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Innovations and Payment Systems

Visa vs. Mastercard: What’s the difference?

They're similar, but not identical. Here's how Visa and Mastercard work and what you should consider before deciding on a new credit card

Summary

Visa and Mastercard are the world’s two largest payment card network processors. Before you decide on the best credit card for you, you’ll need to understand what network processors are and how they work.  

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When you choose a credit, debit or prepaid card, having Visa or Mastercard as the network processor may be the first thing you consider.

After all, either Visa or Mastercard is accepted by almost any merchant that accepts payment cards, so it’s easy to assume that it makes no difference which one you choose.

Visa and Mastercard are very similar, but not identical. Before you decide on the best credit card for you, understand what network processors are and how they work.

See related: How to choose the best credit card: Step-by-step

What are Visa and Mastercard?

Visa and Mastercard are the world’s two largest payment card network processors.

Visa began in 1958 as Bank of America’s first consumer credit card program for middle-class consumers and small-to-medium-sized merchants in the U.S. It expanded internationally in 1974 and became known as Visa in 1976. Today, Visa Inc. is a global corporation, operating in more than 200 countries and territories.

Mastercard was formed in 1966 when a group of banks formed the Interbank Card Association. It was named Mastercard in 1979.

How do Visa and Mastercard work with card issuers?

When you apply for a card, the issuing bank or other financial institution may be partnered with an airline, hotel or retail brand. The financial institution is also a member of a payment card network processor.

If you apply for a Southwest Rapid Rewards® Plus Credit Card, for example, your bank is Chase. Chase determines your card terms and conditions, such as interest rate, penalties, perks and annual fees.

Chase partners with Southwest Airlines to deliver cardholder benefits. As your payment card network processor, Visa authorizes and processes every transaction you make with your payment card. Southwest, Chase Bank and Visa work together seamlessly so you can make purchases and other transactions and receive all the rewards and perks you deserve.

See related: Earn a sign up bonus with the Southwest Rapid Rewards cards

What difference does my network processor make?

If you already have a few debit, credit or prepaid cards in your wallet, you may not even remember which ones are Visa or Mastercard. They seem interchangeable – and in most situations, they are.

A rare exception may be when you’re standing in line at Costco, or at a few other merchants that have exclusive agreements with either Visa or Mastercard. Since 2016, Costco has only accepted Visa cards.

For most of your financial transactions, the financial institution and type of card matter far more to you than whether the payment processor is Visa or Mastercard.

Certain benefits, however, are available exclusively to Visa or Mastercard.

For example, Visa offers roadside dispatch; Mastercard does not. At the Visa Signature and Visa Infinite levels, you also receive a year-end summary, travel and emergency assistance and other travel protections and conveniences.

Mastercard, on the other hand, offers identity theft protection and fuel rewards. At the Mastercard World and Mastercard World Elite levels, you get “Priceless” experiences, hotel stay or rate guarantees and airport concierge services.

See related: Types of credit cards compared

Compare top Visa and Mastercard offers

Visa and Mastercard both divide their card offerings into tiers, with the higher tiers offering more perks and benefits. Visa offers Visa Traditional, Visa Signature and Visa Infinite. Mastercard also has three tiers of card offerings: standard Mastercard, World Mastercard and World Elite Mastercard.

Citi® Double Cash Card

A top Mastercard offering is the Citi® Double Cash Card, available to applicants with excellent credit. You can earn 2% cash back on every purchase – unlimited 1% cash back when you buy, plus an additional 1% as you pay for your purchases. The Citi Double Cash Card has no annual fee and a regular APR from 13.99% - 23.99% (Variable), depending on your creditworthiness.

Citi® / AAdvantage® Executive World Elite™ Mastercard®

If you travel regularly and you’re willing to pay a higher annual fee ($450) for a Mastercard credit card with more perks, take a look at the Citi® / AAdvantage® Executive World Elite™ Mastercard®. You’ll get 2 AAdvantage miles for every $1 spent on eligible American Airlines purchases and 1 AAdvantage mile for every $1 spent on other purchases.

You can also earn 50,000 intro bonus miles if you spend $5,000 in first 3 months and enjoy Admirals Club membership, no foreign transaction fees and your first checked bag free on domestic American Airlines itineraries. As with other World Elite Mastercard credit cards, you receive other benefits such as travel discounts, price protection and extended warranties.

Wells Fargo Cash Wise Visa® card*

If you want a cash back Visa card with no annual fee, check out the Wells Fargo Cash Wise Visa® card. It offers a $150 introductory bonus when you spend $500 in the first three months, plus unlimited 1.5% cash rewards on purchases. You can also get 1.8% cash rewards on qualified digital wallet purchases, like Apple Pay® or Google Pay™, during the first 12 months from account opening.

Credit One Bank® Platinum Rewards Visa

You can get higher cash back Visa rewards if you’re willing to pay an annual fee ($95) with the Credit One Bank® Platinum Rewards Visa. It offers 5% cash back rewards on your first $5,000 of eligible gas, grocery, internet, cable, satellite TV and mobile phone service purchases each year, and 1% thereafter. All other purchases earn you 1% in cash back rewards.

*All information about the Wells Fargo Cash Wise Visa Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. The Wells Fargo Cash Wise Visa Card is no longer available through CreditCards.com.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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