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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.
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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.
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:
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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:
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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:
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.
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:
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:
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
World Elite Mastercard
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:
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.
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.
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.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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