Using Credit Cards on Holiday: Practical Tips

For many travelers, credit cards are the most practical way to pay in foreign countries. These tips from online comparison service moneyland.ch can help you avoid problems and unnecessary expenses when using credit cards on holidays.

1. Compare

Get the right credit card before you go on holiday. Costs and features differ between cards. The credit card comparison on moneyland.ch can help you find the right credit card. It is also possible that a prepaid card is more suitable for your holiday needs. You can use the prepaid card comparison to find the most suitable prepaid card.

2. Pay attention to foreign transaction fees

When choosing a credit card for your holiday, pay careful attention to fees and charges for making payments in foreign currencies. These include the foreign transaction fee (between 0 and 2.5 percent, depending on the card) and currency exchange rate markups. The credit card comparison and prepaid card comparison account for both foreign transaction fees and exchange rate markups (franc-euro exchange rates, based on regular sampling).

3. Check your credit card’s expiry date

Check the expiry date of your credit card before you travel. Make sure that your credit card will remain valid throughout your entire holiday.

4. Check your card’s spending limits

Make sure you know your card’s spending limit. If the limit is too low, have your card’s issuer raise it before you go on holiday. This is especially important if you already use up part of your line of credit or spending allowance before you leave on holiday.

5. Take the right credit card with you

Before you go on holiday, get informed about which payment methods work best in the country you are traveling to. In some countries, certain credit cards are not widely accepted or are not accepted at all. Examples include some countries in Africa, and countries like Cuba and Venezuela.

6. Do not pay in Swiss francs

Always avoid using dynamic currency conversion when traveling. In simpler terms, that means you should always choose to pay in the local currency, not in Swiss francs. The additional fees charged when you choose to pay in Swiss francs are often very high, and can easily equal 3 percent of the transacted amount.

7. Do not make cash withdrawals with your credit card

Never use your credit card to get cash, except in emergencies (that rule also applies in Switzerland). When you withdraw money using a credit card outside of Switzerland, you pay a cash advance fee which can be as high as 4 percent of the amount you withdraw, plus foreign transaction fees (up to 2.5 percent), plus markups on currency exchange rates. Depending on which ATM you withdraw the money at, you may also be charged an ATM fee.

Instead, you should make cash withdrawals using a debit card (a Debit Mastercard, Postfinance card, or Visa Debit, for example). Doing so will save you a lot of money. Exception: There are credit cards which let you make cheap or even free cash withdrawals in some cases. For example, with the Migros Cumulus credit card you can make two cash withdrawals of up to 500 francs per withdrawal outside of Switzerland every year, without paying any cash advance fees (though currency exchange costs still apply).  

8. Use a debit card for bigger payments

When you pay for big purchases in foreign countries, you can save money by using a debit card instead of a credit card. The rule of thumb: Use a credit card to pay for smaller purchases (up to 100 or 200 francs), and a debit card to pay for bigger purchases. But exceptions may apply, depending on which cards you use. Paying for purchases abroad with debit cards from neobanks, for example, is normally cheaper than paying with credit cards, regardless of the amount.

9. Freeze your credit card

If you lose your credit card, you should have the card frozen as soon as possible. Call your card issuer and instruct them to freeze your credit card.

10. Check your credit card’s geoblocking limitations

Before traveling, make sure that your credit card is enabled for use in your destination country. If it is not, make sure to contact your card issuer and have them disable geoblocking for that country before you go on holiday.

11. Keep your receipts

Keep important credit card receipts which you accumulate during your holiday. This is important because if you notice incorrect charges on your credit card statement, the receipts will serve as evidence that can help you recover your money.

12. Consider neobank cards

The cards offered by neobanks often have the lowest fees and the most favorable currency exchange rates for travel. However, most neobank cards are not credit cards, but debit cards. In some cases, such as when you make bookings at certain hotels or rental car companies, debit cards may not be accepted in place of a credit card. For that reason, taking an affordable credit card on holiday with you in addition to your neobank card can be beneficial.

More on this topic:
Compare Swiss credit cards now
Credit card foreign transaction fees explained
Dynamic currency conversion explained