Should you choose Visa or MasterCard?

September 5, 2011 No Comments »

Visa or MasterCard. Does it even make a difference? Here in the United States, many people use the brands interchangeably, as if they were the same company. However the reality is that one has nothing to do with the other. They are completely different companies, operating totally separate payment networks. So are there any reasons you should choose a credit card affiliated with MasterCard versus a Visa? The depends. Let’s take a look at the similarities and differences, both domestically and abroad.

Domestic Differences?

Acceptance: As you probably already know, most merchants in the U.S. who take Visa also take MasterCard. Generally speaking, the acceptance rates for both are equal but there are a few exceptions.

Sam’s Club is perhaps the largest retailer who accepts one type of credit card but not the other. Why do they only accept MasterCard? Because their parent company (Walmart) has negotiated a discount with MasterCard for lower processing fees. Another common scenario where only one is accepted is at big sporting events and concerts. Sometimes Visa or MasterCard will sponsor an event and in turn, only their cards will be accepted for payment.

Benefits: If you look closely, you will definitely notice some differences with the cardholder benefits. For example, compare the extended warranty benefit which is found on their top tier credit cards:

  • Visa Signature: Doubles the original manufacturers’ written U.S. repair warranty up to 1 additional year on eligible warranties of 3 years or less.
  • MasterCard World Elite: The terms of the original manufacturers’ U.S. warranties (of one year or less) may be extended up to one additional year on eligible purchases.

Conclusion? Both offer up to 1 year of extended coverage, but Visa allows you to use it on longer warranties. Therefore something like the Chase Sapphire Preferred (Visa Signature) would be a better choice than the American Airlines credit card (MasterCard version) if you want the best extended warranty possible. You may notice other minute (yet possibly significant) differences with the rental car coverage, travel accident insurance and other included perks, too.

International Differences?

Acceptance: Unlike the United States, acceptance for both can vary greatly in other parts of the world. For example in some European countries, acceptance of Visa is much greater than MasterCard. However where you will probably experience the biggest difference is in Africa. Acceptance of MasterCard is poor in many countries on the continent. In fact, when BankVibe’s founder was in Ghana doing some volunteer work, he had to travel 3 hours away just to find a MasterCard ATM! So before you travel to a foreign country make sure you research which credit and debit cards are most accepted.

Benefits: If you are the holder of a U.S. issued credit card, generally speaking, your international benefits will be the same regardless of which country you travel to. The biggest difference I am aware of is the rental car coverage. All tiers of Visa cards exclude Ireland, Northern Ireland, Israel, and Jamaica. If that’s an issue for you, then something like the American Airlines credit card (the World Elite version) might be worth considering, since the World/World Elite don’t exclude any countries.

But how about people who live in other countries? Will they experience a difference in benefits with Visas and MasterCards issued in their own country? The answer is yes. Both offer different benefits depending on the country where the card is issued.


The biggest differences between the two are outside our borders. If you’re only going to be using your debit or credit card within the US, there are very few differences between Visa and MasterCard. For most people, it probably won’t matter which type they’re using.

However if you do have a preference for one over the other, many cards offer both versions. For decades, MasterCard and Visa forced banks to only issue one type and not the other. Chase was associated with Visa and that was all they could issue. You could only get a MasterCard from Citi for the same reason. However due to antitrust issues, those restrictive policies were overturned and now the biggest banks have to offer you both. For example, this is why you may see a Chase Freedom review promoting both types (sidenote: If you want the best promotion possible, check out this Chase Freedom $200 bonus offer!).

This post was written by Michael, the founder of Credit Card Forum.

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