‘Should I go for a Visa or MasterCard’ is one of the first questions you ask yourself while trying to procure a credit card? Is either of them better than the other with respect to acceptability, credit rating etc would be the next set of questions. In this short article, let me try to answer these questions one by one.
In fact there is very little difference between Master card and Visa. Mastercard and Visa being the leading credit card brands, they are the ones that people usually compare with though there are four to five other popular brands (i.e. Discover, American Express OPEN, Diners Club) as well.
Who exactly are Mastercard and Visa?
Mastercard and Visa ARE NOT banks nor do they issue credit cards to anybody. What they instead do is to enable computerized networks that take care of millions of daily financial transactions resulting from credit card purchases, ATM withdrawals using the card etc. These companies generate licensing revenue by letting the financial institutions and banks issue their brand of credit cards (i.e. with Visa or Master Emblem) and allowing them to use their networks.
Being the Coke and Pepsi in their business segment, both these companies offer similar benefits to their customers. Some of the benefits that are offered by credit cards include travel insurance, rented car insurance, liability limits, premium membership benefits etc. Both of them are accepted worldwide regardless of the respective card company’s claims of being accepted more than the other.
So, Mastercard or Visa?
The answer is very simple. If you are applying for your first credit card, go for the best deal out there that doesn’t have any annual fee, hidden charges etc but offers the lowest interest rates or 0% APR. In addition, you might want to choose the bank that is the most convenient for you (e.g. the bank where you have your checking account, though not mandatory)
If you are going for a second card, it is always better to go for the other brand than your first card to increase your acceptance coverage. And also, you could just swipe the Mastercard if the Visa network is just busy to accept your transaction or vice versa.
So the final short answer is there’s hardly any difference between Mastercard and Visa! They are both widely accepted world wide and for any kind of online shopping. And when it comes to the bad aspects, isn’t the credit system itself bad for personal finance?