For business owners, the choices presented by the various credit card companies seem endless. There are the big names of Visa and MasterCard plus the two other giants in business credit cards, American Express and Discover. And that's not getting into the minutiae of banks and retailers and credit unions – hell, even baseball teams – who co-brand their cards, usually through Visa and MasterCard.

So exactly what is the difference?

To cut to the punch line, the answer is, "Not much, really." But there's more to it than that.

Most credit cards offer the same basic set up. You have a credit limit, a grace period and a variable or set interest rate. You charge purchases on your card, receive a bill and are obligated to pay at least the minimum payment each month. All companies offer rewards ranging from point based systems to cash back offers depending on what type of card you have. Forget to make a payment, go over your credit limit, pay your bill late, etc. and you will be charged fees.

But there are also distinct differences … and those differences could have a big impact on your business.

Visa and MasterCard

The largest and most popular, more retailers around the world take cards from these two payers than any other card combined. In fact, both companies say they are accepted at more than 20 million merchants in over 150 countries around the world.

However, when you have cards issued with the Visa or MasterCard logo on them, they are not the ones who are liable for your purchases. Visa and MasterCard are payment networks, not creditors. The credit cards you hold and the offers you receive actually come from specific banks, credit unions, stores or other financial institutions. These are your issuers and they are the ones who give you the credit and who are responsible if you fail to make your payments.

Visa and MasterCard process the credit card transactions while the specific credit and terms you have for your card are unique to your issuer. This is why you may have a Visa business credit card from your credit union and a MasterCard debit card for your checking account.

American Express

Having the reputation of being more "exclusive" than other credit cards, American Express is still viewed as a company which offers "charge cards" – that is, cards which you can use to charge purchases but which require you to pay them back in full each month. Although it is true that American Express started out as a charge card only company that required annual fees for its use, they now offer many different traditional credit card programs. Some of their cards, such as their Blue from American Express Card, do not charge an annual fee. In the wake of our current financial woes, however, American Express has reined in many of their credit card programs and are returning to their charge card roots and, presumably, to their exclusive status as well.

Originally, American Express was its own payment network, issuing cards to clients who were backed by its own credit and terms. However, now they are lending the American Express name to many issuing banks offering credit cards and even co-brand a card with Costco.

One more thing about American Express: because they charge higher fees to the merchants who accept their card, it is not as widely accepted as a form of payment by merchants and therefore not always as convenient as a Visa or MasterCard.

Discover

Discover, a payment network in its own right through its own Discover Bank, is now branching out by partnering with other issuing banks. Discover was one of the first cards to offer cardholders a cash back bonus based on their purchases which, at the time, was both unique and wildly popular. This helped the card gain a broad customer base though, like American Express, the card is still not as widely accepted as Visa and MasterCard.

So … which one is right for you?

In this current economic climate, credit is harder to come by. Offers simply do not hit your mailbox daily like they did just a few years back. That means you'll want to do business with a company that will partner with you and work to help your small business succeed. So, in the final analysis, choosing a credit card means more than picking a name. It means assessing your needs and evaluating offers, then comparing the costs, savings and benefits of – literally – dozens of cards before making a decision.

American Express, Visa, MasterCard and Discover – What's the Difference?

American Express, Visa, MasterCard and Discover - What's the Difference?