What is a Major Credit Card?

Posted by CreditCardGuru

Q: I’ve been told that it’s important to have “major” cards to achieve a good credit score. The question is, what’s considered a major credit card?

A: Great question. When it comes to your creditworthiness, not all of your cards will be considered equal. There are two types by definition:

  • Major Credit Cards: In the United States, this consists of cards which operate over the payment networks Visa, MasterCard, American Express, and Discover (in foreign countries, the last two might not always be counted since they may not be accepted in a particular country).
    major credit cards
  • Store Credit Card: A card which is branded through a department store, gas station, or other retailer. These can only be used at the affiliated store because they do not operate over a major payment network. Beyond their limited utility, store credit cards typically charge much higher interest rates (usually north of 25%).

So when people talk about “major” they’re referring to Visa, MasterCard, Discover, and American Express. For credit building purposes, it’s recommended that you at least two major credit cards.

Which is the best major credit card?

When it comes to your credit score, there’s absolutely zero difference between MasterCard vs. Visa vs. Discover vs. American Express. Why? Because that label won’t even show up on your credit report! Instead you will see the name of the issuing bank, like Citi, Chase or Bank of America.

cards on reportFor example pictured at the right, you see a Chase Visa and Citi MasterCard account listed on my credit report. But all you see are the names of the issuing bank, not the type of cards they are.

The only exception to this rule is when the issuing bank and payment network are the same company.

Visa and MasterCard do not issue cards (they only operate as networks) so that means you will never see them listed on a credit report. However American Express and Discover do directly issue most of their cards, so you will see their name listed if you have a card issued by them.

Either way, all four companies are considered to be major credit cards. For scoring purposes, they all receive equal weight. One isn’t considered “best” or better over another in terms of building credit.

Why not a store card?

It’s not that you can’t get them. It’s just that you don’t want to rely too heavily on them for credit building.

Unlike the average major credit card, a store card is usually quite easy to get approved for. The requirements are much more relaxed and the credit scoring models take this into account.

If a mortgage broker was evaluating your loan application and looking at your credit report, I don’t think he would be too impressed if all you had on there were store cards (versus credit cards from respected major banks like Chase, American Express, etc).

The lesson? If the rewards and benefits are decent and justify having an account with them there is nothing wrong with having one or two retail store cards. But it’s also advised to have some major credit card accounts, as well as installment credit (like bank loans, car loans, etc.) as well to optimize your credit over time.

What should you start with?

It’s a catch-22… major card companies are the best to have, but also harder to get. So how do you get one if you’re just starting out?

A beginner with little to no credit history probably won’t be approved for a mid-tier or high-end card. However, you should have a good shot at qualifying for these cards for fair credit history.

If you already have an established credit history but you’ve dropped the ball a few times (such as having multiple charge-offs or a bankruptcy) then you may have to start out with a credit card that is secured.

Written or last edited on August 25, 2014

Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

3 comments... read them below or add your own

  1. Trail February 18, 2015 at 3:34PM

    What would a capital secured one master card be considered?

  2. Latoya November 29, 2014 at 8:32PM

    If I have a checking and saving account with a visa logo. Now would that consider a major credit card as well? Even if it say debit?

  3. Alexis February 9, 2013 at 1:17PM

    Thank you for explaining this topic very well. I wasn’t quite clear on what a major card included until reading this.

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