Which Credit Card for Stay in the US?

Dear sirs/madames,

Next year, my son will participate in a 5-month language program in the US (San Diego). I came across your website while searching the web for suggestions on how to handle the money side of things and read a lot of your guides. I also saw that you offer personal credit card analyses, so I wanted to ask you some questions:

My son does not currently have a credit card. A credit card is probably the best solution for his stay in the US. He has a private account at the Graubündner Kantonalbank and I think the best option would be for him to apply for a credit card from the GKB. In this case, would it be better to pay the credit card balances by billing or by direct debit?

I also read that there are high fees that can apply when you use cards, and that small amounts are best paid using credit cards and larger amounts are best paid using a debit card. Is it technically possible to use a Swiss debit card in the US?

How are payments normally made in the US? Is cash even used for payments anymore? Or is everything paid by card?

Withdrawing many small amounts at ATMs (like young folks here in Switzerland do) probably doesn’t make sense because of the fees. You website recommends using debit cards for cash withdrawals, so here again, the question is: can Swiss debit cards be used in the US?

I’m not sure if you are the right place to get my questions answered, so please let me know if that’s the case. Otherwise, I would very much appreciate a detailed answer.

Many thanks and kind regards

Hi there,

Maestro cards (or EC cards as they are known colloquially) are not widely accepted in the United States. Mastercard credit cards, on the other hand, are very widely accepted.

The Mastercard credit card offered by the Graubündner Kantonalbank is issued by Viseca. Fees for Viseca cards are generally identical regardless of which bank they are issued for. You can find detailed breakdowns of Viseca card fees in the credit card comparison on moneyland.ch.

Foreign transaction fees and currency exchange costs are the most significant costs of using a credit card during an extended stay abroad. A foreign transaction fee (1.75% in the case of Viseca) is charged by the card issuer when you use the card to pay or withdraw money abroad. Additionally, you pay a markup on the currency exchange rate.

The cards offered by TransferWise and Revolut are a good alternative to Swiss credit cards. These have very favorable currency exchange rates, which makes them a cheaper solution for payments and cash withdrawals abroad. Just note that these are not Swiss issuers. Both Revolut and Transferwise are based in the United Kingdom. They are debit cards which are linked to prepaid accounts, so you have to transfer money to the card account before you can use them. Both of these solutions have Swiss accounts into which you can deposit money to load card accounts. Read our analysis of smartphone banking solutions here.

TransferWise lets you withdraw up to the equivalent of 200 pounds per month at most ATMs without paying any withdrawal fees. It has almost not markup on interbank exchange rates. You can also use TransferWise to transfer money internationally with low currency exchange costs.

It is difficult to get a US credit card without having been resident in the US for at least one year. The reason for this is that credit card issuers require a US credit history for credit approvals, and building a credit history takes time.

Your son may be able to obtain a secured credit card (the line of credit is secured by a deposit), and if he is contemplating moving to the US more long-term, then doing this is recommended. Secured credit cards generally do not offer rewards or benefits like many credit cards do, but using them and making payments on time helps you build a US credit history.

More useful tips:

1) When using Swiss cards to pay in the US, your son should always choose to have payments and withdrawals calculated in US dollars whenever possible, and not in Swiss francs. When you use dynamic currency conversion which lets you pay in Swiss francs, you pay fees for this service on top of your cards foreign transaction fees.

2)  If you already have several credit and debit cards, taking more than one with you when you travel is generally a good idea because if one is not accepted, one of the others may be accepted. For example, you could use a TransferWise card whenever possible, but keep a Visa or Mastercard credit card and/or a debit card on hand for the event that it is not accepted by some merchant or ATM.

Best regards from Moneyguru