Interest Rates of Swiss Credit Cards Compared

This guide answers the most important questions about credit card loans in Switzerland, and compares the fees charged by different Swiss credit card issuers.

1. When do credit card interest charges apply?

Card issuers charge you interest when you do not pay your credit card bills on time, and when you choose to only repay part of your bill and carry the rest as a negative credit card balance.

2. Which balance do I pay interest on?

That depends on which credit card issuer you use. Some issuers only charge interest on the portion of your balance that you do not repay. Others charge interest on the entire amount shown on your credit card bill.

3. How are credit card interest charges calculated?

Swiss credit cards – like Swiss personal loans – use effective annual interest rates.

You can use the effective vs. nominal interest rate calculator to convert effective interest rates to nominal interest rates.

4. Which time period are interest charges based on?

Some Swiss credit card issuers only charge interest from the date on which the credit card bill was issued. But others calculate interest charges starting from the dates on which each transaction. In the latter case, if you do not pay your credit card bill in full, you pay interest right retroactively, starting from the day on which you used your credit card to pay.

5. How high can credit card interest rates in Switzerland be?

The Swiss Consumer Credit Act places limits the annual interest rates of personal credit cards can be to a maximum legal effective interest rate set by the Federal Council.

Current maximum interest rates do not apply to credit card agreements that were created before the limit was changed. Depending on how long you have had your credit card, it is possible for the interest rate to be higher or lower than the current maximum legal rate.

6. What are the current interest rates of Swiss credit cards?

The annual interest rates charged for negative balances carried over to another month vary between Swiss credit card issuers.

Swiss credit cards: Interest rates and minimum monthly payments compared

Interest and card fees are charged on top of the minimum monthly payment.

Good to know: Current interest rates are shown on the information pages of individual cards in the interactive credit card comparison on moneyland.ch.

7. Are there other costs in addition to interest charges?

From the time that your credit card bill is issued, you have a grace period during which you have to pay at least the minimum monthly payment, plus possible interest and card fees. The grace period varies between Swiss credit card issuers, but is typically either 20 or 25 days.

If you do not pay at least the minimum monthly payment on time, then you may be charged penalty fees in addition to penalty interest. The penalty fees vary between card issuers. Penalty interest rates for credit card bills that are not paid on time are typically identical to the interest rates for carrying negative balances.

8. How high are the late-payment penalty fees of Swiss credit cards?

Each Swiss credit card issuer has its own penalty fees for late payments of credit card bills.

Swiss credit cards: Penalty fees for late payments

Good to know: You can find the current late penalty fees on the information pages of cards in the interactive credit card comparison on moneyland.ch.

Tip: If you are charged a penalty fee, it can be worth contacting your card issuer’s customer service. In the best case, they may waive the fee if you have paid your bill in the meantime and you explain why you were unable to pay it on time.

9. How can I avoid interest charges?

Prepaid cards do not generate interest charges because you can only spend money that you have loaded onto the card. Debit cards too do not normally generate interest charges because most banks only let you spend the money in your private account (though overdraft interest charges are possible in some cases).

But even if you prefer using credit cards, you can still avoid having to pay interest. Credit card issuers do not charge you interest as long as you pay your credit card bills in full and on time.

However, it is easy enough to forget to pay a bill. There are several ways to avoid being charged interest for overlooked credit card bills:

• Set up a direct debit order: By giving your card issuer permission to draw the amount needed for your bill from your bank account, you ensure that your credit card bills are automatically paid in full, as long as the needed money is available in your bank account.
• Transfer money to your credit card account before spending: Swiss card issuers typically allow you to transfer money to your card account in advance to create a positive balance. You can then use your credit card like a prepaid card by only spending as much as your positive balance allows for.

If you have difficult paying your credit card bills in full and on time, you should consider terminating your credit card agreements and using only debit cards or prepaid cards.

10. Personal loan or credit card?

From a financial point of view, it is always best never to use either personal loans or credit card loans. If you do need a loan, personal loans are often somewhat cheaper than credit card loans. Personal loans must be repaid in monthly installments. Credit card loans, on the other hand, can be carried over long periods of time without having to be repaid in full, which can generate very high costs.

You can find the current interest rates in the interactive personal loan comparison on moneyland.ch.

More on this topic:
Compare Swiss credit cards now
Overdraft interest rates for Swiss bank accounts explained
Debit cards from Swiss banks overview