When you're evaluating the benefits of one credit card over another, you have a lot of different factors to consider, including fees, rewards, and interest rates. But does the type of credit card you choose matter at all? Is there any real difference between a Visa and a Discover card with the exact same terms?

There are four major credit card networks in the US: Visa, Mastercard, Discover, and American Express. These companies offer a network of infrastructure that allows merchants to swipe your card and then collect the money from your card issuer. They also set the fees that the merchant must pay to use the network – that's right, every time you swipe your card, the merchant must pay for the privilege of allowing you to do so.


Network Fees

The fees that your merchant pays, also known as interchange fees, are not static; Visa and Mastercard adjust their rates twice a year. Different types of businesses also pay different rates, and they may have different fees for different tiers of credit cards and debit cards. For instance, a Visa debit card transaction at a grocery store may have a smaller interchange fee associated with it than a restaurant even if the transactions themselves cost the same amount.

Online shopping is usually more expensive for the retailer because swiping a card is typically cheaper than typing in your card number on a website.

The logos of the four major credit card networks in the United States Of the four major credit card networks in the US, Visa usually has the lowest processing fees. American Express often has higher fees.


NetworkAverage Credit Card Processing Fee
Mastercard1.55% - 2.6%
Visa1.43% - 2.4%
Discover1.56% - 2.3%
American Express2.5% - 3.5%

These are on top of any additional fees that the credit card networks may charge such as charge-back fees, terminal rental fees, and IRS reporting fees. These fees are paid by the merchants, but they also affect you as a consumer. American Express almost always has higher fees than Visa, Mastercard and Discover, which is why you're more likely to encounter a merchant that won't accept it. If you're in the market for a new credit card, you may want to make sure you have a Visa or Mastercard as a backup instead of only having Discover or American Express, as Visa and Mastercard were accepted at 10.7 million locations in the US at the end of 2019, compared to 10.6 million for Discover or AMEX. Costco is one merchant that only accepts Visa, and those without a Visa card may be out of luck.

Issuers vs. Networks

Pull out the credit card in your wallet and take a look at it. Chances are, if it's a Visa or Mastercard, you'll see their logo as well as the logo of the bank that issued it. That's because Visa and Mastercard are card networks, but do not actually issue the cards themselves. They merely facilitate payments between the merchant and the bank that issued the card.

On the other hand, Discover and American Express both process transactions and issue cards. As with the fees, this may not have a big impact on you as the cardholder. However, it does mean that you can't take advantage of having a card linked to your bank. if you are interested in building a deeper relationship with your bank to get better interest rates or have everything consolidated into one app, Discover and American Express may not be the strongest options.

When picking your next credit card, consider the array of cards that you already have, and ask yourself if you are interested in diversifying the different networks that you may be able to use if one retailer does not accept a certain type of card. However, as most of the practical differences are behind the scenes and don't affect you, your considerations should be given to the different types of rewards you can get through the card and the fees you will pay before you worry about which card network you might want to use.

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As the years go by, you'll likely need to make some large purchases here and there. Plan for these major life purchases by identifying them and saving early.

While it's possible to be frugal with many aspects of your lifestyle, there are certain events and possessions that will require you to spend a substantial amount of money. Thus, a wise course of action is to begin saving well ahead of time while thinking about your goals for the future. This way, you'll be able to maintain a stable financial state even when faced with those large expenses. The following are a few major life purchases that you should plan for.

A Wedding

Marriage is a joyous occasion that many people look forward to. However, a wedding can be quite expensive, often costing thousands of dollars. Your family and your future spouse's family will often contribute to covering this, but you should still prepare to spend a good deal of your own money on the ceremony. If you're in a serious relationship and are considering marriage, you should plan where the funds for the wedding will come from and take the necessary actions to accumulate them. It's also crucial to discuss financial matters with your partner, since your property will merge once you get married.

A New Car

Automobiles remain one of the top modes of transportation. As a result, you may want to purchase a new car at some point in your life. Although you may be fine with an old or used vehicle at present, you may one day be motivated by a desire to acquire something nice for yourself or by the practical needs that arise as you raise children. Whatever the case, obtaining a new car is a major life purchase that you should plan for.

In addition to setting aside funds to eventually put towards a vehicle, you should also aim to build you credit score. This is because your credit score will determine your available car loan options. The higher your credit score, the more you may be able to lower your interest rates on your car.

A House

Owning your own residential property is a worthy objective that you may hope to make a reality one day. Ideally, you should save about 20 percent of the total cost of a house before you buy it. This will allow you to make a larger down payment and thereafter face less interest on your mortgage.

As with acquiring a car, the mortgage options that you'll have can change based on how strong your credit score is. You'll want to increase your score as much as possible in the years leading up to buying a house so that you can get more favorable interest rates. In addition to contemplating down payments and mortgages, you must also remember that you'll need to deal with property taxes, insurance, maintenance and repair fees, and sometimes homeowners' association charges.

It's also necessary to hire a real estate agent to help you with the buying process. There are different types of real estate professionals. You should know how to distinguish between buyer's agents and seller's agents so that you can obtain favorable prices on homes as well.

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When you are newly hitched and learning how to combine your essential legal and financial information as well as your accounts, it can be confusing.

Many people live together before getting married and have begun the process of combining accounts and sharing responsibilities. However, some people wait to do this only after marriage, and others wait until they're married to live together. Whichever path you've chosen, it's still crucial to know a few tips to manage money together as newlyweds to determine where you should begin and how you can remain on the same page.

Discussing Money Motivations

As we begin to share money with our significant other, we soon find out what one person may rank as a priority regarding money and the other may not. As such, sitting down and discussing money motivations is important. Two people who cannot agree on how to handle money may cause serious issues. This should include:

  • How to deal with money following payday. Is a percentage put into savings? Is that the day to splurge on dinner, drinks, and more?
  • The frequency and size of payments made to debts. Some people like to pay minimums, whereas others pay in full or make double payments.
  • What do you each consider money well spent? Is it a new 70" 4K television? Is it an investment? Is it paying as much debt off as possible?
  • How do you go about consulting each other before making purchases over a certain amount?

Establishing Financial Goals

After you evaluate the motivations behind your money and how it should be spent, you'll need to spend time together hashing out financial goals. As newlyweds, there are certain things on your list that you're going to want to save for. How do you go about that? How much of each paycheck will you dedicate to a particular fund?

Some things in the future worth making a financial plan for include savings and paying down debts. This is the time to be honest about your current financial standing. If you're looking to buy a home, you'll want to assemble a first-time homeowner financial checklist to begin to develop topics of conversation. Some of the things to consider setting goals for are:

  • Student loans
  • Car loans
  • Future children
  • A house
  • Medical bills
  • Delinquencies on credit reports
  • Vacation and rainy-day funds
  • Emergency funds

Budgeting Together

The more honest and open you can be with each other about the money you have and now the debts you share, the better. Implementing plans for the best ways to have the things that you both desire while still taking care of existing demands is important. These can be uncomfortable things to talk about; however, these conversations are necessary.

Following these tips to manage money together as newlyweds will allow you to have a starting point for conversations that can be tough to start. The sooner you and your partner get on the same page with finances and the responsibilities that come with them, the easier the transition will be and the sooner you'll find success.

It's the dream: money you can count on to keep rolling in, even while you sleep.

Passive income isn't entirely passive, of course. You'll put in work up-front to get the profits rolling, so don't relax in your recliner just yet. But with so many potential sources of passive income available to you, picking one or several will mean that the day you can finally kick back will draw steadily closer.

Rental Properties

Real estate is a tried-and-true wealth builder for a simple reason: people will always need somewhere to live. Research the market in a growing community until you know a good deal when you see it. You can maximize rent by fixing up a deteriorating property or upgrading a mediocre one. The key is to hire a property manager to do all the day-to-day landlord duties for you—and you'll need a good one. Smart investors put their profits in another property and repeat the process until they have a diverse portfolio.

A YouTube Channel

You can start a blog if you're more comfortable hiding behind a computer, but consumers are more likely to prefer video content. Post a series of “how-to" videos to answer questions about whatever you're an expert in.

You can put up any content you want, but if you don't want to commit to regularly updating it, focus on “evergreen" topics that will draw clicks for eternity. Ads will create your income, especially if your channel grows in popularity. Better yet, sign up for affiliate marketing. If you recommend a product and provide a link to buy it, you'll get a small percentage of those transactions.

Auto Advertising

If you don't mind vinyl-wrapping your car with an ad for a company, you can get cash just driving around and running your errands. Make sure you contact a reputable company that doesn't ask for any money from you; if they're the real deal, they'll evaluate your car, your driving habits, your area, and more. Bonus: the brighter the ad, the easier it'll be to find your vehicle in the parking lot.

Digital Products

What's something that people will pay for but doesn't require shipping on your part? Finding that item is what can supplement your income indefinitely. Write an e-book, charge for your cross-stitching patterns, design prints that people can digitally download, invent an app, record a “masterclass," or whatever else you want. Every time someone new discovers it, the cash register rings. With a little more effort, this is a potential source of passive income for you that can continue to grow. Once you build up a customer base, they might want more products. The good part is that it's up to you whether you wish to give it to them.