‘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?
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 recent study from earlier in 2022 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).
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".
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).
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.
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.