In Canada, our consumers have a number of different payment options to cover various expenses. Some of the most popular financial products available are credit cards from big-name providers like Mastercard and Visa. According to the Bank of Canada, there are around 96.8 million Mastercards and Visa cards circulating in our country alone.
Check out more fun facts about credit card usage in Canada.
Thinking about applying for a new credit card and wondering which provider you should choose? We have all the information you need about the key differences between Mastercard and Visa credit cards so you can make the best choice for your finances.
Mastercard vs. Visa: What You Need to Know
As mentioned, Visa and Mastercard are two of the largest credit card companies on the planet. Here are a few things that both providers have in common:
- They Are Accepted (Almost) Everywhere – Whether it’s in Canada or another country, there’s a good chance your retailer accepts Mastercard or Visa. In fact, there aren’t many places that don’t take credit cards these days. However, some retailers only work with one provider, as is the case with Costco wholesalers.
- They Are Payment and Processing Networks – Neither Mastercard nor Visa distribute their cards directly to consumers. Each company has a network of issuers across Canada, which is made up of retailers, financial institutions, and alternative lenders that take in your payments and send them for processing.
- Worry About the Bank, Not the Card Company- When you make a credit card payment, you’re technically paying the bank, credit union, lender, or retailer that issued you the card. The conditions, rates and fees of your particular card are set by them too. Visa and Mastercard only control their foreign exchange rates.
Learn how to set pre-authorized credit card payments.
Types of Mastercards and Visas
Before you officially choose a Mastercard or Visa card, consider your personal and financial preferences. After all, each credit card company sells a selection of products that might be perfect for you. Additionally, both providers offer their own version of the “Classic” credit card, which doesn’t require a minimum income to qualify for.
Here are the other levels or “tiers” of credit card offered by Mastercard and Visa:
- Standard – The Mastercard Standard is a low-cost card with basic benefits, such as identity theft protection, emergency card replacement, and zero fraud liability.
- World – By levelling up, you’ll receive the same Standard card benefits, plus cell phone insurance and various perks from Mastercard Travel & Lifestyle Services.
- World Elite – This top-tier product comes with all the benefits of lower-level cards and plenty of bonuses, like better foreign exchange fees and promotional deals.
- Traditional – Includes similar benefits as the MasterCard Standard, as well as emergency roadside assistance and auto rental collision damage coverage.
- Signature – Comes with emergency travel and worldwide travel assistance, extended warranty protection and all the benefits of the Visa Traditional card.
- Infinite – All the perks of a Signature card, plus travel benefits (trip cancellation insurance, lost luggage reimbursement, etc.) and purchase/return protection.
Differences Between a Visa and a Mastercard
Despite all of the benefits that each of these two credit card giants offers up, there are many notable differences between a Visa card and a Mastercard that might influence your final decision, including but not limited to:
Where Your Card Accepted
Remember, the issuer decides which payment methods they’ll accept and some sales locations only work with Visa or Mastercard. For instance, Costco wholesalers in Canada take Mastercards but their American branches work exclusively with Visa.
So, while these exceptions don’t happen often, it’s a good idea to check where your particular card is accepted before you go through the trouble of applying for it.
Currently, Visa is accepted by over 2.8 million merchants in 200 countries worldwide. You can also make cash advances using the Plus ATM network. Mastercard has a slightly larger global reach, spanning more than 30 million merchants, across 210 countries. In addition, cash advances can be made through the Cirrus ATM network.
The Extra Perks and Benefits
Since benefits are also controlled by the credit card issuer, there are many things to love about both Visa and Mastercard, such as the travel perks that accompany their higher level cards. For example, let’s say you’re looking for airport lounge access:
Passport Visa Infinite – This top-tier travel rewards card comes with the Priority Pass program, which gives you 6 annual complimentary visits to any of its 1,200 participating airport lounges worldwide. Plus, you get a nice sign-up bonus when you spend at least $1,000 within the first 3 months of your membership, as well as zero foreign exchange fees, different types of reward points and premium travel insurance.
Other perks and benefits you can get with some types of Visa Infinite cards:
- Deals on hotels, food, wine and other travel expenses
- Comprehensive travel insurance
- Cash-back dollars on some recurring expenses (gas, groceries, etc.)
World Elite Mastercard – By entering the Mastercard Airport Experiences program, you can get 4 free yearly visits to a global network of 1,000 airport lounges. Owned by LoungeKey, these locations will even allow you to share your passes with other travellers. While it normally costs $150 annually to use this card, signing up will also get your fee waived for the first year and score you 40,000 bonus points (a 285$ value).
Other perks and benefits you can get with some types of Elite Mastercards:
- Free membership to Boingo Wi-Fi
- Entertainment perks from Priceless Cities
- PC Optimum points when shopping at select locations (Lowblaws, etc.)
Cost of a Visa vs a Mastercard
When it comes to the overall cost, Visa cards and Mastercards are comparable. The price you pay per annum depends on which credit card you choose and where you get it. Don’t forget, a credit card’s rates and fees are controlled by the issuer.
That said, there are a couple of different factors that can affect the cost of your Visa or Mastercard, including but not restricted to:
Thankfully, if you’re looking for a simple card to pay your daily expenses and aren’t concerned about the perks, each company offers cards with zero annual fees. Using the same example as above, here’s a basic cost comparison between two travel cards of the same tier to show you what you might pay to use a higher level Visa or Mastercard:
Passport Visa Infinite Card
- Yearly Fee = $139
- Minimum Personal Income to Qualify = $60,000
- Required Credit Score = Good – Excellent
World Elite Mastercard
- Yearly Fee = $150
- Minimum Personal Income to Qualify = $80,000
- Required Credit Score = Good – Excellent
Starting off, we can see that the World Elite Mastercard has a slightly higher annual fee. Additionally, you need a higher personal income to be eligible, while the Passport Visa Infinite card allows you to qualify with a minimum household income of $100,000 or minimum assets under management of $250,000.
Although these two top-tier cards come with plenty of benefits that can make their annual fees worthwhile, it’s still something to take into account if you’re concerned about the final price of a Visa or Mastercard.
Is your credit card annual fee worth paying?
Your credit card may have different Annual Percentage Rates (APR) for different kinds of transactions, like purchases, balance transfers and cash advances. That said, most Visas and Mastercards have comparable interest rates that hover around 19.99% APR.
The Annual Percentage Rates for your Visa or Mastercard can also change if:
- Your card has a variable interest rate (fluctuates with Canada’s prime rates)
- You default on the terms of your card (late payments, etc.)
- Your card’s index rate increases
- Your card’s promotional rate or interest-free grace period ends
- The conditions of your debt management plan are modified
With both Visas and Mastercards, you can save interest by paying your monthly bills in full and on time (try not to consistently make minimum or partial payments). Plus, you may be able to find a lower-level card that has more reasonable interest rates.
Looking for a low cost credit card? Check out these low interest credit cards.
Foreign Exchange Rates
While these rates can also vary according to your issuer and card tier, you may have to pay a 2.5% foreign exchange fee to make purchases with your Visa or Mastercard outside of Canada. The amount you pay depends on the transaction and currency type.
So, this is one area where Visa might just beat Mastercard because, with the Passport Visa Infinite card, you don’t have to pay any foreign transaction fees. That, coupled with the card’s lower annual cost can make it very appealing to consumers who travel a lot.
Then again, the extra travel benefits that come with the World Elite Mastercard have over $500 in value and can make this card more preferable for buying things overseas.
Should You Get a Mastercard or a Visa Card?
In the end, both Visa cards and Mastercards are top of the line credit products that can help you pay off your expenses and enjoy various benefits. That said, don’t forget to base your final decision on the issuer and details of the card, not the supplier.
Rating of 4/5 based on 2 votes.
Largest Lender Network In Canada
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
50 Free Trades Offer
Almost $500 in commission-free trades. Code “50TRADESFREE”. Conditions apply.
Earn 5% Cash Back With Neo
Earn an average 5%¹ cash back at thousands of partners and at least 1%² cashback guaranteed.
Build Credit With Refresh
Build credit while spending money with the Refresh Financial VISA card.
Check out our interview with addy; a platform that allows Canadians to invest in different properties across Canada with as little as $1.