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Visa or Mastercard—what’s the difference, anyway?

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You apply for a credit card and the bank sends you one when you’re approved. Whether it’s a












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  a Mastercard












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  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












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 , Wells Fargo












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  or other organizations.

This is in contrast to how cards such as Discover












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  and American Express












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  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












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      rides
  • Store-specific rewards, such as points at retailers like Best Buy












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      or Home Depot












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  • Food and beverage rewards, such as free beverages at Starbucks












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      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.

Read: This is one credit-card rewards program you may want to skip

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












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  or Google Pay












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 . 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 cardholder 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.

Also see: Mastercard will allow transgender customers to use their preferred names on debit and credit cards

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.

Read next: The best credit cards for beginners

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.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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