30 AUGUST, 2021

Using a credit card is one of the best options to manage your finances in times of need. It comes with a pre-approved credit limit that you can use to make purchases of goods and services. Your issuing bank decides your credit card limit based on your income and credit score

Most people are confused while exploring the difference between VISA and MasterCard. Both of them come with extremely similar features and benefits decided by the issuing bank. If you want to buy a credit card for yourself, it would be wise not to base your decision on the VISA or MasterCard logo on the card but on the rewards points, discounts, and other benefits that it offers. 

Overview About VISA and MasterCard

Most people think of VISA cards and MasterCards as credit card issuers. Contrary to popular opinion, they are nothing but liaison networks between the issuing bank and the merchants. To apply for a credit card, you do not submit your application to VISA or MasterCard but the issuing bank. 

If you do not know how to get a new credit card, it is best to apply online. You can send your application to your issuing bank, and the bank will approve your application after certain verification checks. Your bank determines your credit card limit, interest charges, and issues credit card statements every month. Your bank also manages your credit card reward points, discounts, etc. 

On the other hand, VISA and MasterCard are networks that act as liaisons between your issuing bank and the merchant from whom you purchase goods or services. When you swipe your credit card on a PoS terminal, your credit card network, such as VISA or MasterCard, processes the transaction. There are a few benefits that VISA and MasterCard provide that make substantive differences between VISA credit cards and MasterCard credit cards. However, most of your credit card benefits are offered by your issuing bank. 

Similarities between VISA and MasterCard

All credit cards have either a VISA or MasterCard logo on top of it. It indicates that the VISA or MasterCard network transfers the information to ensure a smooth and safe transaction. 

Here are the common things in VISA and MasterCard 

  • Contactless:

Both VISA credit cards and MasterCard credit cards offer contactless payment technology. You simply need to tap your credit card on a PoS machine to make a transaction; no need to enter a PIN. 

  • Protection against fraud: 

The best thing about both VISA and MasterCard is that it offers protection against fraudulent activities. For instance, if someone makes an unauthorized transaction from your credit card, you will bear no liability. 

Differences between VISA and MasterCard

  • Both the cards are accepted worldwide. However, if you use your credit card to make a foreign transaction, you will incur foreign exchange rates. Comparatively, MasterCard credit cards offer better foreign currency rates abroad. 
  • Most credit cards come with an auto rental collision damage waiver that you can avail while travelling However, such benefit depends on your issuing bank, the credit card network, and the type of credit card you choose. 
  • A MasterCard credit card comes with return protection. It means that if a merchant does not accept the return of the product within 60 days of the purchase, your credit card issuer will refund the cost. 
  • It also comes with purchase protection, allowing you to get a refund if you lose the product within 90 days of the purchase.
  • You are always protected against the prices of products and services. For instance, if you find a particular product at a lower price after buying it, your MasterCard will refund the difference. You are eligible to apply for a refund within 60 days of the purchase. 

Different levels of VISA and MasterCard

The features and benefits of both VISA and MasterCard are similar but not identical. Your credit card comes with certain conditions. For instance, the credit issuer decides if your credit card will have network benefits. Your MasterCard may offer travel insurance or rental car coverage, but it does not mean that all MasterCards offer the same coverage. 

Here are differences based on the underlying three levels of your credit card. 

VISA credit card

There are three levels of VISA credit cards - traditional, signature, and infinite. A traditional VISA credit card comes with features like auto rental collision damage waiver, zero fraud liability, emergency card replacement, and emergency roadside assistance.  

The Signature VISA credit card offers the features of a Traditional VISA card with extended warranty protection and emergency assistance. 

Whereas, the Infinite VISA card offers the features and benefits of both traditional and signature VISA cards. Besides that, it comes with added benefits, such as return protection, purchase protection, travel accident insurance, trip cancellation, interruption insurance, and lost luggage reimbursement. 

MasterCard credit card 

There are three levels of MasterCard credit cards - standard, world, and world elite. A standard MasterCard credit card is known for benefits, such as card replacement, identity theft protection, zero fraud liability, extended warranty, and price protection. 

A world MasterCard comes with cell phone insurance, travel insurance, free access to concierge, discounts, and promotions with select retailers. Whereas, a World Elite MasterCard comes with the benefits of both Standard and World MasterCard.

As stated above, both MasterCard and Visa offer a host of benefits. However, your choice shouldn’t depend on them. Take a look at the offers and benefits offered by the various Kotak Mahindra credit cards. Choose the one which best suits your lifestyle and manage your finances better!

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.