February 08, 2022
If you’ve ever been in the market for a credit card, you probably spent some time considering which type of credit card to apply for. Two of the most popular choices are American Express® and Visa®, but what exactly are the similarities and differences between the two, and why might you opt for one over the other?
Let’s take a closer look at both.
A credit card network is a payment infrastructure that facilitates transactions between a credit card issuer and merchants that accept the issuer’s card. There are a lot of moving parts and multiple players involved in how credit card processing works, which you can read about or watch a video about here. Suffice it to say that a credit card network is the conduit over which credit card transactions take place.
There are four major credit card networks in the United States: American Express, Visa, Mastercard®, and Discover®. American Express Card transactions are conducted over American Express’ network, Visa transactions are conducted over Visa’s network, and so on.
You can tell which network your credit card uses by checking the logo on the card. You can also tell by the digits that compose the account number on the card:
One major difference between American Express and Visa is that the former is also a card issuer. What this means is you can apply for an American Express credit card directly from American Express and, if you’re approved, they will issue you a card, not a third party.
Visa, on the other hand, is strictly a credit card network, and you cannot get a credit card directly from Visa. Instead, a third-party financial institution issues you a Visa credit card, and the name of that institution will appear on the card along with the Visa logo. For example, Credit One Bank offers a variety of Visa cards for consumers with varying credit scores and different priorities and interests.
Here’s where it can get a little confusing. While American Express is a card issuer, they also offer co-branded credit cards through third-party financial institutions, such as Credit One Bank. The Credit One Bank American Express® Card is issued through the Bank and transactions are conducted over American Express’ network.
The bottom line is that American Express is both a credit card network and a credit card issuer, whereas Visa is strictly a network.
Regardless of which network your credit card uses, or who issued the card, as a cardholder, you want to know that, when you go to purchase something with it, it will be accepted by the merchant. In this regard, American Express and Visa are nearly neck and neck—when it comes to domestic transactions, anyway.
A 2020 Nilson Report found that:
Domestically, Visa holds a slight acceptance edge over American Express by a margin of only 100,000 merchants. Internationally, however, Visa is more widely accepted by about 26 million merchants.
According to The Balance, as of November 1, 2021:
When it comes to the sheer number of credit cards in circulation around the world, Visa holds a substantial lead over American Express—by over a factor of six. According to Wallet Hub, as of November 11, 2021:
Comparing the credit score requirements to be approved for an American Express card versus a Visa card is a bit tricky because it depends on which American Express and which Visa card you’re talking about. There are a variety of products on different tiers with both networks. Plus, both are issued by multiple card issuers that set their own requirements—particularly Visa, which is only offered by third-party issuers.
Because Visa is offered by so many more card issuers than American Express, there are more types of Visa cards, so it’s typically easier to get approved for a Visa card with a lower credit score than an American Express card. There are even secured credit cards that use the Visa network, which applicants with low credit scores—or no credit scores at all—can typically be approved for.
According to Experian, if you’re applying for an American Express credit card directly from American Express, you’ll typically need “Good” credit, which equates to a FICO® Score of 670 to 739 or a VantageScore® of 661 to 780. But there are also American Express cards issued by third-party institutions that may offer lower credit score approval thresholds.
The Credit One Bank American Express® Card is one such card. Depending on other factors, including an applicant’s annual income, an applicant may be able to qualify for this card with a credit score that falls below the “Good” range.
Comparing the benefits and perks of American Express and Visa is, again, a bit tricky because many of the benefits depend on the precise American Express or Visa card you’ve been issued and who the issuer is.
Visa credit cards are offered in three tiers—Visa Traditional, Visa Signature, and Visa Infinite—each with its own unique perks, plus any additional benefits offered by the credit card issuer. American Express credit card perks also vary by card.
Taking all of this into consideration, here is a broad-strokes comparison of some of the benefits and perks offered—AGAIN, THE ACTUAL BENEFITS WILL DEPEND ON THE SPECIFIC CREDIT CARD YOU’RE ISSUED:
If your credit score falls below the “Good” category, then you may want to apply for a Visa simply because it may be easier to find a card for which you’ll qualify.
If you’re an international traveler who uses credit cards abroad, then you may lean toward a Visa card simply because it's more widely accepted worldwide than American Express.
But, if you plan on using your credit card primarily for domestic purchases, and you have the credit score to qualify for either an American Express or Visa, you really can’t go wrong choosing either. Both are widely accepted by domestic merchants, both offer similar benefits, and both have been trusted credit card networks for many years.
Like most choices in life, it really comes down to choosing the one that best meets your needs and works best for your lifestyle.
After realizing he couldn’t pay back his outrageous film school student loans with rejection notices from Hollywood studios, Sean focused his screenwriting skills on scripting corporate videos. Videos led to marketing communications, which led to articles and, before he knew it, Sean was making a living as a writer. He continues to do so today by leveraging his expertise in credit, financial planning, wealth-building, and living your best life for Credit One Bank.
You swipe the magnetic stripe—or hopefully by now insert the EMV chip—of your card into the credit card terminal on the counter, wait a few seconds, politely decline a printed receipt from the friendly barista working the register, and walk out the door with your latte in hand. You don’t give what just took place a second thought until you receive your credit card statement showing a $6 charge for that caffeinated morning pick-me-up almost a month later.
Credit cards can increase your purchasing power. Just one credit card can give card members a convenient way to buy big-ticket items, cover emergency expenses, and pay for vacations without tapping into their checking or savings accounts. Multiply that power by three, and it might seem excessive. But not to everyone.