There are thousands of different Visa credit cards, each with its own credit limit, fees, and special offers. When you apply for a Visa credit card, most of the important details are actually determined by the bank backing the card (also known as the card-issuing bank). Here's what you should know about credit cards that carry the Visa logo.
Why Visa credit cards?
There are a few relatively small benefits of having a Visa credit card compared to a card on a competing credit card network.
- Costco eligible -- Visa cards (debit or credit) are the only cards accepted at Costco stores. For this reason, if you do a lot of shopping at Costco, it makes sense to prioritize Visa cards over cards on other networks.
- More merchants -- Visa and Mastercard have roughly the same acceptance rates in the United States. Discover is accepted in slightly fewer locations. Merchants (particularly mom-and-pop shops) are least likely to accept American Express cards, due in part to the higher fees they pay on AmEx cards.
- International acceptance – If you do a lot of traveling overseas, you probably want a Visa or Mastercard credit card. American Express generally has less acceptance overseas, while Discover is generally regarded as primarily a U.S.-only card network.
Visa and Mastercard are known as "open-loop networks" who partner with banks. The banks do the actual lending, whereas Visa and Mastercard provide the "pipes" on which payments flow from one party to another. In contrast, American Express and Discover are so-called "closed-loop networks," which means they serve as the network for payments as well as the bank that supplies the financing to cardholders.
Visa credit card perks
Visa cards range from largely featureless cards for people who have lower credit scores to the very best rewards cards for cardholders with high incomes and high credit scores. Here at Fool.com we keep "score" of the best cards in every category, and the truth is that virtually every card network, including Visa, is well represented in each category.
Issuer-specific benefits can include automatic price protection, primary insurance for rental cars, and other benefits that are provided by the card issuer on Visa cards. Some Visa cards, particularly higher-end Visa Signature cards, are known for having what Visa calls "an added layer of privileges," including:
- Extended warranty – Add one year to a U.S. manufacturer's warranty of three years or less on eligible purchases.
- Concierge – Enjoy completely free 24-hour assistance with hotel and restaurant reservations, travel arrangements, shopping, and more.
- Auto rental collision damage waiver – Get insurance coverage for damage to rental automobiles when the full purchase is made with an eligible Visa card.
Of course, benefits come with important fine print that can differ from card to card, but these perks are just some of the most common with Visa cards in particular.
Visa credit card limits
Credit limits can range from a few hundred dollars to potentially millions of dollars for the ultra-wealthy or for business customers.
Some cards have theoretically unlimited credit limits -- these are labeled as cards with "no preset spending limit" -- but the reality is that every lender ultimately has a cap on just how much they're willing to lend any given borrower.
The size of your credit limit may impact the type of Visa credit card you receive. Several issuers note in their terms and conditions that only cardholders who receive a credit limit of $5,000 or more will receive a Visa Signature card. Cardholders who have a credit limit of less than $5,000 will receive a traditional Visa. Visa Infinite cards are reportedly only handed out to cardholders who have a credit limit of $10,000 or more.
Whether or not the distinction actually matters from the cardholders' perspective is up in the air. Again, because most benefits are afforded by the issuer rather than the network, the difference between Visa, Visa Signature, or the somewhat-rare Visa Infinite card is moot, in many instances. (If this all sounds like the gold or platinum cards of the past, well, they say history doesn't repeat, but it does rhyme.)
Is a Visa card the right choice?
Truthfully, the payment network is really only important when it comes to acceptance. A Visa card is helpful if you shop at Costco, travel overseas, and want to almost guarantee that virtually every merchant who accepts credit cards will take your credit card.
But the really big, difference-making perks -- cash back rates, travel rewards, or 0% APR promo periods -- are determined by the issuing bank, not the card network. For this reason, whether a card is Visa or Mastercard is perhaps less important than which bank is providing the financing.