Why Swiss Bank Credit Cards Are Often Not a Good Option

Credit cards are ubiquitous today. Most households receive their credit cards as part of a banking package with one of the major Swiss banks. However, the costs should not be underestimated; often you pay CHF 100 or even 200 per year for them. Fortunately, the same services are also available for free. All you have to do is look beyond the boundaries of your bank. All credit cards presented here can be linked to any Swiss bank account for automatic debiting via LSV or eBill. So, switching does not compromise much on convenience.

Mastercard is Not Equal to Mastercard - the Difference Between Debit and Credit Cards

In Switzerland, debit cards, also known as EC cards, were traditionally issued as Maestro or V-Pay cards. With these, you could pay in stores and withdraw money from ATMs. However, online payments were never possible, and acceptance abroad was only limited.

Today, debit cards are only issued as Mastercard and Visa. This allows you to use them seamlessly online and abroad. At first glance, today’s debit cards seem identical to credit cards. So, what’s the difference? Debit cards are directly linked to your bank account. If you buy a burger for CHF 17, the full amount is immediately debited from your bank account. If you don’t have enough money in the account, the transaction fails.

Credit cards, on the other hand, provide you with a credit limit. This is usually a few thousand Francs. Suppose you receive your new credit card with a credit limit of CHF 3000. Now you want to buy the burger for CHF 17 with it. The money is not debited directly from your bank account. Instead, you owe the credit card issuer CHF 17. And your available credit limit decreases from CHF 3000 to 2983.

At the end of each month, you will then receive a bill for the amount you have spent on your credit card throughout the month. It is important to use credit cards responsibly. Only spend as much money as you have in your account. Otherwise, you will accumulate debt with the bank, accruing high interest rates of between 10% and 20% annually.

Why Everyone Needs a Credit Card

Now you may wonder why you need a credit card if you can already pay online and abroad with your debit card. After all, you want to be responsible and not incur debt. But that’s only a small part of the story. Credit cards offer various other benefits that make this risk worthwhile. Here is a list of reasons why you need a credit card:

Bonus Programs

Practically all credit cards offer bonus programs that reward you for your spending. Typically, this bonus is worth between 0.2% and 1% of your spending. So not much, but if you spend CHF 20,000 per year, that’s at least CHF 200 you save.

Security

As already explained, transactions from your credit card are not debited directly to your bank account. Suppose your card falls into the wrong hands; money cannot be directly stolen from your bank account. You then have until the next payment to report these transactions to the card issuer as fraudulent, without your own money ever being threatened.

Car Rentals and Hotel Reservations

When traveling abroad, you often have to leave a deposit for car rentals and hotel stays. If you do this with your debit card, the money is blocked directly in your bank account. Suppose you have to leave a CHF 1000 deposit for a rental car, this money will be debited directly from your bank account. And sometimes it can take weeks before it is made available again. However, if you use a credit card for the deposit, your limit is used, and you never have to spend your own money on it. Especially in the US, debit cards may not be accepted when booking a rental car. Thus, you are forced to use a credit card.

Cembra Certo Card - The Best Credit Card for Most People

The best credit card for most Swiss people in 2024 is the Cembra Certo Mastercard. It competes with the Cumulus Credit Card from Migros Bank.

• No annual fee, including additional card
• 1% cash back at three shops of your choice. Including Migros, Coop, SBB, and Digitec
• Elsewhere, 0.33% cash back

The bonus program is particularly attractive because you can choose the three shops according to your shopping habits yourself. The cashback is automatically credited on the card statement.

The smartphone app is modern and user-friendly. Mobile payment options like Apple Pay and Samsung Pay are supported. Additionally, the card comes with a simple insurance package that includes best price guarantee and accident coverage abroad.

However, the Certo Card is not recommended for intensive use abroad. There is a fee of at least 1.5% for purchases abroad and at least CHF 10 for cash withdrawals.

Order your card here: https://certo-card.ch/certo/de/

Migros Cumulus Credit Card - No Foreign Transaction Fees

This is the reissue of the long-standing popular Cumulus Credit Card, now issued directly by Migros Bank. Compared to the Certo Card, the better conditions abroad are particularly noteworthy. The main advantages are:

• No annual fee, including additional card
• No foreign currency fee
• Two free cash withdrawals per year abroad
• 1 Cumulus point per CHF 1 spending at Migros
• 1 Cumulus point per CHF 3 spending outside Migros

With this card, you can collect Cumulus points directly: 500 Cumulus points correspond to a CHF 5 shopping voucher at Migros. So, you get 1% cash back for purchases at Migros and 0.33% outside Migros. While the Cembra Card offers an attractive bonus program where the money is automatically refunded on the card statement and you get 1% back in more than just Migros, for frequent travelers, the Cumulus Credit Card is more attractive. You save on fees for transactions and cash withdrawals abroad.

However, the statement “no foreign currency fee” requires clarification: While no additional fee is charged, the exchange rate set by Viseca is usually 1% to 3% above the reference rate. Therefore, debit cards like Neon, Revolut, or Wise remain the best choice for intensive foreign use. However, for certain situations, such as some car rental bookings requiring a credit card, the Cumulus Visa is the best option.

The credit card is managed by Viseca and offers a modern app with all desired functions. Furthermore, the card’s insurance package surpasses that of the Certo Card: In addition to best price guarantee and rescue costs, legal protection and purchase insurance are also included.

Swisscard Cashback Cards - for Maximum Cashback

The Cashback Cards are offered as a card duo - consisting of an American Express and optionally a Mastercard or Visa.

• No annual fee, including additional card
• 1% cash back on the American Express
• 0.25% cash back on the Mastercard and Visa

For those looking to maximize their cashback, this is the best option. American Express now enjoys high acceptance in Switzerland. However, it is advisable to always have the Mastercard or Visa as a backup in case Amex is not accepted.

However, these cards are not recommended for use abroad. The foreign currency fee is very high at 2.5%, and a minimum fee of CHF 10 applies for cash withdrawals. Swisscard, however, is known for its excellent customer service.

Order your cards here: https://www.cashback-cards.ch/de/cards

Coop Supercard Credit Card - for Super Points

With this credit card, Coop offers the counterpart to the Cumulus Credit Card from Migros. The advantages are:

• No annual fee
• 1 Superpoint per CHF 1 spent at Coop
• 1 Superpoint per CHF 3 spent outside Coop

The advantage of this card is that Superpoints can be used in a variety of ways. Like at Migros, you can pay with a rate of 100 points to 1 Franc at Coop. In addition, you can also exchange your Superpoints for miles in the Swiss Miles & More frequent flyer program.

Apart from that, the card is not special. There is a fee of 1.5% for purchases abroad. And cash withdrawals cost at least CHF 10 per withdrawal. The card is issued by Topcard. The app is outdated and cannot compete with the competition. There is a basic travel accident insurance.

I can only recommend the credit card to those who absolutely want to collect points at Supercard.

Order your card here: https://www.supercard.ch/de/kreditkarte.html

Conclusion

For most Swiss, the Cembra Certo Mastercard is worth considering, as it offers attractive bonus programs and has no annual fee. With a 1% cashback at selected stores and easy handling, it’s a good choice for daily use. However, for frequent travelers, the Migros Cumulus Credit Card may be advantageous, as it has no fees for foreign transactions and earns Cumulus points that can be converted into shopping vouchers. The Swisscard Cashback Cards provide another option for maximum cashback, especially with the American Express card. Lastly, the Coop Supercard Credit Card is a solid choice for those who enjoy shopping at Coop and want to collect Superpoints, although it incurs fees abroad.