Using credit cards to pay online

What should I be aware of before using credit cards to make online payments? I heard that extra fees might apply. Any experience with this?

Hi there,

There are many factors which need to be considered.

First of all, there are online stores which add a surcharge when you use a credit card to pay for purchases. In this case, you should consider using another means of payment. You can read more about markups for credit card payments here.

Secondly, there are a number of costs to look out for when you make foreign currency transactions. The same fees apply when you shop at a foreign online merchant that apply when you use your credit card when traveling outside of Switzerland. The first cost is the foreign transaction fee (find more information on foreign transaction fees here). The second cost is the markup on the currency exchange rate. For this reason, you should consider alternative payment methods for settling larger payments in a foreign currency.

You should also be careful when making CHF payments on foreign websites. Most of these are recognizable by the top level domain (for example, amazon.de is a German merchant). A number of foreign merchants also operate websites with the ".ch" domain, which can lead you to believe that you are dealing with a Swiss company. So it is worth checking into the company's physical location before making a big transaction.

Many Swiss credit cards (such as those issued by Viseca) charge foreign transaction fees for all payments to foreign merchants in Swiss francs.

Other credit cards - like the Migros Cumulus credit card from Cembra Money Bank - do not charge you a foreign transaction fee when you use them to settle payments to foreign online merchants even though they charge a fee when you use your card abroad. However, settling foreign currency payments in Swiss francs with these cards can still be costly because they often use very poor exchange rates for dynamic currency conversion (DCC). You can learn more about DCC here.

Best regards from Moneyguru