why isn't my credit card accepted everywhereAlthough most credit card issuers claim that their cards can be used everywhere, that isn’t the case, as anyone who’s ever owned a Discover or American Express credit card can tell you. It can be mildly annoying to downright detrimental to discover you can’t use your credit card when you need to make a payment. If you’ve ever found yourself wondering, “Why isn’t my credit card accepted everywhere?” here are some answers.

All credit card companies do not operate the same

First, it’s important to understand the fundamental difference between the two major credit card networks. Discover and American Express issue credit cards directly to customers and process payments themselves. This method of operation is known as a closed-loop network. Visa and MasterCard, on the other hand, are open-loop networks which involves other parties to handle certain things like issuing credit cards, setting fees or determining interest rates charged to users. That’s why you’ll see Visa-branded credit cards from competing banks like Chase and Citibank, as well as credit cards with both Visa and MasterCard logos offered through the same bank. Visa and MasterCard make the majority of their money through their relationships with the banks and other financial institutions they partner with, while Discover and American Express profit when they process transactions and charge annual fees to their customers.

So, why isn’t my credit card accepted everywhere?

It all boils down to the fact that merchants have to choose to accept Discover and American Express, while Visa and MasterCard are usually included in any merchant package, and doing so could mean much higher processing fees for them. Although the prices fluctuate, the average processing fee per transaction with Visa and MasterCard currently ranges from 1.10% to 2.95% — whereas American Express fees are much higher. The same goes for Discover (though it does not publicly publish its fees). When you swipe your credit card at your local convenience store, at the very least there are three parties involved: your card issuer, the payment network and the retailer’s bank (known as the acquirer). Sometimes there are more parties involved, and things can get pretty complicated on the retailer’s end.

Since American Express and Discover generally charge higher fees to merchants than their counterparts and it’s up to merchants to accept them or not, many opt not to bother. While these fees might not be a big deal to larger businesses who bring in enough revenue to cover those added costs, for small businesses the higher fees (or the added hassle of adding them to their payment network) may not be worth it. Some businesses might also try to offset the cost of credit card processing fees by setting a minimum purchase amount for credit card use (which is completely legal for them to do, according to the Dodd-Frank Wall Street Reform and Consumer Protection Act). This runs the risk of turning away customers, though, so choosing to simply not accept credit cards which charge higher transaction fees could be the most sensible decision for the business.

Does this apply when I travel abroad, too?

You will certainly run into issues with credit cards from certain issuers not being accepted while abroad, though you can get a general idea of how easy it’ll be to use your cards by checking with your issuer (for example, Discover has a map on its site that shows which countries around the world accept it). That said, even if you’re traveling to a country where your card is accepted, undoubtedly not all merchants will take it. Additionally, it’s worth noting that you could also run into problems if you don’t have the right type of credit card. While Visa and MasterCard should get you through most countries, if your credit card does not have an EMV chip, you may be in trouble some places. For example, new ticket machines at train stations in France can’t read magnetic stripes at all. Fortunately, you can request a new credit card with a chip if your old magnetic stripe card hasn’t already been replaced, and you can also apply for one of our top-rated travel credit cards, which all feature EMV chip security. It’s also wise to check with your issuer to see if you can set up a PIN to use with your chip card if you’re going abroad, since some merchants won’t accept your credit card without one.

The key is to have a backup plan

Just because some merchants might not accept them is no reason not to get an American Express or Discover credit card, especially considering how many great perks many of their cards offer. Depending on where you live, you might be surprised at how little you run into trouble when it comes to using your credit card at most places. One of our editors recently opened an American Express credit card and wrote about her experience, noting that the only times she hasn’t been able to use it so far were at small, local retailers. Those living in more rural areas may have more difficulty than someone living in a more urban environment. If you aren’t positive whether your credit card will be accepted when you’re heading out, the best option is to make sure you have alternatives in your wallet, whether that’s cash or a credit or debit card that bears the MasterCard or Visa logo. This will help you ensure that no matter what, you can always pay.

Want to know more about the different credit cards out there? Our credit card reviews go in-depth to help you decide which is the perfect fit for your needs.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.