What is Mastercard? Differentiating from VISA and how to open an online account

Mastercard is one of the most searched keywords in the finance and banking sector. So what is Mastercard? This is a question that many people ask. This article from Mytour will help you understand more about Mastercard.

What is Mastercard?

Mastercard is an international payment card, issued mainly by banks in partnership with a global payment company called MasterCard Worldwide, primarily providing credit and debit card services.

Mastercard, the global payment system, empowers cardholders to swiftly and securely make purchases and transactions through an extensive network of banks and retail stores.

Accepted in over 210 countries, Mastercard facilitates and simplifies our daily payment routines, fostering seamless connections worldwide.

There are 3 types of Mastercard available.

Mastercard offers three main types of cards: Debit Card, Credit Card, and Prepaid Card. Each type has its own features and benefits, catering to different financial needs and conditions of users. Here's the breakdown:

Get yourself a card holder to prevent scratches and misplacing your card. You can also consider getting an ATM card sticker to make your card more impressive.

Mastercard Debit Card:

Mastercard Standard Debit Card - this is the most basic type of Mastercard debit card, allowing you to make payments and withdraw cash directly from your bank account.

Key Advantages of Mastercard Debit

• Direct Link to Your Bank Account: When using a debit card, the amount is deducted directly from your bank account.
• No Credit Check Required: Unlike credit cards, Mastercard debit cards do not require a credit check, as you only spend the money available in your account.
• Safe and Secure: Security measures like PIN codes and chip technology help protect your information.

Limitations of Basic Mastercard Debit Cards

• Balance Restrictions: You can only spend what's in your bank account, which can be limiting for larger transactions.
• ATM Withdrawal Fees: Some banks may charge fees for using ATMs outside their network.
• No Rewards Points: Debit cards usually don't offer rewards programs or benefits like credit cards do.

Mastercard Credit: Credit Card

In comparison to debit cards, Mastercard Credit cards offer superior payment versatility, catering to various purposes from shopping to travel and business. Here's detailed information about Mastercard credit cards:

• Credit Limit: Each credit card has a credit limit set by the bank, allowing you to make purchases or pay for services within that limit. For example, with your current income, you'll be approved for a credit limit of 10 million per month. This means even if your card balance is 0, you can still borrow up to 10 million to spend.
• Credit Check: To apply for a credit card, you need to undergo a credit check from the bank.
• Offers and Promotions: Credit cards often come with offers, from reward points, discounts to travel insurance.
• Rewards and Benefits: Many Mastercard credit cards have rewards programs, offering gifts, services, or discounts in exchange for accumulated points.

Alongside numerous advantages, when using a Mastercard credit card, cardholders should also consider interest rates and credit risks. Specifically, after each month, if you overspend and fail to repay the amount, you'll incur interest. And as the debt accumulates, there's a risk of financial impact and affecting your credit score.

Here are the types of cards within the Mastercard Credit lineup

• Mastercard Standard: Basic credit card suitable for everyday transactions.
• Mastercard Gold: Offers travel benefits and insurance, requires better credit conditions to apply.
• Mastercard Platinum: High-end card with exclusive benefits and services.
• Mastercard World: For high-income consumers, providing special offers and services.
• Mastercard World Elite: Ultra-premium card, catering to extremely wealthy consumers.
• Mastercard Business/Corporate: Corporate credit card, featuring expense management and financial reporting capabilities.

Mastercard Prepaid: Prepaid Card

Mastercard Prepaid is a prepaid card solution, offering convenient and flexible payment options, particularly useful for those who do not want or cannot open a regular bank account.

The most basic points about this type of card are: you can only spend the amount loaded onto the card, no debt is incurred because you're using funds based on the balance.

Compared to the above two types of cards, the most prominent feature of Mastercard prepaid cards is:

• People with Poor Credit Scores: In some places, individuals with poor credit scores may not be eligible to open a bank account, so prepaid cards are the preferred option.
• No Credit Check Needed: Because no credit check is required, anyone can open a card, even those with low credit scores.
• Multiple Cards Can Be Opened: You can open multiple primary and supplementary cards for flexible financial management and transfers.
• Payment Account Protection: Prepaid cards are not linked to payment accounts. They only use the funds loaded onto them. This secures your payment account from monthly income such as salary, wages, savings, etc., preventing hackers from infiltrating it.

Advantages of Mastercard Cards

Mastercard brings numerous notable advantages, making it a popular choice in payment methods:

• Widespread Acceptance: Mastercard is accepted in over 210 countries and territories, allowing you to use the card almost anywhere in the world.
• Safety and Security: Advanced encryption technology and other security measures protect your personal and financial information from fraud risks.
• Convenience: Mastercard enables you to make quick and easy purchases and payments without the need for cash.
• Offers and Promotions: Many Mastercard cards come with exclusive offers and promotions, such as shopping discounts, reward points, travel insurance, and various other benefits.
• Expense Management: Mastercard helps you track and manage your expenses effectively through reports and online services.

These advantages make Mastercard a powerful and convenient payment tool, suitable for the diverse needs of modern consumers.

Drawbacks of Mastercard

Although Mastercard offers many benefits and conveniences, there are also some drawbacks that users need to consider:

• Transaction Fees: Some Mastercard cards may apply transaction fees, such as annual fees, ATM withdrawal fees, or foreign currency conversion fees when using the card abroad.
• Acceptance Limitations: Despite being widely accepted, there are places that only accept Visa or other types of cards, limiting the usability of Mastercard.
• Credit Risks: For Mastercard credit cards, overspending can lead to debt and negatively impact your credit score.
• Security: Despite security measures, losing the card or having card information stolen can still pose fraud risks and financial loss.
• Approval Probability: For some types of Mastercard credit cards, high credit score requirements may limit approval chances, especially for those with weak credit histories.

These drawbacks do not necessarily diminish the value of Mastercard, but they are important factors for users to consider when deciding which Mastercard to use or choose.

Distinguishing Between Mastercard and Visa Cards

Many people often confuse Mastercard and Visa cards, although these two international payment cards are products of completely separate companies.

In Asia, Visa cards are widely used, whereas Mastercard is more popular in the United States. In Europe, both types of cards are equally prevalent. To differentiate between them, you can pay attention to specific details on the card. For example, the structure of a Mastercard includes:

Both of these card types offer similar services and benefits, with widespread popularity and acceptance. The main difference may arise from specific offers and promotions, as well as the terms and conditions of the issuing bank.

Using Mastercard

• Registration: To use Mastercard, you need to register through a partner bank.
• Payment: Using Mastercard for payment is straightforward, just insert the card into the card reader and enter the PIN.
• Withdrawal: You can also use Mastercard to withdraw cash at ATMs.

Conclusion

Mastercard is a powerful, convenient, and secure international payment card. It has become an indispensable part of our daily lives.

Frequently Asked Questions