Visa and MasterCard both offer convenient worldwide access. Use the guide below to learn what you need to know when comparing and finding the right credit card for you.
When it comes to choosing a credit card, or even a debit card for that matter, Australians usually have the option of choosing between a Visa or a MasterCard. There are instances when you might not have so much of a choice, because a number of financial institutions offer credit cards linked to one or the other, and not both. What’s also important to note is that neither Visa nor MasterCard actually issue credit cards.
However, as both card types offer almost identical features, it can be difficult to determine which one is of better value. We’ve compared some of these features side by side to help our users decide which option is the right one for them.
What are Visa and MasterCard?
Visa and MasterCard, as mentioned, don’t issue credit cards, and they function as payment processing platforms instead. Individual banks and other financial institutions issue Visa and MasterCard branded credit cards, and it is these institutions who work in naming the cards, setting interest rates, and providing promotional offers.
Visa and MasterCard simply provide these institutions their expertise in merchant processing systems, and they do this for a fee. Both, Visa and MasterCard have a significant global presence, but there are aspects that differentiate one from the other.
What do they offer?
While credit card issuers are the ones who set most credit card related terms and conditions surrounding interest rates and rewards, Visa and MasterCard are behind a number of credit card linked offerings:
- Credit card levels. Visa credit cards come in two benefit levels which include base level and Visa Signature. The perks you stand to receive depend on the level of your card. MasterCard, on the other hand, provides three benefit tiers – Base, World, and World Elite.
- Concierge service. Access to a concierge service depends on the level of your card. Visa offers eligible cardholders access to a global 24/7 concierge service, and MasterCard’s personal travel advisor functions in a similar capacity.
- Complimentary insurance covers. Both, Visa and MasterCard, offer eligible cardholders’ complimentary insurance covers. These include travel and purchase covers, and can vary depending on your card level.
- Exclusive benefits. Visa offers a range of exclusive benefits to its cardholders that can come in the form of perks at hospitality partners, pre-sale tickets to special events, and discounts on shopping. MasterCard has its own luxury hotels and resorts program, and cardholders can also look forward to discount on select airlines and upgrades with certain car rental companies.
How can I compare Visa and MasterCard?
In terms of features offered by Visa and MasterCard, the differences from a consumer’s point of view seem trivial enough to ignore. Both offer largely similar accessibility and security features along with similar fraud guarantees. This, though, does not imply that all Visa and MasterCard credit cards are the same, and you can compare them using the following parameters:
- Fees. Most credit cards charge ongoing annual fees, and these fees can vary between different cards offered by the same credit card issuer. When you use a Visa or MasterCard credit card overseas, expect to pay international transaction fees, which, again, can vary from card to card.
- Rewards. You can find Visa and MasterCard credit cards linked to different rewards programs, and even the same rewards programs. You can, for instance, find Visa and MasterCard credit cards that come linked to the Qantas Frequent Flyer Program. How many points you earn per dollar spent, and what you can redeem your points for can vary from one rewards program to the next.
- Privileges. Priceless Cities from MasterCard gives cardholders access to a unique collection of travel experiences and offers, its Priceless Music gives cardholders exclusive access to some of the best music events, and MasterCard World brings to the fore a variety of experiences and offers ranging from shopping to golfing. Visa Entertainment brings with it a number of offers, experiences, and competitions, and cardholders can get easy access to presale tickets for some of the most sought after events in Australia.
What else should I consider?
Before you apply for a MasterCard or Visa credit card, make sure you pay attention to the following:
- Interest. The interest you have to pay for purchases can vary considerably from one card to another, and this aspect requires careful consideration if you don’t plan to pay your account’s closing balance completely every month. If you plan to use your credit card for cash advances, find out how much interest cash advances attract.
- Interest rate offers. Certain MasterCard and Visa credit cards come with promotional interest rate offers on balance transfers and purchases, and such offers can help you save considerably in the form of interest.
- Interest-free days. Most credit cards offer in between 44 and 55 interest-free days on purchases, but this is not necessary, so find out if the card you wish to get does.
- Spending habits. Taking you spending habits into account before you apply for a credit card can help you narrow down a suitable alternative. If you plan to use your card regularly you might benefit by getting a rewards card or if you’re a regular traveller, a card with a partnered frequent flyer program could be of interest. Otherwise, if you want a card just for emergencies, you could consider a no annual fee or low rate card.
A brief history
MasterCard came into being in 1966 in the form of Interbank Card Association (ICA), with the introduction of the Master Charge: The Interbank Card. It started operating under the MasterCard name in 1979. This company offered an IPO through the New York Stock Exchange in 2006, and trades using the symbol MA.
Visa’s history dates back to 1958, when Bank of America launched BankAmericard. This was the first credit card program made available to the public at large in the US, and grew in popularity soon. By the 1970s, BankAmericard became an independent entity that went on to take the name Visa. Visa then launched VisaNet, which was the first electronic payment authorisation, clearing, and settlement system in the world.
How do they make money?
When you use your MasterCard or Visa credit card you don’t have to worry about these institutions adding extra fees to regular purchase transactions. Here’s how these companies make money:
- Card issuer fees. Both, MasterCard and Visa, charge financial institutions service fees to provide use of their payment systems.
- Bank settlement fees. Credit card issuers pay this fee at the time of settlement of payments.
- Overseas fees. These companies manage to make some profit through foreign currency conversion, foreign currency conversion fees, and international ATM fees.
- Extras and marketing. MasterCard and Visa also earn income by offering extras like complimentary insurance covers and concierge services. They also market offers on behalf of third-party businesses from time to time.
Visa and MasterCard compared
|Size of companies||Visa||MasterCard|
|Market capitalisation (value)1||US$119.77 billion||US$69.38 billion|
|Number of cards in circulation||2.1 billion||Not published|
|Value of transactions per year||US$6.5 trillion||US$3.6 trillion5|
Visa is by lengths the bigger company. Whether size actually translates to better service and consumer value is debatable though. Both companies are of sufficient size to run formidable security and fraud protection divisions and also have economies of scale to provide consumers with highly competitive payment services worldwide.
|Number of countries||200+||200+|
|Number of merchants||tens of millions||30 million|
|Number of ATMs||2 million||1.5 million|
|Winner?||A tie||A tie|
1 at 26 June 2013 reported by Yahoo!7 Finance 2 Visa, March 2013 3 CreditCardForum 2012 4 MasterCard 2012 Annual Report 5 The Guardian May 25 2013
In terms of card acceptance, the two schemes are roughly tied. The stats are a big wishy-washy on this, as Visa doesn’t state how many million merchants they actually have and that the data from MasterCard is almost a year older than that published by Visa. So it is a little challenging to compare while seemingly pretty similar in their results. So we’ll call it a draw.
ANZ First Visa Credit Card Offer
The ANZ First Visa Credit Card features interest-free days and complimentary warranty insurance with a low annual fee.
- $30 p.a. annual fee
- 19.74% p.a. on purchases
- 0% p.a. for 18 months with 3% balance transfer fee on balance transfers
- Cash Advance Rate of 21.49% p.a.
- Up to 44 days interest free
- Minimum Income Requirement of $15,000 p.a.
While there are certain differences between MasterCard and Visa credit cards, these are not so much of a concern from the point of view of an average credit card user. What matters, on the other hand, is paying attention to aspects like interest rate, annual fees, and interest rate offers, and you should also consider if you wish to pay more to make use of additional features. With the number of options on offer, take some time to compare as many as you can, and then pick one that suits you best.Back to top
Frequently asked questions
Which is a bigger company in terms of market capitalisation and employees?
In 2013, Visa was worth around US$119.77 billion, and MasterCard was worth around US$69.38 billion. As per MasterCard’s 2012 Annual Report, it had over 7,500 employees then. Visa, in 2013, employed more than 9,000 individuals.
In how many countries can I use Visa and MasterCard?
Both cards find acceptance in over 200 countries and territories the world over.
Do I have to meet any eligibility criteria to get a MasterCard or Visa credit card?
Yes. You should be over 18 years of age, you should be a permanent Australian resident or an Australian citizen, and have a good credit history. You might also have to meet minimum income requirements depending on the card.