Long overdue disruption has hit the Swiss credit card market with the introduction of new no-annual-fee credit cards and multiple-currency cards. Competition from foreign card issuers is also on the rise. Comparing credit cards regularly has never been as worth the effort as it is now.
Major cost differences between credit cards
The unbiased online comparison service moneyland.ch analyzed the fees, benefits and total costs of 155 payment cards.
The verdict: Occasional card users can save up to 540 francs in the first 2 years after switching from the most expensive credit card (excluding platinum cards) to the most affordable credit card. Heavy card users can save up to 935 francs in the first 2 years (up to 1900 francs if platinum cards are accounted for).
Credit card fees for mobile payments
Numerous mobile wallets can be used in Switzerland, including Apply Pay, Google Pay, Samsung Pay, Fitbit Pay, Swatch Pay and Garmin Pay. But many consumers are not aware of the fact that the fees applicable to the linked credit card also apply when they use their smartphones or smartwatches to pay.
Apple and other mobile wallet service providers charge fees to credit card issuers rather than to credit card users. Payments within Switzerland can generally be made via mobile wallets at no additional charge, but foreign transaction fees generally apply when you pay outside of Switzerland.
The most affordable Swiss credit card in 2019
The most favorable Swiss credit card for occasional users in 2019 is the Cashback American Express credit card from Swisscard, thanks to its high cash back. The cost is -11.60 francs in the first 2 years, meaning users actually profit by using this card. It is followed by the Coop Supercard Mastercard/Visa (total costs over the first 2 years are 48.90 francs). The Migros Cumulus Mastercard comes next, with total costs of 55.05 francs. The Cashback Visa/Mastercard credit cards from Swisscard follow, at 80.65 francs in total costs over the first 2 years. None of these cards have annual fees.
The Cashback American Express from Swisscard is also the most favorable option for frequent card users, with total costs of 333.55 francs over the first 2 years for this user profile. It is followed by: the Swissquote Silver multi-currency credit card with total costs of 347.10 francs; the Swissquote Gold multi-currency credit card with total costs of 447.10 francs; and the TCS Travel Mastercard Gold from Cembra Moneybank with total costs of 458.65 francs over the first 2 years for the frequent user profile.
Important: “The costs of credit cards vary widely depending on how you use credit cards. Performing a custom credit card comparison is recommended,” says moneyland.ch analyst Sabrina Widmer.
New cards are disrupting the market
Recent months have seen a number of new payment cards launched in Switzerland. Coop’s move from Swisscard to TopCard (UBS) as its partner for the Coop Supercard credit card resulted in both Swisscard and TopCard launching new credit cards. We also saw Swissquote launch its multiple-currency credit cards which let users pay in 12 currencies without foreign transaction fees.
Cards from Revolut and TransferWise are also gaining popularity among Swiss consumers, states moneyland.ch CEO Benjamin Manz. These stand out on account of their favorable currency exchange rates and low foreign transaction fees, and can make useful supplementary payment cards for international purchases. Taking a Swiss credit or debit card with you as a backup when you travel is recommended.
Possible disadvantages over Swiss cards are the absence of Swiss bank depositor protection (this is significant because these cards are linked to prepaid accounts) and the absence of benefits like rewards or complimentary insurance coverage.
Compare benefits
With the exception of basic credit cards, Swiss credit cards typically include complimentary benefits. “It can be worth accounting for complimentary benefits in addition to costs when determining which credit card is most favorable,” recommends analyst Sabrina Widmer. Possible complimentary benefits include travel insurance, rental car collision damage waivers, access to airport lounges, reward points, airline miles, cash back and many more. You can sort credit cards by their benefits with the credit card comparison.
How should you use credit cards when traveling?
Traveling exposes you to the biggest potential cost pitfalls. Never use Swiss credit cards to make cash withdrawals while traveling, as doing this generates high cash advance fees. Use a debit card for cash withdrawals instead. Also avoid using dynamic currency conversion when charging purchases in foreign currencies to your credit card. Always choose to pay in the local currency and not in Swiss francs.
Charging large payments to a debit card while traveling abroad is generally more affordable than charging them to a credit card. If you plan to use a credit card to pay when you travel, make sure to choose a credit card which has a low foreign transaction fee and a favorable currency exchange rate.
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