The Credit Card Wars: Visa, Mastercard, Discover, and American Express

Katie McBeth  | 

In our minds, credit cards work much like our cell phones. We all have a different network (Verizon, AT&T, Sprint, etc), and we all have different models (Apple, Samsung, Google, etc), but as long as the phone works for us, then we’re not complaining.

But when you’re shopping around for your first cell phone, you have to do your research. The same goes for your credit card. Although your first credit card might be the one your bank offers, or something tied to a retail outlet, you still need to do some research on what card will work best for you. Or maybe you’re shopping around for your first business credit card. How do you choose between the four main card companies?

Here’s some information on what each card offers, and how it might best fit your personal wallet or your business wallet.

Defining the Issuers and Networks

Before diving in, it’s important to understand the terminology commonly used around cards. Just as described above with the cellphone analogy, there is the network and the issuer.

The network is the card type: Visa, Mastercard, Discover, or American Express (Amex). These are also known as the payment processors. Unlike the issuer, they pose no credit risk to the consumer. They are simply a conduit to get the money from the bank (issuer) to the merchant (coffee shop, store, retail outlet, etc). They make money by charging a “swipe fee” to the merchant in exchange for processing the transaction.

The issuer is the bank (or entity) that is loaning you the money and extending credit. Sometimes these issuers are hidden, as is often the case with many retail or sponsored cards.

Your favorite clothing store or big box retailer may offer you a credit card bearing their brand, but since they are not banks, they are not the ones actually lending you money. These are known as “affinity” groups. They likely partnered with a bank to offer targeted rewards for repeat customers, but their primary goal is branding and advertising, not providing lines of credit.

American Express and Discover are unique compared to Visa and Mastercard. This is because Amex and Discover can act as both a network and an issuer; they are a bank and a credit card company. Sometimes they will have an affinity or partnership with another entity (for example, Costco’s credit card was partnered with Amex until 2016), but for the most part they function by themselves. In more recent years, Amex has partnered with certain banks to act as a network for them, while the bank acts as the issuer.

Visa and Mastercard

Visa and Mastercard are two of the oldest credit card networks in America. They premiered the first credit cards in 1966, by branching off from Bank of America (Visa) and InterBank Card Association (Mastercard) respectively. Over time, they have also become the most popular options available.

According to a WalletHub study from 2016, Visa and Mastercard are both accepted by over 8 million merchants within the United States, and are accepted in over 200 countries around the world (210+ in Mastercard’s case). Their fraud protection is labeled as “Good” in this study, which shows some room for improvement.

Visa makes up approximately 48.8 percent of all credit cards used in the United States. Mastercard makes up about 31.3 percent. Visa is obviously a popular option, and their age as a company might have a lot to do with that. However, they do also offer guaranteed payment for merchants (meaning if you charge your card, but don’t have the funds, the merchant will still be paid; you will just have a nasty fee waiting for you on your next bill). Visa’s popularity might also stem from their options available to customers: debit cards, credit cards, or prepaid services.

Mastercard, on the other hand, offers only debit and credit services for their issuing partners. They do not offer additional services such as guaranteed payment, and their sole purpose as a company is to act as the conduit from bank to merchant.


Discover is only accepted by a fraction of the network that Visa and Mastercard have: 7 million merchants in the US, and only 49 countries. They make up about 10.7 percent of cards issued in America. However, where they shine is in their fraud protection, which is labeled as “Excellent” by the WalletHub Study from 2016.

Despite their relative lack of support from merchants, Discover offers some amazing benefits to card holders (you). In fact, their perks are exactly what they’ve built the business around. In the mid-1980’s, when they were a branch of the Sears corp., Discover commercials advertised the new credit card business as the only one that would offer benefits for the customers. Cash back rewards, no annual fees, and more drew in the attention of many people who were fed up with paying for their credit cards, which was typical at the time.

Since the early days, Discover has eventually become their own entity, separating from Morgan Stanley in 2007, and buying up Pulse in 2005 to build their network. They now offer debit services alongside their credit options.

American Express

The American Express company has actually been around since 1850, and has been offering charge cards to customers since the mid-twentieth century. However, their old system was specific to traveling and high-priced entertainment, and required full payments by the end of the month. Still, much of their modern-day marketing is aimed at the big-spenders and they are traditionally seen as a rich-man’s card company (some of the annual fees can get a bit pricey).

A lot has changed for Amex since those earlier years, and they are now a leader in the credit card industry, functioning as both a network and issuer. They — like Discover — only service a fraction of the industry, but they are certainly an influential card company. According to the 2016 WalletHub Study, they make up about 9.2 percent of cards issued, are accepted by 4.5 million merchants in the US, and are accepted in 160+ countries. They also have an “Excellent” rating for credit card fraud prevention.

One of the biggest issues that is brought up around the Amex name is their fees. Not for the customer, but for the merchant, through their swipe fees. Amex has historically charged a high swipe fee, turning off many small business owners and retailers to the service.

However, to curb this attitude, Amex began the Small Business Saturday tradition in an attempt to win favor from small businesses and their customers, as well as to support the network of small businesses throughout America. Small Business Saturday is held the Saturday after Thanksgiving, as a direct action against the ever-growing Black Friday (which traditionally only supports box stores and corporations).

This is only an example of the effort American Express puts into supporting both merchants and customers and building a community around their brand. To this day, they are a highly regarded company, and have a record of superb customer service.

Finding the Right Card for YOU

When it comes down to finding the right card, the search isn’t as simple as right and wrong. There are many cards that may cater to your needs, but ultimately the decision is in your hands to make the final choice.

Visa and Mastercard may have a hold on the market — and certainly their network of accepted merchants is a high selling point for many people — but Discover and Amex have a history of providing superb customer perks and services. You will have to decide what is right for you: customer service, or the places you can use the card? Are you traditionally a big spender, or are you looking to use the card on everyday small expenses?

Visa, Mastercard, Discover, or Amex; who will win the credit card wars and earn a place in your wallet?

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Katie McBeth is a researcher and writer out of Boise, ID, with experience in marketing for small businesses and management. Her favorite subject of study is millennials, and she has been featured on Fortune Magazine and the Quiet Revolution. She researches SEO strategies during the day, and freelances at night. You can follow her writing adventures on Instagram or Twitter: @ktmcbeth

This post was updated August 8, 2017. It was originally published April 29, 2017.