What is a Visa card?

Written by

Bankrate Staff,

Edited by

Liz Bingler,

Reviewed by

Mariah Ackary,

Expert verified

Published on March 10, 2022 | 4 min read

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No doubt you’ve seen the Visa logo on a credit or debit card before—but what exactly is a Visa card, and how does it compare to Mastercard? And does it matter which one you choose when deciding on a credit card?

In this guide, we’ll take a closer look at Visa, how it compares with Mastercard, and some common credit card terms that are helpful to know if you’re just getting started with credit cards.

What is Visa?

Put simply, Visa is a payment network. When you buy something with a Visa card, Visa processes the payment, instantly communicating with your bank and the merchant so that the merchant gets paid. This happens whenever you swipe your card, regardless of whether you’re shopping in person, or on your laptop, tablet or cellphone.

Mastercard, American Express and Discover are also payment networks, but Visa and Mastercard are undoubtedly the most widely accepted networks.

What is the history of Visa?

Visa’s operations began in 1958 when Bank of America launched the BankAmericard® credit card. It was the first consumer credit card program, and it brought the company great success, allowing it to expand operations internationally in 1974. In 1976, BankAmericard became Visa—a name that sounded the same in all languages.

Visa continued to grow as regional businesses around the world merged to form Visa, Inc. in 2007. A year later, it went public in one of the biggest initial public offerings (IPO) in history. Today, Visa operates in more than 200 countries and territories, with the mission “to be the best way to pay and be paid, for everyone, everywhere.”

Of course, those who are shopping for a credit card often prefer one that’s widely accepted. The more Visa dominates the global payment network industry, the more it attracts new consumers and merchants.

How does a payment network differ from a card issuer?

Despite Visa’s popularity, there is often confusion around what a Visa card’s role is when it comes to credit card benefits. American Express and Discover, for example, serve as both the payment network and credit card issuer. However, unlike American Express and Discover, Visa does not issue credit cards; it is solely a payment network.

Instead, financial institutions like banks—such as Chase, Capital One and Wells Fargo—issue credit cards, and Visa serves as the communication line that allows payment transactions to be processed. A credit card issuer—not the payment network—administers rewards programs and credit card perks, and determines borrowing terms like interest rates and fees.

Visa vs. Mastercard

In practice, Mastercard is almost as widely accepted as Visa. But both payment networks offer additional benefits to credit card members just for being a part of their network, and that’s how Visa and Mastercard differ. Generally, Visa’s benefits are more focused on travel and protection, while Mastercard focuses more on discounts and promotions.

Visa benefits

Visa offers three main tiers of benefits: Traditional, Signature and Infinite.

Traditional tier: Includes zero fraud liability, emergency card replacement and cash disbursement, an auto rental collision damage waiver and emergency roadside service.
Signature tier: Includes all of the Traditional benefits, plus 24-hour travel and emergency assistance.
Infinite tier: Includes all of the other tier benefits, as well as travel accident protection, trip cancellation and interruption protection, trip delay reimbursement, lost luggage coverage (up to $3,000 per trip or $2,000 per bag if you live in New York), return protections and purchase protections.

Mastercard benefits

Mastercard also offers three main tiers of benefits: Standard, World and World Elite.

Standard tier: Includes emergency card assistance and replacement, zero fraud liability and identity theft protection.
World tier: Includes all of the Standard benefits, plus trip planning, travel upgrades, concierge service and numerous discounts and promotions. Current promotions include three free months of DoorDash DashPass for new members, a free Shoprunner membership, a $5 Lyft credit if you take at least three rides per month and more.
World Elite tier: Includes all of the previous benefits, along with exclusive offers and more discounts and promotions. Current promotions are the same as the World promotions, plus access to exclusive PGA Tour experiences and VIP travel experiences (like cooking classes abroad, tours or personal shopping services).

Credit card terms to know

If you’re new to the world of Visa, Mastercard and credit card issuers, it’s helpful to know some common credit card terms.

Annual fee: Credit card issuers, like banks, may issue a yearly charge to customers for using their credit cards. Payment networks such as Visa and Mastercard do not determine this charge.
Annual percentage rate (APR): This is the full cost a lender charges per year for lending funds. Visa does not determine the APR, or interest rates, on a credit card product. If you pay your balance in full and on time, you can avoid paying interest on your purchases.
Balance transfer: This involves moving outstanding debt from one account to another. Those with credit card debt commonly use a balance transfer credit card that allows them to pay off debt with 0 percent interest over a select period of time, such as 12 to 21 months.
Credit history: Used by a lender to determine whether to approve a credit card application. It shows how the applicant has managed credit in the past, including how much debt they owe, the number of credit lines they have and whether payments were made on time.
Credit rating: Usually expressed as a score and represents a person’s ability to repay a financial obligation based on their income and credit history. Three credit reporting agencies—TransUnion, Experian and Equifax—supply credit ratings and credit scores in the U.S.

The bottom line

Visa is undoubtedly one of the largest and most recognized payment networks in the world, making it a safe network to go with if worldwide acceptance is important to you. But keep in mind that Visa doesn’t administer rewards programs, dictate interest rates or set credit card fees—a credit card issuer handles that. When choosing a credit card, it’s critical to consider these aspects of what a card issuer offers—and not only widespread card acceptance—so you’re sure to get a card that meets your needs.