The differences between cards, Visa, Mastercard, American Express and Discover

Numerous factors go into it choosing a credit card – finding a low interest rate, you calculate cash-back potential and through rewards. The particular processing network of a card is probably not an important part of most people’s criteria. But whether your card is supported by Visa, Mastercard, American Express or Discover has implications for where and how you can use it.

Read more: The best cash-back credit cards

The four major credit card processors oversee every part of the purchase process – including approving or rejecting a transaction, protecting buyers and buyers from fraud and ensuring that money flows to and from the appropriate accounts. Here is everything you need to know about credit card processors and the differences between them.

Processing Vs. to spend

Credit card processors act as the link between your bank and a merchant’s bank. When a payment is initiated, a processor analyzes the request – make sure the request is genuine and you are the one making it. If everything seems legit, it approves the transaction, takes the money from your bank (or applies the charge to your credit card) and pays the merchant. Visa, Mastercard and Square are all credit card processors.

Issuers provide credit cards to consumers. They do all the checking – by checking applications to see if you are eligible and reporting payments (and missed payments) to credit bureaus. They also handle customer service: If you are ever worried about a transaction or want to pay over a payment, call your card issuer with the number on the back of the card. Chase, Bank of America and Wells Fargo are examples of credit card issuers.

Read more: 7 things to know about interdisciplinary credit cards

American Express and Discover are the only major processors that also issue cards. If you have a Visa or Mastercard card, it will always be linked to a designated bank such as Capital One or Barclays. American Express and Discover may also offer cards through separate publishers, but they have the capacity to issue their own cards. For example, American Express serves as both issuer and processor for its Blue Cash Preferred card.

Acceptance

Credit card processors make money by collecting a percentage of every transaction that comes through their network. Part of the reason American Express cards are not as widely accepted as others is that it costs buyers on average a higher fee than others.

Still, each of the four major credit card processors does business with millions of merchants in more than 100 countries. Visa says its cards are accepted at more than 46 million business locations in more than 200 countries. According to American Express, their cards were accepted by more than 10 million merchants in the U.S. in 2019. All four processors support transactions in at least 100 countries.

Read more: Credit scores: Everything you need to know

Qualification

There are dozens of different types of credit cards on the market – from airline and travel tickets no cash-back cards. Each comes with its own set of application requirements that take into account credit score and history. American Express is perhaps the strictest issuer when it comes to eligibility; most of the company’s cards require that applicants apply credit score of at least 670.

Read more: How do you choose a rewards card?

In contrast, the Capital One Platinum credit card has more relaxed requirements. The company says it needs an “honest” credit rating, which would include an applicant who has failed on a loan or has a limited credit history in the past 5 years. It does not have as many benefits as the American Express card, but it does allow you to build your credit and make your way to other cards. lucrative rewards.