MasterCard/Visa -- What's the diff anyway? And what the hell is Diner's Club?

So Unca Cece and fellow minions,

What’s the difference between MasterCard and Visa anyway? As far as I can tell, they’re one and the same, but if that’s so, why have both? I only ever see Visa advertised, but I’ve NEVER seen a store that took Visa but not MasterCard, or vice-versa.

And while we’re at it, what’s the deal with Diner’s Club… Is it a credit card? I’ve only even seen one once, and rarely recall seeing one of the little “we accept Diner’s Club” stickers posted along with the Visa/MC AmEx notices. Do they have a market? Are they solvent? Are they gonna give up and drop the whole thing soon? Do you have to eat out a lot to get one? I mean, I’m deluged with offers for Gold this and Platinum that, but never once Diner’s Club… Is it something that only the mega-rich get? Do you have to know a secret handshake? Is there some reason it’s desirable?

I don’t know the specifics about Visa/MasterCard. The real profit goes to the individual banks that issue the cards. Visa and MasterCard just fascilitate the transaction for a small piece of the banks’ action.

As for Diner’s Club; it’s the granddaddy of all credit cards and has been around since the 40s. Like most innovators, Diner’s Club pretty much was left in the dust by other companies that improved on the original idea. One of the driving forces behind the early success of Diner’s Club was Matty Simmons who used his share of the profits to launch National Lampoon Magazine. His book, “Buy this Book or we Shoot this Dog” spends about half a page on his first big business success (Diner’s Club) and the next 300 pages about his second (National Lampoon). I admire a man who has priotiies straight!

Diner’s Club was invented for restaurant use. It was one of those Jeopardy style questions on tv yesterday.

Diner’s Club cards has evolved into something called Carte Blanche. You will see their signs every once in a while (in sticker form) below the major credit cards accepted window sign. I would never have known this except that a friend of mine works for Anderson Consulting in Atlanta, and for some unknown reason it is/was their card of choice.

OK, just remember, you asked.

Visa U.S.A, Visa International and MasterCard International are similar associations of banks which issue credit cards. They are not really competitors, as the associations make no money, but set general parameters for use of the name. The assiciations do not set rates, each individual bank set thier own. Many banks belong to both groups and issue both brands. Both Visa and MasterCard associations prohibit memebrs from issuing credit cards other than MC or Visa. Competition comes from “non-bank” credit cards like American Express, Carte Blanche, store cards, gas cards, etc.

Want a short history of MC and Visa? I thought so.

MasterCard (remember when it was Master Charge?)
1951 - Franklin Nat’l. Bank issues first true credit card for use with certain local merchants. Other banks followed with their own credit cards and authorized merchants.
1966 - Some of these credit card issuing banks formed Interbank Card Asociation (IBC) to standardize credit card processing and consolidate participating merchants. IBC later became MasterCard International.

1958 - Bank of America in CA mass mailed 60,000 credit cards to customers. The card was called BankAmericard (remember that name?).
1966 - The concept caught on with merchants and consumers, so B of A began licensing the BankAmericard name to banks accross the nation.
1970 - B of A turned over it’s BankAmerica licensing program to National BankAmericard, Inc., an asociation of BankAmerica issuers. BankAmericard was later rebranded as Visa and National BankAmericard, Inc. became Visa USA.

Now you know.

The overwhelming majority of people have more than the average (mean) number of legs. – E. Grebenik


Does anyplace actually take Discover which is, I gather, the Ford Escort (if not the Yugo) of credit cards…

Does anyplace actually take Discover which is, I gather, the Ford Escort (if not the Yugo) of credit cards…

A recent episode of Futurama had joke about this:
Fry: Do you take MasterCard?
Clerk: They went out of business 400 years ago.
Fry: Visa?
Clerk: 500 years.
Fry: How about Discover?
Clerk: Ooooohh, we don’t take Discover.

DrEvil: Not only are there places that take Discover, there are some places that ONLY take Discover. They must get some kind of benefit for doing so, because otherwise it doesn’t make a lot of sense. I suspect that Discover reduces or waives transaction fees to businesses that only accept their card, but that’s just a guess.

In fairness to Discover,I notice that a lot of places accept Discover, in addition to Master Card and Visa. I have never seen a place that only accepts Discover–must be a Sears store since they started the card.

(I usually save 33 cents a month by paying my Discover card bill at my local Sears store. Ironically, they still try to push me to sign for a Sears card, but I don’t go to department stores often enough for it to be worth it. Besides, why should I when I know they take Discover?)

Interesting that Visa and Master Card don’t seem to go after Discover anymore, but rather American Express. I have no idea why this card is worth paying $40 a year for except snob appeal. My Dad says it was worth it when my Grandma was sick and he had to make sudden travel arrangement at the last second–American Express has no credit limit. But I have nearly $30,000 of credit limit on three cards. If I have to spend more than that in one month, I’m going to want to call Guido the loan shark instead of Karl Malden.

“You will bow down before me, Jor-El!
I swear it! You will bow down before me,
and then, one day, your heirs!”
Superman: The Movie

Actually, I feel the reverse: I don’t use anything but American Express… I’m amazed at how often people don’t realize that Visa and MasterCard are just a way to run up high interest debt and perhaps earn points rigidly tied to a specific airline, car maker, etc. Here’s why I use AmEx:

  1. Yes, the no set spending limit thing is nice. If I’m taking business associates out, I don’t need to worry about if I’m near my limit. If I do a lot of travel in a month and need to charge $50,000, I can… etc…

  2. Points: I’m not tied to one airline or whatever. I earn AX points which I can apply to any number of airlines, hotels, car rental companies or use 'em for merchandise as I see fit

  3. Customer Service: I have NEVER had a Visa/Mastercard that didn’t come replete with rude and or unhelpful “service.” Whether I need to question a charge, find out about services, etc. etc. I am helped quickly, pleasantly and efficiently, and that’s held up year after year

  4. Other Benefits: I can get into many airline clubs with my card, whether I “belong” to them or not. I get free companion tickets on many trips when I use the card to buy tickets. I get special/advance seating for sports and theater events. I get special discounts and pre-reserved seating at restaurants that are featured each month. I get full coverage on any car I rent without paying their ridiculous insurance add-on fees.

And those are just the ones I’ve actually USED, there are more…

And no, I don’t work for them, I’m just continually impressed by what I get above/beyond a plain old “charge card”

As a Reservation Mgr who handles chargebacks and no show disputes from Credit Card companies I can tell you one thing. American Express fights TOOTH AND NAIL for their clients. I have had actual signatures of guest on forms stating they will pay a bill and AMEX still fights for their clients when they dispute it. If I ever need to purchase something big I’d do it with AMEX. If something goes wrong they are on your side.

Also AMEX has the advantage where you can restrict use to air and rail travel or what ever you want. That by the way is an old con game we Res Mgrs know to well. You guarantee your res for the hotel with a restricted AMEX card and then if you don’t show up you can’t be billed. If you are tempted to do so beware. The first thing I do in the morning is authorize the card and if it’s restricted I cancel your reservation and you are out of luck. (note: hotels guarantee reservations to VALID credit cards only)

I was under the asumption that Diners Club, at least nowadays, was a discount card. The type that you pay a substantial monthly/yearly fee, but if you use the card to pay for meals, and other services that are affiliated with the card they deduct a substaintial amount from the bill on the order of 10%. If you are the type who travels often or entertains clients and guest regularly the saving far outweighs the monthly fees.

Plenty of places take Discover.


The place (or one of them, at least) which only takes Discover is Costco (or Price Club/Costco, these days). Obviously, they get some sort of kickback from Discover Card in exchange for making it the only credit card buyers can use in their store.

Chaim Mattis Keller

“Sherlock Holmes once said that once you have eliminated the
impossible, whatever remains, however improbable, must be
the answer. I, however, do not like to eliminate the impossible.
The impossible often has a kind of integrity to it that the merely improbable lacks.”
– Douglas Adams’s Dirk Gently, Holistic Detective

Mastercards always start with a 5.
Visa’s with a 4
American Express 3
Discover…I think 6.

Sears Roebuck rescinded their “Discover cards only” policy when they realized they were losing tons of business (DUH) by refusing MC and Visa. They THOUGHT they could force people to accept their card by saying “You can’t shop at Sears unless you subscribe to our credit line” but what really happened was people (myself included) said “Well, screw you. Not only will I not shop at Sears, I won’t try your stinking nobody-takes-it-but-you credit card, either.”

Sears, ever the arrogant retailer got into serious financial trouble during this period and have recovered only in the last two years or so.

One thing that nobody seems to have mentioned:
MC/Visa/Discover/Optima are CREDIT cards - that means they extend you credit.
Amex & Diner’s Club are CHARGE cards, which means you need to pay off your bill every month. Since I use all my credit cards as charge cards anyway, I’ve never felt a need for a charge card (especially one that I need to pay an annual fee for).
Incidentally, Diner’s Club/Carte Blanche is now owned by Citicorp, and is considered a T&E (Travel & Entertainment) card (although it is not a discount dining card; you may be thinking of “Dinner-on-us”). When I was a Citicorp employee, we were supposed to use our Diner’s card for all work-related expenses, if accepted; otherwise, another Citicorp card.

I remember when Visa was Chargex

I got a nice set of steak knives when I got my Sears card. Never used the card though

Let’s not forget the American Express OPTIMA card. This is accepted anywhere Amex is (it even starts with a 3) and, naturally, has the excellent customer service that they are famous for.

Oh, and NO ANNUAL FEE. I still don’t know why regular AMEX cardholders don’t switch and stop paying an annual fee.

Sam’s Club, or at least the one in my town, only takes Discover. I realized this rather loudly one day when I’d been in line for 15 minutes, Visa in hand.

Dr. J (who only wishes Waffle House took plastic)

DrEvil said:
“…but I’ve NEVER seen a store that took Visa but not MasterCard, or vice-versa.”

Don’t know if you would count it as a store but AT&T won’t let you charge a long distance call to a Visa. They will accept MasterCard though.

Gen A.C. McAuliffe
“The general’s nuts.”
unknown 101st AB grunt