You often hear the term “major credit cards,” whether it’s someone excited about getting approved for one or a business displaying an “all major credit cards accepted” sign. Given such references, it is apparent that having a major card is a good thing. However, there seems to be a lot of confusion about what exactly a major card is and how it compares to other types of credit cards. In addition, many consumers don’t know the benefits of having a major card and/or how to obtain one.
To address a lack of consumer awareness, this article will clarify the benefits of major credit cards, empowering you to take full advantage of their perks.
What is a major credit card?
A major credit card typically refers to a card from one of the four main payment networks: Visa, Mastercard, American Express, and Discover. These cards are widely accepted by merchants both domestically and internationally, and often come with unique credit card perks exclusive to each network.
Lynnette Khalfani-Cox, author of the New York Times bestseller “Zero Debt: The Ultimate Guide to Financial Freedom,” says “It’s important to note that while Visa and Mastercard provide the payment network, the actual cards are issued by banks like Chase, Citi, or Capital One, which set the terms, interest rates, rewards, and so on. American Express and Discover are unique in that they serve as both the payment network and the issuer for their cards.”
The 10 largest card issuers, including the banks mentioned above, account for more than 82.5% of all card spending according to the Nilson Report. However, if you have a card from a smaller issuer (such as a small bank or credit union), it is still considered a major card as long as it has a Visa, Mastercard, American Express, or Discover logo. In other words, major cards are not necessarily always issued by major banks.
➤ SEE MORE:Visa vs. Mastercard: Which is better?
Is a prepaid or retail card a major credit card?
One of the best ways to best understand how major cards work is to compare them with other types of cards. In particular, there are distinct differences in comparison to department store or retail cards and prepaid debit cards.
Khalfani-Cox explains that prepaid cards are simply stored value cards — like gift cards with broader acceptance — where you load your own money upfront. “Think of major credit cards like having a trusted friend who temporarily covers your purchases and bills you later, while prepaid and secured cards are more like using your own money that you’ve set aside in advance,” she says.
Here are a few of the key differences:
- Major credit cards extend actual credit. They’re lending you money that you promise to repay, often with interest if you don’t pay in full each month.
- Major cards are issued by financial institutions whose terms are based on your credit score and income.
- Store cards will not have the symbol of one of the four major credit card companies or networks as referenced above.
Is a secured credit card a major credit card?
Getting approved for a major card is a milestone for millions of consumers who are trying to build or rebuild their credit. One savvy way to build credit is by using a secured credit card. However, many consumers seem confused about whether secured cards, which require you to pay a refundable security deposit after your account is open, are major cards.
So, let’s dispel some secured card myths.
- Most secured credit cards are issued by one of the four main payment networks, making them major credit cards.
- A secured card can have a large line of credit and function just like any other credit card.
- Your security deposit typically becomes your credit limit (and is usually a dollar-for-dollar match).
- You can have a low credit score and still apply for a secured card. In other words, there’s not really a minimum credit score required to get approved.
Khalfani-Cox sums things up well by explaining that secured cards are a bit of a hybrid, functioning as a “training wheels for building credit.”
Similarly, sub-prime credit cards are marketed to consumers with bad or poor credit but are still considered major cards. These cards, however, don’t require a security deposit. One example is the card_name – all Capital One credit cards are considered major cards.
➤ SEE MORE:Why aren’t all credit cards accepted everywhere?
Final thoughts
The term “major credit card” refers specifically to cards operating on the Visa, Mastercard, American Express, or Discover networks, ensuring broad acceptance. As we’ve explored, these differ significantly from prepaid and retail cards, while secured and even sub-prime cards can indeed fall under the “major” umbrella. Understanding what constitutes a major credit card and how it functions is the first step in leveraging its potential benefits, whether you’re building credit or simply seeking a widely accepted payment method. I hope this article has clarified these distinctions and empowered you to navigate the world of credit cards with greater confidence.
