|
Visa Or Mastercard: Which Credit Card Should You Apply For?
By: Ed Vegliante
Should you get Visa or MasterCard? Is one of them better than the other? Will
one of them help your credit rating more than the other? Many people ask
themselves these types of questions when they think about getting their first
credit card or additional ones. The fact is, few differences exist between the
two credit card brands today, but you can benefit by having a better
understanding of the two companies and using their competition to your
advantage.
Just Who Are Visa and MasterCard
First, you should know that neither Visa nor MasterCard actually issue credit
cards themselves. Neither company deals with consumers or merchants directly.
Instead, they create and run the worldwide computer networks that process the
billions of transactions that occur each day from people who use their credit
cards at millions of merchants and ATMs. Both companies make their money from
financial institutions to whom they license the ability to market the MasterCard
or Visa system to consumers and merchants.
MasterCard and Visa have been fierce competitors for years, each vying to be
faster and more global than the other, just like Hertz and Avis, and McDonalds
and Burger King. Each time one brand creates a new twist on their credit cards,
the other soon follows to match it. Both companies now offer nearly identical
benefits, such as travel insurance, car rental insurance, product warranty
extensions, and so on.
Furthermore, both cards are accepted worldwide by nearly the same number of
merchants. MasterCard says its cards can be used at more than 23 million
locations around the globe, including 1 million ATMs and other locations where
cash can be obtained. Visa says its cards are accepted at more than twenty
million locations in more than 150 countries.
In general, most merchants throughout the world accept both cards, or if a
merchant takes only one of the brands, another merchant down the block takes the
other. The point is, your chances of being locked out of eating or buying a gift
or getting a hotel room because you have only one brand of credit card are
usually minimal -- other than at a few noted events where one card or the other
may have negotiated to be the sole credit card to be accepted. But such
instances are far and few between.
Which Card is Right for You?
Given the above, is one card better or more right for you? The best answer
depends on whether it’s your first, second, or additional card, as follows:
If You’re Applying for Your FIRST Credit Card
In this situation, you can make a choice based simply on selecting which issuing
bank you prefer to work with, or which promotional offer you like the most,
without regard to the brand on the card. Perhaps you like Chase or Citibank or
HSBC, or perhaps you like the 0% APR with no-annual-fee offer you found online.
It's six of one, a half-dozen of the other.
If You’re Applying for Your SECOND Card
In this situation, it is strategically smart to select the opposite brand card
from your first card AND to choose a different issuing bank. The rationale for
this is that when you have two different cards, you will find that the two banks
will compete for your business (assuming you maintain good credit). You will get
offers for 0% balance transfers, higher credit limits, and other perks as the
two banks vie for your increased use of their card. And just in case you find a
merchant who only takes one brand of card, you can now be assured of having all
your bases covered.
If You’re Applying for ADDITIONAL Credit Cards
Many people apply for more than two credit cards because something specific
motivates them to get a third or a fourth card. You may want a separate card to
use for your business charges, or to compliment your airline frequent flyer
program. In these cases, your selection is largely predetermined by whichever
card has attracted your attention to fulfill your specific needs. You might even
shop around among issuing banks to be sure you find the best offer, no matter
which credit card brand stands behind it.
In short, choosing between Visa and MasterCard is no longer a frustrating
question for anyone applying for a first credit card. You can’t go wrong with
either brand. And if you already have a first credit card, it can be a very
smart move to apply to get a second card from the other brand. If you treat your
credit well, you’ll soon be having two (or more) banks begging for your business
-- and that's a good thing!
Copyright 2005 Ed Vegliante. You may freely reprint this article provided the
resource box remains intact with a live link back to http://www.credit-card-surplus.com.
About the Author:
Ed Vegliante is the owner of http://www.credit-card-surplus.com , a well
organized credit card directory enabling the consumer to compare and apply for a
variety of credit card offers including MasterCard and Visa credit cards. Find
links to secure online credit card applications. |
