While thousands of banks issue credit cards, those cards are generally part of a credit card network. The most common credit card networks are Visa, Mastercard, American Express, and Discover.
The networks themselves are generally of no concern to you, as most of your interactions regarding your card are with the creditor (the bank). That said, you’re probably aware of these networks, because certain retailers only accept certain types of cards. If you have an American Express or Discover card, you’ve probably found out more than once that a retailer doesn’t accept that card. Why is this? For one, each network charges different fees; another has to do with the popularity of the network. Retailers try to find a happy balance between serving their customers and keeping their costs low. Amongst the four major networks, Visa accounts for more than 50% of the market, while Discover only makes up 5%!
As a bit of trivia, have you ever wanted to know how some online forms can detect which type of card you have based on the number alone? Regardless of the issuing bank, the credit card network determines what the first digit in the card is. American Express cards start with 3, Visa cards start with 4, Mastercard cards start with 5, and Discover cards start with 6.
Most everyone is familiar with the major perks of their credit cards. You might have cards that you use because of low interest rates, no annual fees, a high cashback percentage, or rewards that you earn and can use toward hotels or airlines. What many people do not know is that the credit card network itself may offer certain benefits as well. Usually, a pamphlet is sent to you regarding these when you get the card, but most people toss it without looking at it!
Without getting into the specifics of every single network, card type, and benefit, I did want to mention Visa Signature benefits. Not every Visa is a Visa Signature and, strangely enough, banks can choose whether they offer certain Visa Signature benefits. That said, I want to discuss a few of the benefits that you’re likely to see on a Visa Signature card, because they’re fairly common and quite useful.
One useful benefit is roadside assistance, which includes towing, tire changes, jump starts, a locksmith, or fuel delivery. Many people have some form of this in one way or another: It may have been included when you purchased your vehicle, you may pay for AAA, or it may be part of your auto insurance. If you don’t anticipate using this service or, historically, you don’t need it, then it may be more cost-effective to not pay for it and instead use the Visa Signature benefit instead. Each call typically has a flat fee associated with it. In my experience using it, that’s around $50 and is automatically charged to the card. Lastly, some fine print stuff here: If you use it for fuel delivery, you’ll be charged for the cost of the fuel and you only get a tow of up to 5 miles. A tow in excess of 5 miles will be charged additional fees, which is the same policy that AAA uses for their regular plan.
Do you add on insurance when you rent a car? First off, your normal auto insurance may cover you, so make sure to find out from them what your coverage, if any, is. Aside from that, there’s a benefit where you get collision damage on rental cars, although you must rent the car with the Visa Signature card.
Want to skip the long lines at the airport by using Global Entry, but don’t want to pay the $100 application fee? Visa Signature will reimburse you the $100 so long as you put it on your Visa Signature card.
Other travel reimbursement perks with Visa Signature include lost or delayed luggage, delayed trips, checked luggage fees, and in-flight food. Additionally, they maintain 24/7 worldwide phone assistance for travel and emergency-related assistance matters such as legal issues, medical transportation, translation services, and prescription assistance, although there’s a fee for these. If you’re without cash, they can send money to a Western Union branch within a couple of hours.
Paying extra on your cell phone bill for a better warranty or replacement if the phone breaks or is stolen? So long as you pay your cell phone bill, you can have the phone replaced. Most cell phone companies offer this benefit for a fee (usually in the $10 range), but you have to pay it from the moment you get your phone and if you ever stop paying it, there’s no way to get it back. Additionally, the deductible can be $200 or more! With Visa Signature, the deductible is only $50 and the only requirement is that you pay your previous month cell phone bill with that card.
Many items you purchase probably come with manufacturer’s warranties. If you buy them with a Visa Signature card, it covers up to one year additional warranty. If you have the option to purchase an extended warranty, you may want to just rely on the Visa Signature benefit for free instead.
Bought an item, the price dropped a couple weeks later, and the store wouldn’t give you the difference? Buy something and it’s stolen within the first few months? Items stolen from a hotel room that you paid for with your card? Have emergency doctor’s bills while on a trip? Need a medevac while you’re on a trip? All of these are covered.
Most people aren’t aware of these benefits and many of them are quite useful! To find out more details about your specific card benefits and card network benefits, you should search online, or contact your card issuer to find out more information.
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Fees on credit cards: Kevin, you control the fees you pay on a credit card. Pay your bill on time, pay off in full each month and don’t go over your credit limit and you pay no fees.
Businesses like credit cards because people tend to spend more when using a credit card. Businesses pay about 2% for the privilege but that 2% provides a lot of benefits: Increased sales, less cash on hand at the business and quicker transactions. Do you have anything that shows businesses raise rates when they accept credit cards?
Not exactly: Kevin, you decide when you sign up for a card if you want to pay the annual fee. Entirely in your control. There are tons of no annual fee credit cards so you completely control that fee. You also control cash advance fees, balance transfer fees, etc by how you use your card. I have never heard of a sign up ( unless that is what you call an annual fee). There have been a ton of studies done on spending habits of credit card users. The one that comes to mind is when fast food places started taking credit cards. Sales went up about 25%. And you are ignoring the benefit of credit cards to businesses. Less cash to handle, better customer tracking). I’d have to check the 3 -4 % number. That sounds like what American Express used to get. I doubt it’s that high anymore.