What is Visa, Mastercars & Credit Card?

If you ask people what Visa and Mastercard are, most will tell you that they are credit cards. This is close to being correct but is not actually correct. Visa and Mastercard are credit card companies, not actual credit cards. It’s a small but important line between the two. They are essentially just payment methods. When you pay your credit card bill, you are actually paying the banking institution through which you took out the credit card. And when you borrow money (i.e spend money on your card), you aren’t borrowing from Visa or Mastercard. But are borrowing the money from the bank who issued the card. The rewards, fees, interest, etc, aren’t going to these companies but are going to your bank.

Visa and Mastercard simply set up and negotiate payments systems across the world. This means that the companies are responsible for setting payment rules and standards. As well as rules around payment authorization and general processing. The way they make money is by charging your bank to use the payment systems they have set up. They’re basically like a weird, very famous middleman.
The actual differences between the two are often negligible, as they’re attempting to remain competitive with each other. In the past, more businesses accepted Visa than Mastercard but now the statistics are a little less clear cut. This is largely due to Mastercard refusing to directly compare itself to Visa’s statement about having issued 1.6 billion cards. Instead, Mastercard released the statistic that it facilitates over 18 billion payments per year. These statements are hard to compare against each other in order to determine who has the most usability but many state that Visa is accepted even more widely than Mastercard as a payment method.

As far as security goes, both companies have offered that extra online step to fight against credit card fraud. Visa uses Verified by Visa and Mastercard introduced SecureCode. Neither of these protection schemes forces you to use them. It’s only offered as an option to give you extra online security. Both protection schemes seem to work equally well in terms of security. Giving neither company a clear lead over the other regarding fraud prevention.
Obviously reward schemes are a main reason customers use credit cards and it’s hard to remember that Visa and Mastercard don’t actually actively participate in these. Because they’re both simply methods of payment, the rewards themselves actually come from your bank. The only way choosing Visa over Mastercard (or vice versa) will make any kind of a difference in terms of reward points is by considering how much you travel abroad (and to which countries) and seeing if these countries have a preference for one over the other. If not, reward schemes are another area where these companies remain level.

Ultimately, it makes sense to think about the interest levels for cards that are options for you. Rather than concentrating on an arbitrary choice between Visa or Mastercard. Both are very global and provide very similar levels of service. The service and charges/rewards provided by your bank are far more likely to actually affect you. Therefore, the bank you choose to go with for your credit card has far more of a potential impact on you than whichever payment method that bank chooses to use for a specific card. The choice between Visa and Mastercard is essentially arbitrary. As the differences between the two are pretty much negligible. Focus on interest rates, rewards programs, rates/fees on balance transfers, etc. The things that are likely to genuinely have an impact on you rather than what equates to a ‘name brand’.
If credit cards are currently more of a nightmare than an interesting financial option for you at this point in time and you’re struggling under large amounts of debt, you may need to look at debt relief options. Debt negotiation could be a useful option for you in this sense, depending on your circumstance. Once you enroll in a debt negotiation program. Licensed debt negotiators speak to your creditors (the banks, etc) on your behalf and negotiate a lump sum settlement, typically at about 50% of what you initially owed. The programs tend to be between 1 and 3 years and allow you to save up this lump sum. Which your creditors will consider payment in full after negotiations are complete.
The advantage to this method as opposed to other debt relief options out there (apart from paying a fraction of what you owe) is that it is not an officially recognized form of debt management. Which means there will not be a little note on your credit report telling potential creditors that you have been unable to manage your own debt in the past. Yes, debt negotiation will damage your credit, same as any other debt relief option (or indeed, even being in debt). But because of its aggressive approach to debt as well as not being officially recognized, it allows for a far quicker rebuilding of your credit rating. This lets you start with a clean slate as soon as possible after clearing your debt.