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COST OF LIVING

Oil, bikes and furniture: The products you’re going to pay a lot more for in Switzerland

It should come as no surprise to anyone by now that a number of products and services have gotten more expensive in Switzerland lately. What are they and what lies ahead, price-wise?

Oil, bikes and furniture: The products you're going to pay a lot more for in Switzerland
Baked goods and dairy products like cheese have become more expensive in Switzerland. Photo: Pixabay

Rising inflation, as well as lingering economic effects of Covid coupled with the war in Ukraine — both of which are disrupting supply chains — have made many consumer goods in Switzerland even more expensive than before.

These articles published in The Local list a number of common purchases and services where prices have risen and are expected to increase even more:

Seven products that are becoming more expensive in Switzerland

EXPLAINED: How inflation is increasing housing costs in Switzerland

How Covid, inflation and the Ukraine invasion has made Switzerland more expensive

This is the situation overall

The calculation of inflation is based on a fictitious, rather than actual, basket of goods, where the fluctuations in the price of electricity and energy have a greater weight than cost of sugar or stamps.

Overall, costs of rent, mortgages, gasoline, heating fuel, natural gas, construction materials, agricultural products, baked and diary goods, coffee and even beer, have gone up.

All these increases have an impact not only on spending habits of individual households, but also on the economy as a whole.

“Inflation can cause prices to spiral. Higher prices mean consumers get less for their money. They then demand higher salaries in order to maintain their standard of living. To finance these wage increases, companies then increase their prices. A vicious circle is thus set up”, according to an analysis by 20 Minutes news platform.

Even though the inflation rate in Switzerland is a relatively low (in comparison to other countries) 2.5 percent, the prices of some goods have soared substantially, 20 Minutes reports: about 75.6 percent for heating oil, 39.2 percent for gas, and 54.8 percent for flights.

This recent Consumer Price Index from the Federal Statistical Office (FSO) gives an idea of how much higher Swiss prices are now in comparison with the same period last year.

FSO

What specific prices have gone up and by how much?

Aside from the ones mentioned above, these are some of the specific products and how much they have increased on a percentage basis:

  • Petrol (25.1 percent) and diesel (28.3) at the pump
  • Second-hand cars (15.6), new vehicles (4.4)
  • Garden / patio furniture (14.1)
  • Indoor furniture (11.8)
  • Fruits (11.3)
  • Lamb meat (8.7) and veal (5.8)
  • Computer keyboards and mouses (8.5)
  • Pasta (8.1)
  • Phone calls from a landline (5.2)
  • Margarine and cooking oil (4.6)
  • Bicycles (3.3)

You can find the current prices of other goods as listed by Swiss news outlet 20 Minutes here.

What can we expect for the rest of the year?

Nobody can predict with a high degree of accuracy what lies ahead cost-wise, as the evolution of the war in Ukraine is uncertain at this point .

However, The Swiss Economic Institute (KOF)  made a prediction based on best and worst possible scenarios.

Under the former one, the price of oil will stabilise at 100 dollars per barrel by the end of the year and there will be no interruption in the supply of natural gas, which means no drastic price increases.

In the latter case, “we risk further disruptions in supply chains and even higher prices for energy and food”.

As far as inflation is concerned,  “it will remain at a high level over the next few months and will weaken again towards the end of the year”, according to KOF, which expects the current rate to fall to 1.9 percent by December 2022, and to 0.7 percent by the end of 2023.

Overall, Switzerland is doing better than other nations

With the current inflation rate of 2.5 percent, Switzerland is doing relatively well — as it usually does during global economic downturns.

By comparison, the inflation rate in the United States now stands at  8.3 percent, the highest level in 40 years.

In France it is 7.5 percent, in Germany to 7.4 percent, and it is even higher in eurozone countries farther afield: 19 percent in Estonia, 14.2 percent in the Czech Republic, and 9.6 percent  in the Netherlands.

Overall, the general inflation rate in the EU is 7.5 percent.

Another piece of good news: some products and services, such as citrus fruits, olive oil and …sewage taxes have become cheaper in Switzerland.

READ MORE: 13 things that are actually ‘cheaper’ in Switzerland
 

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COST OF LIVING

‘Huge differences’: How you can save money on Swiss credit cards

Hardly anyone lives without a credit card these days, but have you ever thought of how much this little piece of plastic costs you each year and if you could save? A new Swiss survey provides the answers.

‘Huge differences’: How you can save money on Swiss credit cards

Most people routinely use their cards without giving any thought to fees and charges involved in each purchase.

This all the more relevant when you pay for goods and services abroad because your bank charges a fee for every transaction made outside of Switzerland  — typically, between 1 and 5 percent, depending on the terms of your contract.

However, a new study by an independent online comparison service Moneyland shows that “there are huge differences in costs and benefits” among various cards.

This finding is based on comparison of 168 Swiss credit and prepaid cards, taking into account “all relevant fees for the first two years of use, as well as Swiss franc to euro exchange rates” in 2022.

The study concluded that “many consumers could save hundreds of francs per year by changing their payment cards”, according to Moneyland CEO Benjamin Manz.

For instance, occasional users could save 560 francs and frequent users could see savings of more than 830 francs in the first two years if they were to switch to cheapest cards, Manz said.

Which card you ultimately choose depends on several factors. For instance:

The cheapest credit cards for travellers

If you frequently travel to foreign countries and spend 5,000 euros (equivalent of about 5,000 francs and 5,200 USD) outside of Switzerland every year, or withdraw 1,000 euros per year at foreign ATMs, your best bet is the Silver Multi-Currency Credit Card from Swissquote. It costs 292.05 francs over the first two years of use.

Next are the Gold Multi-Currency Credit Card from Swissquote (392.05 francs); the Coop Supercard Visa or Mastercard (458.95 francs), the Jumbo and Manor Mastercard credit cards from Viseca (463.55 francs), and the new UBS key4 Mastercard Standard (485.15 francs).

READ MORE: How to save on groceries in Switzerland

If you are an occasional user, meaning you spend 200 francs in Switzerland per month and 1,000 euros per year outside of Switzerland, you will get most bang out of the Poinz Swiss Loyalty Card and Swisscard Cashback credit cards.

The study found that over a two-year use, these cards give you more money than they cost you.

How can this be?

As Moneyland explains it, “the cost of using the Poinz card is -25.10 francs, and that of using the Cashback card is -12.30 francs. Both of these are American Express credit cards issued by Swisscard. The reason why the costs are negative is that the cash back rewards you get are higher than the total costs”.

Next the Coop Supercard (Visa or Mastercard), with total costs of 42.85 francs; and the Jumbo and Manor Mastercard store credit cards issued by Viseca, with total costs of 43.60 francs.

“All of the cheapest credit cards for occasional users are free credit cards in the sense that they do not have annual card fees”.

READ MORE: Six no-gimmick websites that help you save money in Switzerland

What about frequent users?

Moneyland defines ‘frequent’ consumers as those who spend 1,000 francs per month in Switzerland, and 5,000 euros per year in foreign countries. It also considers cash advances — five 200-franc withdrawals in Switzerland and five 200-euro withdrawals from foreign ATMs.

This particular group of people would benefit most from the American Express cards from Poinz Swiss Loyalty with total costs of 289.80 francs, and the Swisscard Cashback cards with total costs of 319.80 francs over the first two years.

Next are the Silver Multi-Currency Credit Card from Swissquote (362.05 francs) and the Coop Supercard Visa or Mastercard (454.75 francs).  

Prepaid cards

These are the cards with a credit limit based on the account holder’s deposit.

If you an “average” user, defined as someone who spends 500 francs per month of purchases from Swiss merchants, 2,250 euros per year of purchases from foreign merchants, and makes three cash withdrawals in Switzerland and eight reloads of your prepaid card balance per year, the cheapest card is the Neon Free Mastercard —which comes with the Neon Free bank account.

It costs 26.60 francs over the first two years.

Migros vs Coop: Which Swiss supermarket has the best bonus point system?

Other cheap cards are the Neon Green Mastercard (136.60 francs), the UBS key4 Mastercard Prepaid (216.40 francs), the Postfinance Mastercard Value (241.80 francs), and the Cornèrcard Energy (282.65 francs).

Using cards from digital banks like Neon “is particularly advantageous for travelling”, the study found.

“The reason is that many of these cards have much lower foreign transaction fees and better exchange rates than credit cards and debit cards from conventional Swiss card issuers and banks”, Manz said.

However, prepaid cards are not as widely accepted as credit cards, especially for hotel bookings and car rentals. “For that reason, taking at least one affordable credit card with you when you travel, in addition to cheap cards from neobanks or other debit cards, is a good idea,” Manz pointed out.

Another tip for travellers using Swiss cards abroad: “Always choose the local currency for card payments, and never Swiss francs…this lets you avoid high currency conversion fees”.

What else should you know about Swiss credit cards?

Another consumer comparison site, Comparis.ch, has also rated commonly used credit cards using its own criteria. You can see the results here.

READ MORE: Seven products that are becoming more expensive in Switzerland

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