Visa vs Mastercard: Here's The REAL Difference.. #Best Education Page #Online Earning

 So the other day I was out with a friend of mine,

and a lot of my friends will often

ask me questions about money and finance,

just because that's what I study day in and day out.

And I had somebody ask me a question

that absolutely stumped me,

and so I decided to find the answer to this question

and put together a YouTube video.

But that question was,

what is the difference between a Visa card and a MasterCard?

And it's literally a question

I have never been asked before

and something I've literally never thought of.

But as soon as someone asked me that question,

I opened up my wallet and I noticed

that my bank has a MasterCard,

(bell dings) and I have friends of mine

whose banks have Visa cards, and they were wondering

if one is better than the other.

So that's what we're gonna be talking about in this video,

what the heck is the difference

between a Visa card and a MasterCard,

and is one better than the other?

(screen whooshes) So the first thing we have to

understand here is that there's two

different groups or entities at play here.

Number one, we have the credit card companies,

which is Visa, MasterCard,

and then you could also add American Express

and Discover to that list.

And then number two, you have the banks,

like Wells Fargo or Bank of America.

Now these credit card companies

like Visa and MasterCard are not the ones

that are actually issuing branded cards.

There's no such thing as a Visa bank or a MasterCard bank.

You're gonna find that the Bank of America

or Key Bank has a Visa or a MasterCard.

And the reason behind that is because Visa and MasterCard

are what we call these credit card companies

or more specifically, payment technology companies.

(screen whooshes) And so essentially what it is,

it's a processing network where Visa and MasterCard

are basically handling the transactions

between the bank and the merchant.

This is not something that

the banks themselves are handling.

They are going through the payment network

of either Visa or MasterCard

or also Discover or American Express

or some of these larger credit card companies.

And what's interesting here is how

these companies actually make money,

because we know how banks make money.

Banks make money in one way

by offering credit cards to people,

and then they earn money from interest.

So when you load up that credit card

and you're making those interest payments,

that money is going to the bank.

But believe it or not, none of that money

is being passed along to this credit card company,

and Visa and MasterCard are actually making money

in a completely different way.

(screen whooshes) Visa and MasterCard

are making money in merchant or business fees.

they're actually making money from the merchant.

So every time you swipe your card

at a store or a gas station, Visa and MasterCard,

or whoever the credit card company is,

is making a very small amount of money,

a percentage of that transaction,

being paid by that business owner.

So everything Visa and MasterCard are doing

is between the merchant and the bank.

It really has very little to do with you,

because you're dealing directly with the bank.

So now that we understand what Visa and MasterCard are,

compared to a traditional bank,

the big question that you probably have is,

is there a difference, and is one better than the other?

And the answer to that is, there's kind of a difference,

but it's not nearly a major difference

to the point where you would look at it and say

I wanna have a Visa card or I want to have a MasterCard.

And the reason behind that is because

banks are the ones that set interest rates,

they determine the fees,

and they also determine the perks and rewards.

That has nothing to do

with the credit card companies Visa or MasterCard.

So the majority of the things that differentiate

one credit card from another

are based on the banks and what the banks determine.

So most people are not going to be deciding

on a credit card based on the Visa or MasterCard label.

It's gonna be based on,

do I want the Bank of America credit card

or the Chase Bank credit card, based on the cashback

and the different perks that bank is offering.

(screen whooshes) But I went ahead and did

some digging and I found this article on ValuePenguin

that talks about MasterCard versus Visa.

I'll link it up in the description below.

And this basically shows that both Visa and MasterCard

offer similar rental car insurance,

so if you are ever renting a car,

make sure you put that on a Visa or a MasterCard

for some kind of insurance there on that vehicle.

Both offer travel benefits in the higher tiers of the card

because they have different tiers

like a signature or a platinum level,

based on the credit card.

And both offer purchase protection

and extended warranty in their higher tiers.

So both Visa and MasterCard are offering

basically the same exact perks to the cardholder.

The only time you're really going to see

a difference between MasterCard and Visa

is with occasional seasonal deals

or one-time purchases with specific merchants.

So maybe for example, MasterCard wants to give you

5% off your Old Navy purchase for example,

if they wanted to make a deal with that merchant.

That's about the only time

you're going to see deals like that

where one card might be better than the other.

(screen whooshes) And one example of this

that I actually saw myself,

something I was able to take advantage of,

is MasterCard holders will get a VIP tour

of the One World Observatory in New York City.

So that's the only time I've ever really

gotten a perk for having a MasterCard.

And so occasionally you may find perks like that,

where Visa card holders or MasterCard holders

will specifically get a perk

that other card holders will not.

(screen whooshes) But anyways guys,

that wraps up this video and that answers the question

of the difference between Visa and MasterCard.

There's really not much of a difference

and it has very little to do with the consumer.

This is mostly something that has to do

with merchants and banks.

You might find deals once in a while

specific to Visa or MasterCard holders,

but both of these cards are offering

essentially the same exact thing,

and it's essentially just the technology here,

the payment technology that Visa and MasterCard handles.

All of the cool stuff, the cashback, the rewards,

(graphics bubbling) that is handled by the bank,

and so if you are one of those people

that focuses a lot on credit card deals and rewards,

that is mostly what you're looking at.

You're not really caring about whether or not

it is a Visa card or a MasterCard.

But thanks so much for watching this video.

I hope you guys enjoyed it.

If you did, make sure you drop a like and subscribe,

and I will see you in the next one.

#Best Education Page #Online Earning

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