FX Rates used by Credit Card Firms in Switzerland

Hi Everyone:

I have noticed that the FX rates used credit card firms seem to be extreme in Switzerland, e.g for a foreign transaction in EUROland, if the midFX rate EURO/CHF is 1.08, they will charge roughly 1.14 (a spread of of 5%!) PLUS a surcharge of either 1.25% or 1.5% on this foreign transaction. This seem to be really over the top!

Hi nvrama123,

Spreads vary between card issuers and change frequently. The interactive credit card comparison accounts for CHF to EUR exchange spreads in cost comparisons.

You may also find this 2018 comparison of currency exchange spreads used by Swiss banks interesting (you can request the tables as PDFs at the foot of the article).

Best regards from Moneyguru

More points you should be aware of when using a credit card for transactions in foreign currencies:

Do not use dynamic currency conversion. If you are given the option of whether you want to pay in the local currency or your card's denominating currency, always choose the local currency. Paying in the card's currency (Swiss francs, for example) can add a hefty dynamic currency conversion fee to the cost of your purchase. You can find more information in the guide to dynamic currency conversion.

Get informed about your card's foreign transaction fee. This is an administrative fee charged by your card issuer in addition to the spread it adds to currency exchange rates when you make transactions in foreign currencies. Most Swiss credit cards have a 2.5% foreign transaction fee, but there are some with lower foreign transaction fees. These costs are accounted for in the credit card comparison.

Consider using a foreign currency credit card. Many Swiss card issuers offer credit cards denominated by euros or US dollars. If you frequently use euros, for example, using a euro-denominated credit card cuts out the foreign transaction fee.