By Keph Senett on August 21, 2024
Estimated reading time: 5 minutes

Visa vs. Mastercard: What are the differences—and do they matter?

By Keph Senett on August 21, 2024
Estimated reading time: 5 minutes

Some people care about which of the two logos appears on their credit card. Here’s why it shouldn’t make or break your choice of credit card.

Image by jcomp on Freepik

A frequent question we hear at MoneySense is: Which is better—Visa or Mastercard? When looking for a credit card, there are all sorts of things to consider. What is the interest rate? Can you collect rewards points or cash back for making purchases? Is there a bonus for signing up, and what perks and benefits does it include? Believe it or not, the answer to these questions is likely not going to depend on whether you go with a Visa or Mastercard. In this article, we’ll lay out the facts and show you why the badge on your plastic probably doesn’t matter.

Mastercard vs. Visa: 4 things to know

1. Visa and Mastercard don’t issue their own credit cards

It might seem counterintuitive, but neither Visa nor Mastercard directly distributes credit cards. Both of these companies are processing networks that partner with card issuers like banks, credit unions and other financial institutions to get their cards to the public. And it’s the actual card issuer, not the processing network, that sets most of the terms regarding interest rates, rewards and annual fees.

2. Visa and Mastercard are processing networks

As processing networks, both Visa and Mastercard handle a lot of the behind-the-scenes work that allows your payments to be processed. In other words, these companies provide the technologies and networks that power your transactions. When you make a payment against your credit card balance, you are not paying either Visa or Mastercard—you’re paying the card issuer.

3. Both are widely accepted

Visa and Mastercard are both widely accepted at Canadian retailers, with a few exceptions. Costco, for example, doesn’t accept Visa in stores (however, you can use Visa at Costco.ca).

4. Whether a credit card is a Visa or Mastercard really shouldn’t impact your choice

In the vast majority of cases, the processor—Visa or Mastercard—is immaterial to your choice of a credit card. Your best practice is to compare each credit card option on its own merit, paying attention to details on the interest rate, rewards or cash back, welcome bonus and additional perks. From there, you should choose the credit card that best aligns with your particular spending habits and offers benefits you will use. This selection process can be extended to financial institutions as well. The best choice for you may well come from a bank, credit union, or possibly even a retailer, and you should be open to all of these card options even if you don’t hold any other accounts with that lender.

Mastercard vs. Visa: What are the differences?

The differences between Visa and Mastercard are negligible and likely won’t make or break your decision about which card to use. However, there are a few slight distinctions readers should know about.

1. Acceptance

The vast majority of Canadian retailers accept both Visa and Mastercard. That said, Costco accepts Mastercard only for in store credit card payments. If you’re a regular Costco warehouse shopper, you might want to consider carrying a Mastercard.

2. Benefits

While most benefits and perks are set by the card issuer, there are some cases where the processor has an influence. For example, when it comes to airport lounge access, Visa works with the Priority Pass program while Mastercard offers membership in their proprietary Mastercard Airport Experiences. Other areas to investigate include concierge services, and the terms and conditions related to the liability insurance and fraud protection a card provides.

3. Card tiers

You may have seen some Visa cards include “Infinite” or “Infinite Privilege” in their names, and some Mastercards include “World” or “World Elite.” These tiers are meant to communicate that they are premium cards, offering added perks and benefits. They also carry higher income requirements and annual fees.

Visa Infinite cards offer discounts at eligible partner hotels, access to Visa concierge service, up to 12 types of insurance and, sometimes, membership and access to Priority Pass airport lounges. Infinite cards usually have annual fees of around $120 and a minimum personal income requirement of $60,000. Infinite Privilege cards are the most premium in the Visa line, with all of the benefits of the Infinite series plus additional perks for airports, hotels, wine and fine dining. These benefits are reflected in the annual fee—a hefty $399—and in the minimum income requirement of $200,000.

Mastercard’s tiers are called World and World Elite. Mastercard World cards typically carry a modest annual fee of around $99 and have a minimum annual personal income requirement of $60,000. World cards offer extra travel insurance, plus entertainment perks through their Priceless program. In the top tier, Mastercard World Elite cards add to these perks additional insurance coverage, membership to Mastercard Airport Experience Lounges, and Boingo Wi-Fi memberships. World Elite cards tend to charge $120 to $150 in annual fees, and applicants must be able to show $80,000 in annual income.

Explore your options with Visa and Mastercard

When deciding whether to go with a Visa or Mastercard, the bottom line is the things that matter—like sign-up bonuses, rates, benefits and terms—are usually set by the issuing institution, not the processor. Your best bet is to decide which programs or perks will be most valuable and applicable to your spending profile, and seek out the specific card that fits the bill. If you’re set on choosing either a Visa or Mastercard, though, the tools below will help you narrow the field.