Credit Card or Debit Card?

Debit cards and credit cards are both widely used in Switzerland. This article from moneyland.ch explains the most important differences between these two kinds of payment cards.

What is a debit card?

With debit cards – often referred to as EC cards in Switzerland – purchases charged to the card are deducted directly from the linked bank account. A debit card is attached to a private account, and is offered by banks as a banking service.

Up until recently, the majority of debit cards used in Switzerland were Maestro cards. A few banks also offered their customers V Pay debit cards from Visa.

Now, an increasing number of Swiss banks are introducing the new Debit Mastercard and Visa Debit. These are replacing the Maestro and V Pay debit cards, which are being phased out. Unlike the Maestro and V Pay cards, the new debit cards can be used for making online purchases. You can find out which Swiss banks offer their customers the new cards here.

PostFinance is the only Swiss bank which uses its own debit card rather than a Mastercard or Visa debit card. The PostFinance card lets you make cash withdrawals both in Switzerland and abroad, but can only be used for direct card payments in Switzerland.

What do debit cards cost?

Debit cards are offered as a service in combination with private accounts. In many cases, you are charged an annual card fee. This fee typically ranges between 40 and 50 francs per year at conventional Swiss banks. Some banking offers include complimentary debit cards. Cash withdrawals at ATMs operated by other banks and purchases outside of Switzerland generally incur fees. Withdrawals at your bank’s ATMs are generally free of charge. Some Swiss banks charge a fee (typically 2 francs per withdrawal) when you get money at ATMs operated by third parties. Most banks charge 5 francs per withdrawal when you get cash outside of Switzerland. Some banks charge an additional, transaction-based fee on top of this (typically between 0.25 and 0.5 percent).

In some cases (youth accounts, for example), the annual fee for debit cards is waived. Making cash withdrawals with debit cards is generally much cheaper than getting cash advances with credit cards. This applies both in and out of Switzerland.

You generally do not pay a fee when you use a Swiss debit card to pay at Swiss POS terminals. When you make purchases in foreign currencies (from foreign merchants, for example), you generally pay foreign transaction fees and currency exchange markups.

Foreign transaction fees vary from bank to bank. They may be charged based on transactions (up to 2 percent of the purchase), as fixed fees (up to 3 francs per transaction), or as a combination of both transaction-based and fixed fees. Many banks charge a fee of 1.50 francs for each direct payment at POS terminals outside of Switzerland, plus currency exchange markups.

What is an ATM card?

In addition to Maestro, Debit Mastercard, and Visa Debit cards, some Swiss banks also offer their own ATM cards free of charge. ATM cards let you access your account and make cash withdrawals at your bank’s ATMs. You cannot use an ATM card to withdraw cash at ATMs from other banks or from foreign ATMs. You also cannot use it for direct purchases at POS terminals.

What is a credit card?

The biggest difference between a credit card and debit cards is that purchases and cash advances are not charged to your bank account. Instead, they are charged to a card issuer, which then bills you for the amount you owe (normally once a month). You can generally get credit cards directly from issuers without needing to have a bank account at a specific bank.

In Switzerland, many credit card users automatically pay their monthly credit card bills in full, often using direct debit orders or eBills. But you also have the option of paying bills individually. In that case, you can choose to only pay a small part of the amount owed and carry the rest of your balance as credit card debt. Interest is charged on credit card balances which are carried over past the due date.

How much do credit cards cost?

Many Swiss credit cards have annual fees, and these can be much higher than those of debit cards. But there are also no-annual-fee credit cards in Switzerland, such as those offered by Coop, Manor, and Migros.

In addition to the annual fee, you also pay transaction fees for cash withdrawals in Switzerland and abroad. These cash advance fees are often more than twice as high as those of debit cards.

As with debit cards, purchases from Swiss merchants in Swiss francs are generally free of charge. In the case of cash back credit cards, you are even rewarded for your purchases in the form of statement credits based on a percentage of the amount you spend. Other reward credit card let you earn points for purchases.

You pay foreign transaction costs when you buy from foreign merchants (online or while traveling abroad, for example). These costs are made up of the foreign transaction fee and markups on currency exchange rates. The foreign transaction fee is normally equivalent to between 1.2 and 2.5 percent of the amount transacted, depending on the credit card. Markups on exchange rates are variable and can change any time.  

Debit and credit cards compared

Using a debit card for cash withdrawals is recommended whether you make them in Switzerland or abroad. Getting cash using credit cards is much more expensive in both cases.

Direct card payments at Swiss POS terminals are free for you as the card user regardless of whether you pay by debit card or credit card. Some credit cards offer cash back, vouchers, or discounts, and using these to pay at Swiss merchants can be worth it in some cases.

For direct payments outside of Switzerland, the difference between debit and credit cards is less pronounced – at least in the case of cards from conventional banks and issuers. Neobanks, on the other hand, offer debit cards and prepaid cards with very attractive exchange rates and low fees for foreign purchases.

Older Swiss debit cards (Maestro, V Pay) cannot be used for online purchases. The PostFinance debit card is accepted by some Swiss online merchants. Newer debit cards (Debit Mastercard and Visa Debit) can be used to pay at nearly all of online stores which accept Mastercard or Visa credit cards.

Nearly all Swiss credit cards and debit cards are NFC-enabled. But there are still some debit cards which cannot be used for contactless payments.

Credit cards offer an advantage if you used mobile payment services like Apple Pay and Google Pay because many Swiss credit cards are compatible with these. But there are also some debit cards which can be used with Apple Pay and other mobile wallets.

Comparing offers based on your specific needs is always worth it. The moneyland.ch comparisons account for all possible costs and supplementary services. Use these interactive comparisons to find the best cards for your needs:
Swiss credit card comparison
Prepaid card comparison
Debit card and private account comparison
Bank package comparison (including debit and credit cards)