The four major credit card networks are American Express, Discover, Visa and Mastercard. Here, we explain the difference between card networks and issuers – and what it means for you as a cardholder.
Next time you pull out your credit card to buy a new pair of shoes, a shiny appliance or a cart full of groceries, look at the logo in the corner.
That logo represents the card network, which may or may or may not be the same company as the card issuer. The four major credit card networks are: American Express, Discover, Visa and Mastercard. (Amex and Discover are also card issuers, while Visa and Mastercard are not.)
Here, we explain the difference between card networks and issuers – and what it means for you as a cardholder.
See related: How do credit cards work?
What is a credit card network and how does it work?
When you swipe, insert or tap your card at a checkout, the card network facilitates electronic communication between the merchant’s bank and the card issuer to complete the payment.
The process happens in seconds. During that time, the card network is sending encrypted messages back and forth to verify information – for example, that you’ve got enough available credit to make the purchase and that your card hasn’t been flagged for fraud. If everything checks out, the purchase gets approved.
But that’s not all a card network does. The networks all offer $0 liability for fraud to protect cardholders.
Major networks also offer benefits that automatically come with any card bearing their logo. For example, a card network may provide concierge service, travel insurance, lost luggage reimbursement and car rental coverage.
Card networks also may offer these perks:
- Complimentary 24/7 trip planning services
- Discounts and credits for ride services, food delivery and other services
- Curated “experiences” open only to cardholders
- Hotel and resort deals and hotel stay guarantees
Card networks tend to offer levels of benefits that automatically come with certain types of cards. For example, premium and ultra premium cards within the network tend to have richer perks than standard cards.
See related: How to choose the best credit card
What’s the difference between card issuers and networks?
Some credit card issuers are also credit card networks, while others are not. Major credit card issuers include: American Express, Bank of America, Chase, Citi, Discover and Wells Fargo.
If you’ve got a card from American Express or Discover, then the card issuer and card network are one and the same company. Other issuers partner with one of the other two major card networks, and their cards display both the name of the issuer and the logo of the network. For example, you might have a Citi Mastercard or a U.S. Bank Visa.
So, what does the card issuer do? The card issuer, also known as an issuing bank, determines the details of card terms and interacts with cardholders. For example, the issuer:
- Sets the terms and conditions on the card (APR, late fees etc.)
- Creates the rewards structure and manages the program
- Sends special offers and promos (0% balance transfer deals, etc.)
- Provides customer service and sends a monthly statement
- Collects payments and fees and takes on the risk of default
When you get a card, you may want to pay more attention to the issuer than the network since the issuer will have a bigger impact on your experience as a cardholder.
How do the card issuers stack up against each other?
American Express took the top spot in the J.D. Power 2020 Credit Card Satisfaction Survey, followed by Discover in second place and Bank of America in third. The top two issuers are also networks, so there may be something to be said for a seamless experience.
Mastercard, Visa, Discover and Amex acceptance
So, as a cardholder, does it even matter which card network’s logo is printed on your card? Yes, the network affects whether a merchant will accept your card and also determines some of the benefits and perks that come with the card.
Wondering how the networks compare in terms of card network acceptance? That depends where you’re trying to use your card. Here’s a breakdown:
- Mastercard: Accepted in 210 countries and territories around the world and most U.S. merchants that take credit cards
- Visa: Accepted in over 200 countries and territories around the world and most U.S. merchants that take credit cards
- American Express: Accepted in over 100 countries and at 99% of U.S. merchants
- Discover: Accepted in 185 countries and territories and at 99% of U.S. merchants
Because acceptance varies by location, it’s wise to carry cards from a few networks. So if you have an Amex or a Discover, you might consider adding a Visa or Mastercard to your wallet. That gives you options if a certain network is less commonly accepted where you’re traveling.
See related: How many credit cards should you have?
What benefits do the card networks offer?
The network can affect which perks you get. That’s because many card issuers use packages of perks offered by the Mastercard and Visa networks.
The networks create these bundles of benefits for card issuers to use on their cards, but each issuer may tweak the offerings to add or subtract benefits. So, always double-check the list of perks for a specific card on the issuer’s site before you apply.
Still, it can be helpful to get familiar with the benefits of each of the network programs. While the higher-tier packages are comparable amongst Mastercard, Visa and American Express cards, you will find some differences.
For example, you might be drawn to Mastercard’s Priceless Cities program, which offers experiences online or in different cities, or you might favor Visa Infinite’s discount and $30 credit on chauffeured car bookings.
As you can see, knowing your networks is key. Being network savvy will help to ensure that you get the best perks for you, and have fewer surprises when you go to pay for a purchase.