can be accepted and they process payments between merchants and credit card issuers.

Visa and Mastercard partner with banks and retailers to issue credit cards. Credit card issuers back the card financially and set the terms and conditions including annual fees, interest rates, and late fees. Issuers also define the benefits such as cash back or rewards points. Some banks use an exclusive credit card processing network as their partner while others have multiple partnerships:

Scotia Value Visa CardScotia Value No Fee Visa

Eligibility Criteria:
– Credit score required: fair_good
– Min personal income required: $15000
– Annual fees: $0

Scotiabank uses Visa, Mastercard, and American Express as their credit card processing networks. One of their most popular Visa cards is the Scotia Value No Fee Visa because of its balance transfer feature: cardholders pay 3.99% interest on balance transfers for 6 months. Once this promotional period ends, the balance transfer rate goes up to 16.99%, which is still lower than the industry average of 19.99%.

BMO Air Miles MastercardBMO AIR MILES Mastercard

Eligibility Criteria:
– Credit score required: fair_good
– Min personal income required: $15000
– Annual fees: $0

The Bank of Montreal (BMO) uses Mastercard as its exclusive partner. One Mastercard from BMO that travellers should consider is the BMO AIR MILES Mastercard, which gives cardholders 500 Air Miles after their first purchase. Cardholders also earn 2x the Miles for every $20 spent at participating AIR MILES partners.

How Widely Are Visa and Mastercard Credit Cards Accepted?

Visa and Mastercard are widely accepted around the world. Visa is accepted at over 28 million merchants across 200 countries with cash advances available through the Plus ATM network. Mastercard is accepted at over 30 million merchants across 210 countries with cash advances available through the Cirrus ATM network.

While a majority of merchants worldwide will accept both Visa and Mastercard, some retailers will work exclusively with one payment network or the other. For example, Costco stores in Canada offer their own co-branded Mastercard credit cards and only accept credit payments on the Mastercard network. To be clear, it’s the merchant who decides which types of credit cards they’ll accept for payment. That being said, if you have a specific Visa or Mastercard, it may benefit you to use that card at certain locations.

Best Western MasterCard®MBNA Best Western Mastercard

Eligibility Criteria:
– Credit score required: fair_good
– Min personal income required: $15000
– Annual fees: $0

Best Western properties accept all major credit cards, but it’s in your best interest to always use the MBNA Best Western Mastercard during your stays since you’ll earn 5 BWR points for every $1 spent. Unfortunately there’s currently no co-branded MBNA Visa card.

President's Choice Financial World MasterCardPC Financial World Elite Mastercard

Eligibility Criteria:
– Credit score required: fair_good
– Min personal income required: $80000
– Annual fees: $0

Grocery giant Loblaws owns PC Bank, which issues the PC Financial World Elite Mastercard. With this card, you earn 30 PC Optimum points per dollar spent where President’s Choice products are sold and 45 points per dollar spent at Shoppers Drug Mart. Loblaws discount grocery stores (such as No Frills) only accept Mastercard, whereas their higher end stores accept both Visa and Mastercard. It may make sense to choose Mastercard over Visa depending on where you regularly shop.

Types of Visa and Mastercard Credit Cards

Both Mastercard and Visa offer different tiers of service. Visa offers Classic, Gold, Platinum and Infinite levels while Mastercard offers Classic, World, and World Elite. All levels within both networks provide zero liability protection against fraud.

The Classic service level for both Visa and Mastercard usually don’t have a minimum income requirement for you to qualify for the card. If you’re applying for a Visa Classic/Gold or Mastercard World card, you’ll need a minimum annual income of at least $60,000. Both the Infinite and World Elite class of cards require an income of at least $85,000.

Visa Infinite and Mastercard World Elite include all the perks from lower tiers but also include a suite of premium benefits designed to appeal to high-income consumers.

Despite these different card classifications, in the end, the credit card issuers decide how they’re going to label their credit cards. The only thing that Visa and Mastercard insist on is the minimum income requirement. E.g. if a credit card issuer is going to brand a card World Elite, then applicants must have an annual income of at least $85,000.

Rogers World Elite MastercardRogers World Elite Mastercard

Eligibility Criteria:
– Credit score required: poor_fair
– Min personal income required: $80000
– Annual fees: $0

The Rogers World Elite Mastercard does not have as many benefits and features compared to World Elite cards from other issuers, but Rogers has decided to give the card the World Elite title since it’s their best credit card. With the card you pay the 2.5% foreign transaction fee when making purchases in foreign currencies, but since you get 4% cash back on foreign currency purchases, you actually come out ahead by 1.5%.

Scotia Momentum Visa Infinite Cash BackScotiabank Momentum Visa Infinite card

Eligibility Criteria:
– Credit score required: fair_good
– Min personal income required: $12000
– Annual fees: $39

The Scotiabank Momentum Visa Infinite card is one of Scotiabank’s top Visa cards and comes packed with a ton of benefits, making it worthy of the Infinite moniker. Cardholders earn 4% cash back on gas & groceries and 2% cash back at drug stores and on recurring bill payments. All other purchases earn 1% cash back. You also get a comprehensive travel insurance package which helps justify the $39 annual fee.

Visa vs Mastercard: Bonuses and Benefits

Generally speaking, Visa and Mastercard have similar benefits when comparing the Infinite and World Elite lines. Both come with extended warranty & purchase protection, concierge service, offers from hotels & retailers, dining experiences, and travel insurance.

But some Mastercards have one noticeable benefit over Visa: Mastercard Airport Experiences provided by LoungeKey. These Mastercards allow access to over 600 airport lounges, with some cards providing free individual lounge access passes and others allowing access for a per-visit fee.

Any additional benefits such as the sign up bonus, earnings rate, suite of travel insurance, etc. are determined by the credit card issuer and vary by card.

bmo world elite mastercardBMO World Elite Mastercard

Eligibility Criteria:
– Credit score required: good_excellent
– Min personal income required: $80000
– Annual fees: $150

Recently Mastercard switched its airport lounge access from Priority Pass to LoungeKey. Both programs are nearly identical, but if you use one of your 4 free airport lounge passes with your BMO World Elite Mastercard, you have to use it at a LoungeKey partner. This is one of the best credit cards in Canada since it comes with a sign up bonus of 35000 points (a value of $245) as well as a comprehensive travel insurance package.

Scotia Passport Visa InfiniteScotiabank Passport Visa Infinite Card

Eligibility Criteria:
– Credit score required: good_excellent
– Min personal income required: $60000
– Annual fees: $139

Though Visa itself doesn’t have a partnership when it comes to lounge access, Scotiabank does, and its Passport Visa Infinite card provides six free airport lounge passes annually at Priority Pass lounges. The card has an annual fee of $139, but the lounge membership and passes are worth about $400 alone. As added benefits the card does not charge foreign transaction fees and also provides a comprehensive travel insurance package.

Visa vs Mastercard: Fees and Rates

A card’s fees and rates are usually determined by its issuer, not processor. The only rates that Visa and Mastercard determine are the foreign exchange rates, which are usually comparable to what the Bank of Canada has listed. But keep in mind that many credit card issuers add on a 2.5% fee for any purchase made in a foreign currency.

Visa and Mastercard credit card annual fees can range from $0 to over $150 per year, but that’s again determined by the credit card issuer, not the processor. Generally speaking, higher annual fees translate into more comprehensive benefits, but you may need to have a higher income or credit score to qualify.

A credit card’s purchase interest rate is also set by its issuer, but most Visa and Mastercards have an average rate of 19.99%. Fees and rates are important considerations when choosing a credit card, but you generally need to look at the individual cards and what they offer as opposed to making a assumptions about the cards based on their processor.

Home Trust Preferred VISA LightHome Trust Preferred Visa

Eligibility Criteria:
– Credit score required: fair_good
– Min personal income required: $15000
– Annual fees: $0

The Home Trust Preferred Visa is another credit card that doesn’t charge the usual foreign transaction fee of 2.5%. This means that if you make a purchase in a foreign currency with this card, you’ll be charged at the currency spot rate determined by Visa for the day, without any added fees on top. This makes the card handy to have in your wallet if you plan on travelling abroad or making many online purchases in a foreign currency.

Final Thoughts

Ultimately, there are very few important differences between Visa and Mastercard, and we can’t say that one is clearly better than the other. Visa and Mastercard securely process your payments for your peace of mind. Instead of deciding between Visa and Mastercard, what you should be focusing on is the individual features of each card to determine if it provides the features you need and aligns with your spending habits.

Article comments