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Visa Or Mastercard? What Are The Key Differences?

Visa or Mastercard? What are the key differences?

Daniel Teo

By Daniel Teo

🗓️

Updated: November 06, 2024

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Credit cards can be valuable contributors toward your financial health but picking the right one can get tricky. If you’re trying to decide between Visa or Mastercard, know that they are nearly identical and the real differences are the individual benefits that come with specific cards. That being said, it’s worth knowing what the minor differences are between Visa or Mastercard before you choose the card that’s right for you.

Processing networks and card issuing partners

The first thing to note is that neither Visa nor Mastercard actually issue any credit cards to consumers. Visa and Mastercard are credit card processing networks. As networks, they control where credit cards can be accepted and they process payments between merchants and credit card issuers.

Visa and Mastercard partner with banks and retailers to issue credit cards. Credit card issuers back the card financially and set the terms and conditions including annual fees, interest rates, and late fees. Issuers also define the benefits such as cash back or rewards points. Some banks use an exclusive credit card processing network as their partner while others have multiple partnerships:

How widely are Visa and Mastercard credit cards accepted?

Visa and Mastercard are widely accepted around the world. Visa is accepted at over 28 million merchants across 200 countries with cash advances available through the Plus ATM network. Mastercard is accepted at over 30 million merchants across 210 countries with cash advances available through the Cirrus ATM network.

While a majority of merchants worldwide will accept both Visa and Mastercard, some retailers will work exclusively with one payment network or the other. For example, Costco stores in Canada offer their own co-branded Mastercard and only accept credit payments on the Mastercard network. To be clear, it’s the merchant who decides which types of credit cards they’ll accept for payment. That being said, if you have a specific Visa or Mastercard, it may benefit you to use that card at certain locations.

Types of Visa and Mastercard credit cards

Both Mastercard and Visa offer different tiers of service. Visa offers Classic, Infinite, and Infinite Privilege levels while Mastercard offers Classic, World, and World Elite. All levels within both networks provide zero liability protection against fraud.

The Classic service level for both Visa and Mastercard usually don’t have a minimum income requirement for you to qualify for the card. If you’re applying for a Visa Infinite or World Mastercard, you’ll typically need a minimum annual income of at least $60,000 (or a combined household income of at least $100,000). World Elite Mastercards typically require an individual annual income of at least $80,000 (or a combined household annual income of $150,000).

Visa Infinite and World Elite Mastercard include all the perks from lower tiers but also include a suite of premium benefits designed to appeal to high-income consumers.

Despite these different card classifications, in the end, the credit card issuers decide how they’re going to label their credit cards. The only thing that Visa and Mastercard insist on is the minimum income requirement. E.g. if a credit card issuer is going to brand a card World Elite, then applicants must have an individual annual income of at least $80,000.

Visa vs Mastercard: Bonuses and benefits

Generally speaking, Visa and Mastercard have similar benefits when comparing the Infinite and World Elite lines. Both come with extended warranty & purchase protection, concierge service, offers from hotels & retailers, dining experiences, and travel insurance.

But some Mastercards have one noticeable benefit over Visa: Complimentary membership to Mastercard Travel Pass provided by DragonPass. These Mastercards allow access to over 1,300 airport lounges, with some cards providing free individual lounge access passes and others allowing access for a per-visit fee.

Any additional benefits such as the sign up bonus, earnings rate, suite of travel insurance, etc. are determined by the credit card issuer and vary by card.

BMO Ascend World Elite®* Mastercard®*

Apply now

4.5

up to 90K pts

Welcome offer

Excellent

Suggested credit score

Get up to 90,000 points and the annual fee waived in your first anniversary for both the primary cardholder and authorized users.*

Expires

Nov 30, 2024

Apply now

Pros

  • High-value welcome offer

  • Flexible airport lounge access

  • BMO Rewards points can be used to cover flight taxes and fees

  • Great for those who frequently rent cars

  • Good for Costco and No Frills shoppers

Cons

  • So-so earn rates relative to its annual fee

  • Points have low redemption value compared to other travel rewards programs

  • Charges foreign transaction fees

  • Relatively high minimum income requirements

Eligibility

Recommended Credit Score

Excellent

Required Annual Personal Income

$80,000

Required Annual Household Income

$150,000

Pros

  • High-value welcome offer

  • Flexible airport lounge access

  • BMO Rewards points can be used to cover flight taxes and fees

  • Great for those who frequently rent cars

  • Good for Costco and No Frills shoppers

Cons

  • So-so earn rates relative to its annual fee

  • Points have low redemption value compared to other travel rewards programs

  • Charges foreign transaction fees

  • Relatively high minimum income requirements

Eligibility

Recommended Credit Score

Excellent

Required Annual Personal Income

$80,000

Required Annual Household Income

$150,000

Earn 5x the points for every $1 spent on eligible travel purchases*

5x

Earn 3x the points for every $1 spent on eligible dining and entertainment purchases and recurring bill payments*

3x

Earn 1 point for every $1 spent everywhere else*

1x

Complimentary membership in Mastercard Travel Pass provided by DragonPass, with 4 annual complimentary passes

4

Purchase APR

20.99%

Balance Transfer Rate

23.99%

Cash Advance APR

23.99%

Annual Fee

$150

Foreign Transaction Fee

2.5%

You can now get complimentary membership in Mastercard Travel Pass provided by DragonPass,* with annual complimentary passes with your BMO Ascend™ World Elite®* Mastercard®*. This is one of the best travel credit cards in Canada, with a great sign up bonus.

  • *Terms and conditions apply.

    BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.

Scotiabank Passport® Visa Infinite* Card 

Apply now

4.3

up to 35K pts

Welcome offer

Excellent

Suggested credit score

Earn up to $1,100* in value in the first 12 months, including up to 35,000 bonus Scene+ points

Expires

Jan 3, 2025

Apply now

Pros

  • No FX fees means the card saves you significant expenses on foreign transaction fees

  • Earn up to 3x Scene+ points per $1 spent on eligible purchases

  • Flexible and straightforward redemption program

  • Visa acceptance globally compared to American Express, especially outside major cities.

  • Enjoy six annual visits to airport lounges

  • Robust insurance offerings, including extended travel emergency medical coverage

  • Access to Visa Infinite Program benefits, with added advantages like a free supplementary card

Cons

  • High annual fee

  • Limited rewards categories for earning reward max rate on purchases

  • Primarily best for travel within Canada

Eligibility

Recommended Credit Score

Excellent

Required Annual Personal Income

$60,000

Required Annual Household Income

$100,000

Pros

  • No FX fees means the card saves you significant expenses on foreign transaction fees

  • Earn up to 3x Scene+ points per $1 spent on eligible purchases

  • Flexible and straightforward redemption program

  • Visa acceptance globally compared to American Express, especially outside major cities.

  • Enjoy six annual visits to airport lounges

  • Robust insurance offerings, including extended travel emergency medical coverage

  • Access to Visa Infinite Program benefits, with added advantages like a free supplementary card

Cons

  • High annual fee

  • Limited rewards categories for earning reward max rate on purchases

  • Primarily best for travel within Canada

Eligibility

Recommended Credit Score

Excellent

Required Annual Personal Income

$60,000

Required Annual Household Income

$100,000

Scene+ points¹ on every $1 you spend at Sobeys, Safeway, IGA, Foodland and participating Co-ops and more

3x

Scene+ points¹ for every $1 you spend on other eligible grocery stores, dining, eligible entertainment purchases and eligible daily transit options (including ride shares, buses, subways, taxis and more)

2x

Scene+ point for every $1 spent on all other eligible everyday purchases

1x

Purchase APR

20.99%

Balance Transfer Rate

22.99%

Cash Advance APR

22.99%

Annual Fee

$150

Foreign Transaction Fee

0%

Though Visa itself doesn’t have a partnership when it comes to lounge access, Scotiabank does, and its Scotiabank Passport® Visa Infinite* Card provides 6 airport lounge passes annually through complimentary Visa Airport Companion Program membership. The card has an annual fee of $150 but the lounge membership and passes are worth more than that alone. As added benefits the card does not charge foreign transaction fees and also provides a comprehensive travel insurance package.

  • ¹ Conditions Apply. Visit here for the Scotiabank Passport® Visa Infinite* Card to learn more.

    *See Card Provider's website and Card Application for complete card details, terms and current offers. Reasonable efforts are made to maintain accuracy of information.

Visa vs Mastercard: Fees and rates

A card’s fees and rates are usually determined by its issuer, not processor. The only rates that Visa and Mastercard determine are the foreign exchange rates, which are usually comparable to what the Bank of Canada has listed. But keep in mind that many credit card issuers add on a 2.5% fee for any purchase made in a foreign currency.

Visa and Mastercard credit card annual fees can range from $0 to over $150 per year, but that’s again determined by the credit card issuer, not the processor. Generally speaking, higher annual fees translate into more comprehensive benefits, but you may need to have a higher income or credit score to qualify.

A credit card’s purchase interest rate is also set by its issuer, but most Visa and Mastercards have an average rate of 19.99%. Fees and rates are important considerations when choosing a credit card, but you generally need to look at the individual cards and what they offer as opposed to making assumptions about the cards based on their processor.

Final thoughts

Ultimately, there are very few important differences between Visa and Mastercard, and we can’t say that one is clearly better than the other. Visa and Mastercard securely process your payments for your peace of mind. Instead of deciding between Visa and Mastercard, what you should be focusing on is the individual features of each card to determine if it provides the features you need and aligns with your spending habits.

Daniel Teo Author

Daniel Teo is a personal finance expert and travel writer based in Toronto. With a passion for financial literacy and a wanderlust that has brought him to over 30 countries, his stories touch on what’s possible when you achieve financial goals. His work has appeared in The Globe and Mail, the Toronto Star, CBC and on BNN.

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