Tag: credit repair

Visa v. Mastercard: How These Financial Tools Are Similar & What Makes Them Different

visa and mastercard difference

You apply for a credit card and the bank sends you one when you’re approved. Whether it’s a Visa, a MasterCard or another type of payment card doesn’t factor into the process. Or does it?

Find out whether you should choose Visa or MasterCard when applying for credit cards and what other information you should know about these companies before selecting a credit card.

The Difference Between Visa and MasterCard

The only real difference that stands between Visa and MasterCard is that your card works on the payment network that the company operates. A Visa card won’t work on MasterCard’s network, and vice versa.

Ultimately, any other differences in cards come from the specific card you have. Not all MasterCard cards are the same, and not all Visa cards are the same.

How Are Visa and MasterCard cards similar?

Visa and MasterCard are both card networks. That means they manage the payment networks on which their cards work, but they don’t actually approve or issue cards to consumers. When you receive a Visa or MasterCard credit card, you get it from a bank such as Chase, WellsFargo or other organizations.

This is in contrast to how cards such as Discover and American Express work. These companies operate payment networks, but they also sometimes issue cards directly.

One benefit of the way Visa and MasterCard work is that they are able to foster much wider acceptance than other credit card companies. Visa’s network is 28 million merchants strong. MasterCard’s network features 30 million merchants. It’s rare that one of the types of cards is not accepted when another is. You’re much more likely to find a merchant that accepts Visa and MasterCard while not accepting Discover or American Express.

Other Similarities Between Visa and MasterCard

Because the specifics of your card depend on what kind of Visa or MasterCard you have, both types of cards offer a variety of options. Here are some of the considerations and options you’ll find whether you choose MasterCard or Visa.

1. Credit scores are required for cards.

The credit card companies don’t decide whether you’re approved for a card or not. It’s the bank sponsoring the card that makes the final call because they’re the one taking the financial risk to extend you credit. Some cards require good to excellent credit scores for approval, while others are approved for individuals with lower credit ratings.

Some banks may even offer credit repair cards for individuals with even lower credit ratings. These tend to have very low credit limits and may come with higher interest rates. Often, cards with the best benefits are approved only for those with good credit ratings.

Find out more about credit scores and what is typically considered a strong score before you apply for any type of credit card.

2. Rewards cards are an option.

Both MasterCard and Visa work with banks that provide rewards credit cards. These can include:

  • Travel rewards, such as points toward discounts on hotel stays, airfare, dining or even Uber rides
  • Store-specific rewards, such as points at retailers like Best Buy or Home Depot
  • Food and beverage rewards, such as free beverages at Starbucks or discounts at favorite restaurant chains
  • Cash back earned on each dollar you spend

The type of rewards you earn with your card depend on the card program, which is offered by the banks, and you can find Visa and MasterCard options for all of the above.

You can find some of the best options for rewards and other credit cards via the Credit.com search tools. That’s true whether you’re looking for MasterCard cards or Visa cards.

3. Fees can range for each card.

Fees are typically set by the banks and not by Visa or MasterCard. What you pay in over-limit, balance transfer, late fees or foreign transaction fees depends on the bank, the credit card offer and the agreement you sign. Don’t rely on the name on the card, and instead, make sure you fully review the offer before you agree to it so you know what fees you’re on the hook for.

4. Apple and Google Pay are options.

Most MasterCard and Visa credit cards work with smart wallet options such as Apple Pay or Google Pay. This is good news for credit card holders who are worried about the security risks that come with swiping a card. Instead, you can link your card to the app on your smartphone and pay via your phone at any payment station that accepts these methods.

5. Credit card holder discount programs.

If you use a business credit card, you may be entitled to save money on various purchases. Visa offers its Visa SavingsEdge program which features discounts of up to 15% or more on qualifying merchants that are automatically refunded to cardholders’ statements. Participating merchants include gas stations, hotels and car rental agencies.

MasterCard offers its similar Easy Savings program with discounts for qualifying purchases from gas stations, hotels and car repair chains. In both cases, cardholders must enroll their cards to realize these savings.

Can You Choose Your Own Payment Network?

In cases where banks work with both MasterCard and Visa, you may be able to contact your credit card company to ask for a specific network. This is true even if you were already issued a card on one of the networks already.

Because the bank determines APR, terms and rewards programs, there is often no reason to get into this level of detail when requesting a card. However, Visa and MasterCard both do back some benefits associated with their cards, including rental car insurance, buyer protections, extended warranties and travel insurance. If one of these benefits is extremely important to you, it may be worth it to change to the card network that offers the best option.

Regardless of whether you choose a Visa or a MasterCard card, apply for a credit card right here on Credit.com. Need to know your credit score before applying? Find out by signing up for a free Credit.com account.

The post Visa v. Mastercard: How These Financial Tools Are Similar & What Makes Them Different appeared first on Credit.com.

Source: credit.com

Why You Should Not Buy a Credit Privacy Number (CPN)

What Is a CPN, or Credit Privacy Number?

If you’re looking to repair your credit, you may have come across websites that advertise a credit privacy number, credit protection number or CPN. These numbers are nine digits like a Social Security number (SSN), and sellers claim that you can use them instead of your SSN. However, these CPNs are often actual SSNs lifted from real people, reportedly children, prison inmates and the deceased – and you can never legally buy a new SSN. In other words, a CPN is no solution to your credit rating problem. Under no circumstances should you try to buy a CPN.

Why a CPN is No Credit Fix

Websites have sprung up all over the internet, offering CPNs to people with bad credit or low credit scores. They advertise that this number can serve as a “get out of jail free” card for your bad credit. In theory, you can use a CPN instead of your SSN on credit applications to hide the poor credit associated with your personal SSN. If you have bad credit but still need a credit card or loan, this can seem like the solution, assuming you can pay anywhere from hundreds to thousands of dollars.

That price might seem worth it for a chance to wipe the slate clean. However, these offers are essentially a big scam. The CPNs you can buy online are not legally assigned credit protection numbers. Instead, they are usually stolen Social Security numbers, taken from children, the deceased or inmates.

Also, using a purchased CPN puts you in some hot water, too. Credit agencies can easily spot discrepancies if you try to use a CPN on an application instead of your SSN. Not only will this fail to help your credit, but it’s also committing fraud which is punishable by jail time.

How to Avoid CPN Scams 

What Is a CPN, or Credit Privacy Number?

If you’re dealing with some bad credit, don’t turn to a CPN. Only scammers sell CPNs, and they in turn may cheat you out of your personal information as well as hundreds or thousands of dollars. Using a purchased CPN can also put you in jail, even if you didn’t know the number was fraudulent. This is why it’s important to be aware of this popular scam.

If you really need a CPN or new SSN, it will be free. The process will go through the Social Security Administration Office, since a new number would be tied to your old SSN. That said, it is very hard to qualify to receive a new number. Having bad credit is never a qualifying reason.

How to Get a Legal CPN

With so many fraudulent websites and companies trying to sell you a way to reset your credit, it’s hard to know how to get a legal CPN. Unfortunately, there’s a lot of misinformation out there. Some experts say that you can speak with an attorney to obtain a legal CPN. The attorney can then contact the Social Security Administration Office on your behalf. However, others maintain that all CPNs are illegal.

Generally, it seems that you cannot get a legal CPN unless you actually need one. These situations include celebrities, government officials and people under witness protection. You can also apply in other specific instances, like if you’re a victim of abuse, stalking or identity theft. A real CPN would be attached to your SSN, so it’s still not an escape from the credit tied to your SSN.

You may also stumble upon offers to obtain an EIN, or Employer Identification Number. The IRS does issue EINs, but only businesses can use them for business costs. This means that you cannot legally obtain an EIN as an individual looking to improve your credit. You also cannot make up a home business, apply for an EIN and use that new number for a credit reset. It is a federal crime to obtain an EIN under false pretenses. In any case, the credit profile for your EIN is still tied to your SSN.

Bottom Line

What Is a CPN, or Credit Privacy Number?

You shouldn’t ever, under any circumstances, try to purchase a CPN. These offers are fraudulent and don’t provide any credit repair or relief. At the very least, buying a CPN wastes money you should put towards repaying your loans in the first place. At worst, you could go to jail for fraud. There are better, more constructive ways to repair your credit. If you’re truly in a situation that calls for a CPN, contact your lawyer for assistance.

Tips on Rebuilding Your Credit 

  • Of course, the best way to legally clean up your credit is to pay back your debts and improve your credit practices. A good place to start is to pay off your credit card debt with the highest interest.
  • Sometimes you’ll just have to wait for your bad history to fall off your record. Generally, negative info stays on your credit report for seven years. If you can’t get a debt collection removed from your credit report, for example, it’ll stay there for seven years. However, as time goes on, the toll it takes on your report lessens.
  • Don’t go it alone. If you have a good income, but you’re just bad at managing your money, a financial advisor can help. With guidance, you can make smarter choices – and even start growing your wealth. To find an advisor, use our free, no-obligation matching tool. It will connect you with up to three advisors in your area.

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The post Why You Should Not Buy a Credit Privacy Number (CPN) appeared first on SmartAsset Blog.

Source: smartasset.com