When you are comparing credit cards, are you putting the right amount of emphasis on the credit card merchant? The card merchant is not always the bank issuing the credit card, and when you are comparing a Visa card to a MasterCard to an American Express card, you may not be clear about whether the merchant – Visa, MasterCard or American Express – is offering the services you are comparing, or whether they are the services offered by the issuing bank.

Food for the wallet
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Therefore, find out a little more about each card type, and how to choose the credit card which is right for you. It is also important to remember that many features are common to all credit card merchants, for example:

Dispute resolution.

If you make a payment on your credit card or have a payment debited from your card which you are unhappy with, you can contact your credit card issuer (your bank) and they will try and solve the disputed service, and if they find you have been unfairly charged for an unsatisfactory service, you can be refunded the amount of the purchase.

Extended warranty.

You may not realize, but if you make a purchase on your credit card, it can often add an extended warranty to that of the manufacturer’s warranty. An extended credit card warranty can sometimes be as much as two years longer than the manufacturer’s warranty.

Purchase protection.

If a purchase you make on your credit card is lost, damaged or stolen, you can often have it replaced within 90 days of the purchase thanks to the added protection of your credit card.

Visa Credit Card Features

Visa is a merchant processing system, partnered with financial institutions around the world. It is the financial institutions who issue Visa credit cards who decide on the annual fee of the card, the late fees and the rewards programs, not Visa themselves. However, some of the benefits you can compare and attribute to Visa include:

Wide acceptance.

Visa has one of the widest worldwide acceptance rates of any credit card merchant, having been in operation since 1958, when it was called Bank Americard. As a result Visa is accepted in over 200 countries making it easy to spend safely whether you are spending around the corner or around the world.

• Verified by Visa. Visa is also aware of your awareness of credit card security and identity theft and so have recently added the Verified by Visa feature to their cards. When your bank issues you a Visa card, you can register with Verified by Visa and create a secondary password. Then, when you use your Visa credit or debit card with participating online retailers, they will ask for this second identification password, and will verify your password with Visa before processing the payment – someone using your card number fraudulently wouldn’t have this additional password, and the payment would not be authorized.

Non-credit Visa card options.

Visa also gives users the option to spend only their own funds, rather than accruing a balance which can then attract interest. Visa card users can choose to use a Visa debit card which looks and acts like a credit card, but accesses your own funds in your everyday account, rather than building up a balance you need to repay later. Visa also offer prepaid cards which can be charged with your own funds and given to teens as spending money for example, but once the prepaid amount is spent, the card stops working.

Zero liability.

If you notice a fraudulent purchase on your Visa card and you report it to your card issuer, Visa will credit you back the amount of the fraudulent transaction. Visa may also extend you extra credit to cover the cost of a fraudulent transaction which exceeded your limit.

MasterCard Credit Card Features

MasterCard is also a merchant processing system which allows banks all over the world to issue credit to their customers. So rather than comparing the rewards points or the interest rates of a MasterCard, consider the features which are actually unique to a MasterCard, not the issuer:

Almost equal acceptance to Visa cards.

Beginning operations in the mid-1960s, MasterCard is slightly behind the game compared to Visa. However, it is still one of the most widely accepted credit cards in the world, and there are now few places which accept a Visa card, which don’t accept a MasterCard.

MasterCard SecureCode.

MasterCard also has a double layer security verification system for online purchases which allows you to set up a code you can use when making online purchases. You simply need to look for the SecureCode symbol at an online store and you can be sure your purchase will be protected with an added level of security.

Spend your own money with MasterCard debit card.

A debit card allows you to make fast and secure purchases online just as you would with a credit card, but instead you are accessing your own funds, so when you spend all your money for the week, you can’t go on living beyond your means, but you learn to curb your spending to what you can really afford.

Protect your shopping.

Eligible MasterCard holders can enjoy price matching services and purchase protection, as well as extended warranty on eligible purchases which often goes beyond the manufacturer’s warranty on the product.

American Express Credit Card Features

American Express operates their credit cards in over 130 countries, but they are often seen as being far less accepted than MasterCard or Visa. This is often because American Express charges a higher merchant fee to the merchants who accept your payment on an American Express credit card and where a MasterCard or Visa card merchant fee is around 1% of the transaction cost, American Express can be as much as 4%. To understand how and why American Express credit cards appear to be more expensive to use, you need to know more about the American Express business and offers:

American Express works hard on their brand, and it works.

American Express has invested a lot of clever time and money into making their brand synonymous with prestige and affluence, using celebrities in their advertising and promoting not just a card, but a lifestyle. As a result, they have attracted a lot of prestigious and affluent credit card customers.

American Express is offering their affluent customers to merchants.

Since American Express are so confident in the affluence of their client base, they charge a higher merchant fee because they can – if a merchant refuses to pay the American Express merchant fee and not accept the cards, they are also turning away affluent customers, and no business wants to lose customers with a lot of money.

American Express controls each level of credit card issuing and use.

Where MasterCard and Visa are the merchants of their cards and they have banks around the world issue their cards, American Express are the merchants and the issuers of their card. This means they process the transaction, issue the card and act as the network link between your bank, and the bank of the person you have just made a payment to. This means that American Express is able to keep more of their merchant interchange fees, rather than paying a third party at each step in the process, and this means they can offer greater rewards with their credit cards.

World famous rewards programs.

American Express credit cards typically come with double points for every dollar spent rewards points schemes, and offer more attractive rewards once you have reached a certain points balance.

Surcharges or refusals.

Not all merchants are willing to absorb the costs to accept an American Express credit card just to attract affluent customers and some will refuse to accept American Express cards and others will charge you a surcharge. This can sometimes be as much as the full 3-4% merchant fee on top of your purchase.

Expanding the reach of American Express.

While American Express is typically the issuer of their credit cards, they have recently begun allowing other banks to issue their cards. This means you can have an American Express credit card linked to your ordinary MasterCard or Visa credit card as a companion card, to enjoy the rewards. American Express has done this to expand its reach where their cards are not yet widely used, however, this can mean that an American Express card issued by your own bank carries the same surcharges from some stores, and is not accepted at others.

Now you can decide whether a Visa card, a MasterCard or an American Express card will best suit you, you can compare the features of the individual credit card offers and negotiate with the issuer of the card on the features they can control.

Alban is a personal finance writer. He helps people to compare the best credit cards online.

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