You probably haven’t thought much about the differences between Visa, MasterCard and American Express. Most of us are more concerned with how many points or miles you can earn, and what rewards you can get.
But I bet that when you’re considering your options for a new card there’s a little voice in the back of your head wondering if there are important differences between the three big payment processors. In this post I’ll touch on some of the basics and take a closer look at the all-important travel benefits.
To start with, Visa and MasterCard do not issue their own cards. Instead, they work like middlemen between the bank and the store owner, allowing the two parties to talk to each other in order to process payments. The bank is the actual issuer of the card and, in turn, it determines the various rates and fees, as well as some of the benefits.
American Express, on the other hand, owns its system from top to bottom. Amex issues the cards, processes payments, determines interest rates and fees, etc. If you have an Amex card, you are working directly with American Express, not another bank.
What does this mean to you? Visa and MasterCard provide a certain number of benefits to all cardholders, but additional benefits vary by the bank issuing the card. To complicate things further, there are different levels of cards, too, which offer different perks. The Visa Signature and World MasterCard, for example, offer better benefits than the standard Visa and MasterCard.
There are fewer Amex cards on the market, and most of the benefits come directly from American Express. You can, though, get added perks from a third party if the card is co-branded (like Amex’s line of Delta cards). Also, the more premium Amex cards, like the Platinum card, come with more benefits.
In short, it’s complicated when it comes to card benefits. Whichever card company you go with, you should check the fine print to see what comes with that specific card. Below, I’ll cover some of the basics when it comes to benefits offered directly by the card companies. I won’t be covering the perks offered by third parties like airlines or hotels who have co-branded cards, or from issuing banks, such as Citi or Chase.
Keep in mind, though, that the third party perks are probably the most valuable benefits that come with a card. Most of us are interested in getting cards because they allow us to earn points or miles with rewards programs or airlines we use.
In any case, once you get down to the level of cardholder benefits, there aren’t that many differences. In fact, on that level these cards have more in common than not. All of them offer purchase protection, zero liability, fraud monitoring and extended warranties on purchases. Some offer car rental insurance, online marketplaces and travel insurance.
Rental Car Insurance
All Visa and Amex cards come with some sort of coverage, but only some MasterCards do. The level of coverage can also vary. You’ll need to check with the issuer to find out the specifics for each card.
The standard rental car insurance offered by a credit card is secondary. That means that the card will pay for costs not covered by other insurance you may have.
In other words, your personal car insurance, which typically covers rentals, will be billed first and the accident will go on your record, potentially affecting your rates, etc. Keep in mind that you’ll also be on the hook for the deductible.
A few cards come with primary rental car insurance. With that coverage, you don’t have to contact your insurance company and all costs will be handled by the credit card company. American Express offers this with any of its cards if you pay an additional fee of about $20 (it differs with the level of coverage).
The Chase Sapphire Preferred card is another option if you want primary coverage. Note that you can get this card as either a Visa or MasterCard and that the primary insurance is offered by Chase in either case.
Lost or Delayed Luggage Insurance
Most American Express cards come with some sort of lost or delayed baggage insurance. They include some no-fee cards, like the Hilton HHonors card, and many of the midlevel and premium travel cards, such as the Premier Rewards Gold card and the Delta Reserve card.
To be eligible for the benefit, you need to purchase your tickets with the Amex card that offers the coverage. If your bag is lost or damaged, you’ll typically get up to $500 per bag. Delayed bags usually qualify for $100 a day for up to three days.
Depending on the issuer, you may get some luggage coverage with a standard Visa card. All Visa Signature cards, on the other hand, come with up to $3,000 in coverage for lost or damaged bags and $100 a day for up to three days for delayed bags.
Like the standard Visa cards, the standard MasterCards may include some coverage, depending on the issuer. The World MasterCard, though, includes delayed luggage insurance of $100 a day for up to three days. It also offers a baggage tracker to help locate lost bags, but it does not include reimbursement for lost luggage. Some card issuers may offer this benefit, though.
All three card companies offer emergency travel hotlines of some sort. That means you can call the 24/7 service number and get help with whatever issue you may be having. It does not mean that the card company will cover the costs if you need to hire a third party, such as a translator or taxi.
Amex, Visa Signature and World MasterCard offer travel accident insurance. In the case of death, they will cover a certain amount of the travel costs for returning home. The level of coverage depends on the card.
None of the card companies offer trip cancellation insurance, but Amex allows you to buy that additional coverage, and some issuers will include it with their cards. Chase, for example, will reimburse you up to $5,000 if you need to cancel or delay your trip if you’ve purchased your travel with the Sapphire Preferred card.
Whatever coverage you have, only some circumstances qualify for reimbursement, such as illness, bad weather, terrorist attacks, changes in military orders, etc. You can’t change your plans on a whim and expect to be covered.
Visa Signature and American Express cards automatically include roadside assistance, whereas MasterCard differs by issuer. The level of coverage depends on which card you have.
Basic coverage includes a hotline you can call and they will help organize the assistance you need. The phone call is free, but the additional third party service, like a tow truck, is not.
Some premium cards include complimentary tow truck service as part of their perks. The Amex Platinum and Premier Rewards Gold cards, as well as Citi’s Prestige and AAdvantage Executive cards, offer this benefit.
Online Travel Center
American Express is the only company that provides its own rewards program and online travel portal. Not all Amex cards give you access to the Membership Rewards program, though. Cash back cards, such as the Blue Cash EveryDay card, and co-branded cards, like the Delta SkyMiles and Hilton HHonors cards, are not a part of Membership Rewards.
While you can purchase travel through the Membership Rewards website, the best aspect of the program is that you can transfer your points to 16 frequent flyer programs, which is more than any other rewards program.
Some Visa and MasterCard issuers offer similar services, including Citi’s ThankYou and Chase’s Ultimate Rewards. Both are excellent programs, but neither are offered directly by the credit card company.
Which Card Company Is Best?
There’s no good answer to this question. Visa, MasterCard and American Express all offer similar cardholder benefits, and those benefits vary depending on which card you get.
To complicate things further, the issuer of the card may offer supplementary or additional perks. Always check the fine print and don’t be afraid to call if you have questions. These things can get confusing fast.
Generally speaking, you’re probably going to choose a card based on the rewards program, airline or hotel it’s associated with, and/or because of its earning potential. From there, I’d research whether the card offers the additional benefits I might want, like car rental insurance or trip cancellation coverage.
With that in mind, I do have a few final thoughts. American Express consistently ranks highly for customer satisfaction. It offers a great product that includes a well-designed website and app, customizable email notifications and excellent customer service.
That’s great, but Amex isn’t accepted by as many businesses as Visa or MasterCard. So no matter how much I might like to deal with Amex, I would never do without a Visa or MasterCard in my wallet.