Updated: May 13
In a marketplace glutted with options for nearly any product, consumers are faced with more choices than ever before. But when lacking any substantial information about a company, many consumers tend to make decisions based on more superficial factors, such as name recognition or brand aesthetics.
For example, when it comes to deciding which network logo should adorn your newest credit card, it can be easy to make a snap decision based on a trivial factor,
like that commercial you saw last week. But while the four major credit card networks — Visa, Mastercard, Discover, and American Express — share a lot of similarities, they each also have distinct differences that may impact how (and where) you use your card.
The network’s competitors wasted little time grabbing their own shares of the market, with Mastercard, in particular, vying directly with Visa for the bulk of credit card purchase volume. Sheer size isn’t all that differentiates the four major networks, however, as they also vary in several key areas.
Advantages of American Express:
As a brand, American Express is identified with luxury. Its classic lineup of cards serves the higher end of the market, and the offers and features baked into some of the cards are various and very useful. Some of these include:
No pre-determined credit limit.
Generous points/miles awards for qualifying purchases.
Airline ticket credits.
Reimbursement for safe traveler program (Global Entry, TSA PRE✓) enrollment fees.
High-end airport lounge access.
American Express cardholders — or “members” as the issuer calls them — are also looped into Membership Rewards®, which these days is a sprawling program full of all manner of goods and services. Over the years, the company has developed partnerships with numerous hotel chains and airlines, widening the scope of the program ever more.
American Express has also won good reviews for the quality of customer service, which is said to be responsive, helpful, and effective. Since many American Express members are habitual travelers, this can really come in handy when card-related difficulties arise in a foreign land.
Disadvantages of American Express:
There is no such thing as a perfect credit card (shocking, we know). American Express cards have a lot to offer, but there are some drawbacks too. To wit:
Slant towards the elite — Although the company has improved its card selection for not-high-worth individuals and businesses, its selection of such products remains limited.
High annual fees — Several of the issuer’s cards for people of modest means carry no annual fee, but the company’s more established products will cost you.
More limited acceptance — American Express has a relatively well-heeled clientele, and this consumer base is very attractive to merchants. This is a key reason why the issuer charges slightly higher fees to businesses to process its payments. Consequently, it’s also why some merchants don’t want to bear the additional cost of accepting the card.
Charge cards — The core American Express lineup consists of charge cards, which are credit cards that require the owner to pay the balance in full every month. That’s a particularly demanding requirement for those who like to, or must, roll over at least part of their monthly balance on a regular basis.
Advantages of Visa:
Visa is, far and away, the No. 1 payment card brand on planet Earth. As of the end of 2017, there were an estimated 3.3 billion Visa-branded cards in circulation, according to the company.
This number is well above those of both arch-rival Mastercard, and American Express.
That presence alone is a major reason to own a Visa-branded product. Merchants ignore this power at their peril — it’s extremely rare to encounter a card-accepting store that won’t swipe your Visa. With that name on your plastic, it’s almost guaranteed throughout the world that you’ll be able to use it nearly anywhere cards are taken as payment.
Of course, there are other reasons to go the Visa route. Let’s hit a few of them:
Choice — The number of issuers offering Visa-branded products is almost mind-boggling. With the great many Visa cards on the market, you can potentially find the one that best suits your circumstances.
Feature sets — In spite of its size, Visa is fighting a constant battle against its well-heeled peers Mastercard and American Express (to say nothing of upstart digital payment solutions providers). So the company packs features onto each of its branded cards separate from the issuer; these rise in number and value as you move upwards through the following tiers:
Frequent bonuses — What makes one issuer’s Visa card more attractive than another’s? Often, this comes down to intro bonuses. It’s easy to find a card that offers bonus rewards for relatively low levels of initial spending, 0% intro APR on purchases and/or balance transfers for a certain period of time… or even both.
Disadvantages of Visa:
Visa may be near-monolithic as a credit card brand, but that doesn’t mean everything connected with it is solidly beneficial. Yes, Virginia, there are drawbacks to holding this plastic too. To name a few:
Choice — The dark side of having so much choice is that it can be time-consuming and difficult for you to find the card that comes closest to meeting your needs. Are you better off with travel rewards or cash back? If the latter, flat-rate or rotating bonus categories? Is a 0% intro APR for 18 months worth paying an annual fee on the card? Figuring this out can be quite a challenge.
Feature sets and rewards — Yes, there are high-end Visa cards stuffed with perks and features. For the most part, though, the average Visa card can’t compete with comparable American Express products for the number and utility of perks. Ditto for most issuer rewards programs vs. Membership Rewards® offered by American Express.
So which is better for you?
To boil it down to the essence, American Express cards are a more comfortable fit for high earners who like to spend money. They are not cheap to own, and the charge cards at the heart of the company’s selection require more attention to maintain.
But you get something for this additional resource drain. You own a card with many extras, better-than-average rewards earning rates, and an awards catalog rich with choice.
So if you’ve got the budget and a high enough credit score, and plan on spending enough to generate those rewards and cash in those awards, one of the traditional American Express cards might be card No. 1 for you.
As mentioned, there are high-end Visa products, but for the most part American Express is the go-to issuer for the wealthy and free-spending. Instead, Visa is as huge as it is because its branded cards play well to the mass of consumers that sit below the elite.
Rather than partner with banks and credit unions to issue their credit cards, American Express and Discover act as both the processing network and the issuer for most their credit cards. Until 2004, Visa and Mastercard blocked banks that issued their cards from issuing American Express and Discover cards.
Following a successful antitrust lawsuit against Visa and Mastercard, American Express and Discover began issuing cards through other banks, but still issue the majority of their credit cards and assume the risk associated with extending credit cards to consumers.
Credit cards from all four processing networks are accepted by merchants worldwide, but once you travel outside the United States, you’ll have more trouble finding merchants who accept American Express and Discover. American Express is accepted in more than 140 countries and territories. Discover is accepted in 190 countries and territories. Visa is accepted in more than 200 countries and territories and Mastercard is accepted in more than 210 countries and territories worldwide.
Which Network Is the Best?
For many people, choosing a credit card based on the credit card issuer and the features of the individual card is better than choosing based on the credit card processing network. If most of your transactions will be made in the United States, you won’t run into much trouble using a credit card from any of the four major processing networks.
However, if you plan to travel internationally, a Visa or Mastercard may be a better option since they have more worldwide acceptance.