Credit cards can be helpful but confusing. With all the different names and commercials we see on TV, it may be difficult to determine what the differences are between all these companies and cards they advertise for. Four major credit card companies are contrasted below:

-Visa – Visa is a payment network, which means they don’t specifically handle the credit cards themselves. Instead, the credit cards are issued out by banks or credit unions, and they handle the interest rates and other specifics of the card themselves. These issuers also take the hit if you don’t happen to pay off your credit.

-MasterCard – MasterCard is also considered a payment network. Just like Visa, MasterCard is mainly a middleman between banks and individuals. Both Visa and MasterCard are widely accepted, but many consumers opt to have a card for each company just in case one isn’t accepted at a restaurant, retailer, etc.

-American Express – AmEx issues their own cards and historically is kind of known to be a sort of “exclusive” lender. They originally started out competing with the U.S. Postal Service in the late 19th century and was one of the first companies to create traveler’s checks. Their annual fees were initially very high and they only promoted the use of charge cards. However, they are slowly moving over to a payment network setup.

-Discover – The Discover Company was first created by the retail giant, Sears, and now implement their own plastic cards through Discover Bank. Discover cards aren’t as widely accepted as Visa and MasterCard but are still popular since they provide “cash back” options when you make certain purchases.

Fundamentally, each of these companies has the same function, which is to provide you with a credit card. When looking for a card, make sure to compare interest rates, annual fees, spending limits, and possible rewards such as frequent flier miles to determine the best card for your situation.  There’s lots of resources available on the various types of credit cards, so just make sure to do your research.