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MasterCard or VISA: which is better?

When it comes to choosing between VISA and MasterCard credit cards, the choice is not obvious –it is rarely the case that you know the difference. Actually is there any significant difference between VISA and MasterCard for personal use?

You can stumble upon the information that VISA is more widely spread around the world. That’s true, currently about 57% of all credit cards are issued by VISA and 26% by MasterCard. Originally VISA payment system was founded in 1958 by the Bank of America as Americard. The underlying idea was to create an all-purpose credit card that is accepted by any merchant. At that time US average consumer already had several revolving credit card accounts for different merchants, and that was extremely inconvenient. Another widely used type of credit card at that time was a charge-card e.g. Diners Club. The difference with these cards was that the full balance had to be paid every month.  Bank of America was not the first who made attempts to develop all-purpose credit card, but other smaller banks did not have enough resources to create an infrastructure to support that idea. MasterCard (Mastercharge at that time) was founded in 1966 by the group of competitors – United California Bank, Wells Fargo, Crocker National Bank and the Bank of California as opposed to VISA.

Whatever you prefer – to stay with majority and get a VISA or stick to MasterCard you should think about convenience at first. The first thing consider is which card is more widely accepted by merchants worldwide? Actually, currently about 30 million of merchants are participating in VISA and about 28 million accept MasterCard (in 2009) – close enough, right? In the United States both of them are equally accepted and you will not face any problems using any of them. Usually merchant credit cards services provide a pack supporting a VISA, a MasterCard alone or with Discover, American Express, etc. But there are still some exceptions exist for every rule: Sam’s Club for example accepts MasterCard credit and debit, but VISA Debit only cards, while Dollar General is opposite. VISA is also an exclusive Olympics’ official card. MasterCard is more common in higher education institutions because of VISA system policy (they don’t allow schools to charge convenience fees for educational payments). As a conclusion we can say that in US both cards are equally good.

The choice can be more sophisticated, when you choosing a card to take abroad. In that case you definitely should prefer VISA or MasterCard to American Express and Discover. Although Amex also has a good coverage in most big European cities, you can face problems with using it in some remote areas. It can differ from country to country: for example most taxis in Australia accept only MC, while in Kenya you will hardly find a MasterCard ATM. Best advice will be to take both VISA and Master when you go overseas, consider also taking your American Express if you have one (one card can be debit, while another is credit). Read our article about international transactions, if you want to learn more about fees and restrictions on your credit card abroad.

When you choose a credit card, it is better to take the one that have low rates, and nice rewards and less annual fee. Whether it will be VISA or MasterCard doesn’t really matter currently.


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