Published in: Credit Cards | Jan. 16, 2019

American Express vs. Discover vs. Visa vs. Mastercard: How Do I Choose?

By:  Eric Volkman

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It’s hard enough choosing between two major payment card brands. How in the world do you decide among four?woman selecting credit card

Image source: Getty Images.

In the credit card sphere, we Americans are spoiled for choice. There’s a card for everyone, it seems, whether they prefer traveling, earning cash back, or taking advantage of generous intro bonuses.

These waters are muddied even more by the fact that there are not one, not two, not three, but a whopping four prominent payment card brands. A host of Visa, Mastercard, American Express, and Discover products are available to us. How do we choose among this quartet of big players?

Issuers and processors

Before we set these companies against each other, let’s look at the major item that distinguishes them. Visa and Mastercard are open-loop operators, while American Express and Discover are both closed-loop.

What this industry jargon means is that Visa and Mastercard act only as processors of the payments made through their networks. Neither issues one cent of credit; instead, the issuer is a third party, typically a bank. 

Closed-loopers American Express and Discover act as both processors and issuers (that is, for the most part -- the former has a limited number of branded cards issued by outside parties).

What this means for us as consumers is that, since issuers design the offerings of their cards, there is a tremendous amount of variety with Visa- and Mastercard-branded plastic. There is less so with American Express and Discover.

Additionally, Visa and Mastercard are mass brands with many millions of cards outstanding throughout the world. American Express tends to be more exclusive, while Discover has always struggled for wide acceptance in a market dominated by its three big rivals.

Why you might choose Visa or Mastercard

Ubiquity isn’t the only reason to choose Visa or Mastercard. The two brands have a number of advantages over their closed-loop rivals. To name some of the major ones:

Promos and deals -- Since there are scores of Visa and Mastercard issuers, competition is heavy for potential cardholders. As a result, it’s common for issuers to offer juicy come-ons like intro bonuses, and 0% intro APRs for purchases and/or balance transfers.

Global presence -- Visa and Mastercard have much higher acceptance rates outside of the U.S. than their two rivals. Their cards, therefore, travel much better when an owner ventures abroad.

Native feature sets -- Issuers set many of the terms and conditions for the Visas and Mastercards they offer. But the two payment card companies each provide a set of features aside from what the issuer packs into the product. Visa and Mastercard each have three tiers of feature sets; generally features are more numerous and generous as you go up the tier ladder:


  • Standard
  • Signature
  • Infinite


  • Standard
  • Gold
  • Platinum

How do I choose between Visa and Mastercard?

If you’ve determined that an open-loop company should be your payment processor of choice, the selection boils down to Visa or Mastercard. This is where it might get tricky.

These days, the acceptance level of the two brands is nearly even -- it’s exceedingly rare to find a merchant that accepts only one and not the other. On top of that, those native feature sets for both brands are roughly similar at each of their respective three product tiers.

Ultimately, in my opinion, the choice between Visa and Mastercard comes down to the issuer. The card’s APR, rewards program and bonuses (if any) should be among the factors that matter, not the brand stamped on the plastic. Both brands are readily accepted in physical stores and online; you shouldn’t have much of a problem paying for anything with either.

Advantages of American Express

For many years, American Express cards were the elite card offers on the market. The company has been moving away from this somewhat and offers a wider array of consumer and business cards. These offerings are competitive with the consumer-focused Visa and Mastercards on the market, and should be considered along with them.

Still, American Express’s core offerings remain high-end cards. A more typical one in its portfolio is the famous Platinum Card® from American Express.

For those who have the budget, the credit profile, and the willingness to pay such a charge, but don’t mind the more limited acceptance at merchants, American Express membership has its privileges (to quote the company’s old ad line). Here are a few of these:

Lack of credit limit -- American Express’s core products do not have pre-set credit limits. Instead many are “charge” cards, meaning that you must pay the balance in full every month.

Membership Rewards® -- The company’s classic rewards program is justifiably renowned for its scope and range -- there are a great many products and services you can obtain with enough Membership Rewards® points.

Traveler perks -- American Express once had a thriving business offering travel itinerary and financial services. A vestige of this is the many and varied travel perks that come with its traditional card lineup, including but not limited to:

  • Airline ticket credits.
  • Full Global Entry and TSE PRE safe traveler program enrollment fee reimbursement.
  • Free access to the high-end airport lounges.
  • Monthly Uber credits.

Advantages of Discover

In a way, the apparent chief disadvantage of Discover cards -- their lower level of acceptance at merchants -- is actually an advantage. That’s because the company has to compete that much harder for a place in your credit card portfolio.

So Discover cards have quite a few useful pluses and perks that make them at least competitive with their Visa, Mastercard, and American Express counterparts. To wit:

Double rewards in the first year -- The money feature of Discover cards; the issuer matches your rewards dollar-for-dollar following the first year of card ownership.

No annual fee -- Not a single card in Discover’s current selection carries an annual fee.

FICO® Score for free -- Yes, this should be a standard perk for all credit cards, but it’s not. After all, our FICO® Score is a vital piece of information regarding our creditworthiness. Discover pulls its information from Transunion, one of the three major credit bureaus, and updates it regularly.

Good selection -- Discover has a credit card for nearly every type of need, including its recently-introduced Discover it® Business. 

Which is the right brand for you?

All that information is fine and good, you say, but we’re left with that nagging question. Of these four brands, how do I choose?

If it’s convenience and utility you’re after, it’s likely best to go for one of the open-loop brands, Visa or Mastercard. In addition to the benefits of convenience and utility, Visa and Mastercard both have a wide selection of cards from a ton of different issuers.

Since there’s so much choice it isn’t necessarily easy to find the most ideal product for your situation, so take the time and effort to research this properly. To reiterate, there isn’t a great deal of distinction between the two brands anymore, so your ultimate selection should instead be based on the card’s features and (if any) bonuses.

If you have a higher-than-average budget and you like to spend and collect rewards for doing so, perhaps it’s better for you to choose American Express. The high costs of ownership become worth it when the rewards kick in, and the rewards kick in with assertive spending.

Although American Express’s acceptance level is lower than that of its rivals, most merchants selling relatively high-end products or services will gladly take the card.

Finally, we have Discover. In some ways, we can consider the issuer’s card family to be something of an American Express-lite. That’s because these products can be quite rewarding if used actively, particularly after the first year of ownership with that potentially very lucrative Cashback Match.

Acceptance can be an issue with Discover cards, however, so I wouldn’t recommend owning one as your only credit card. Rather, it’d be a good move to pair it with a Visa or Mastercard, using the second card as a backup for purchases where Discover isn’t accepted.

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