There is no such thing as a completely free credit card. This is as true in Switzerland as it is anywhere else. If there was, the credit card issuers that offer them would not be able to operate, much less make a profit.
When card issuers talk about a “free credit card,” what they mean is that the card has no basic annual fee.
But credit cards come with a long list of incidental fees and charges aside from the annual fee. This applies to so-called “free” credit cards as well.
Whether or not you pay incidental fees depends on how and where you use credit cards. Fees you pay might include foreign transaction fees, currency exchange spreads (these are a form of hidden fee) and cash advance fees. Most prepaid cards have loading fees which you pay every time you add money to your prepaid card account.
You may also be charged additional fees when you use certain payment services (like postal deposit slips) to settle your credit card bill or add money to your prepaid card account. Issuers may also charge fees for physical monthly card statements, for replacement cards, for freezing your account or for customer service from their call centers.
Migros Cumulus Mastercard
The Migros Cumulus Mastercard issued by Cembra Money Bank on behalf of Swiss retailer Migros is the most widely-used credit card in Switzerland. This card has no annual fee. It is only issued as a Mastercard. The card doubles as a Migros Cumulus loyalty card. You can earn additional Cumulus points by using this card to pay at non-Migros merchants. A unique feature of this card is that it can be used to get cash advances at Migros Stores with no cash advance fees.
Coop Supercard Credit Card
The Coop Supercard issued by Topcard combines a Coop Supercard loyalty card with a no-annual-fee credit card. The Supercard credit card is offered in both Mastercard and Visa versions. It is also available as a prepaid card (a loading fee applies). Supercard credit card users can use the card as a Supercard loyalty card to earn reward points at Coop stores. You can earn additional points by using the card to pay at non-Coop merchants.
Cashback credit card from Swisscard
The Cashback credit card from Swisscard is available in American Express, Visa and Mastercard versions. These are the first cash back credit cards offered in Switzerland which do not have annual fees. They are also the first no-annual-fee credit cards issued in Switzerland which are compatible with the Apple Pay and Samsung Pay mobile wallets.
The Migros Cumulus Mastercard and the Coop Supercard credit card both have 1.5% foreign transaction fees. The Swisscard Cashback credit cards have 2.5% foreign transaction fees. For all of these cards, foreign transaction fees apply both to transactions in foreign currencies and to purchases from foreign merchants transacted in Swiss francs.
All of these credit cards have a fee (1.95 francs) for physical card statements printed and posted to you as the cardholder.
The customer support line is a paid service at both Swisscard (Cashback credit cards) and Topcard (Coop Supercard credit cards). Both of these issuers charge 1.90 francs per minute for customer service calls from no-annual-fee credit card holders.
All free credit cards also have currency exchange spreads. These are markups which you pay on interbank exchange rates when you use your card to settle payments in foreign currencies. The Migros Cumulus Mastercard uses Cembra Money Bank’s exchange rates. The Supercard credit cards issued by Topcard use UBS exchange rates. The Cashback credit cards use Swisscard’s exchange rates.
UBS Basic Card
There are other credit cards for which annual fees are waived when you meet certain criteria.
The annual fee of the UBS Basic Card Visa/Mastercard credit card is waived when you use it to make at least 24 transactions in one year. If you do not make that number of transactions within a given year, you will have to pay the 40-franc annual fee (the annual fee is always waived for the first year regardless of transactions).
There are also prepaid cards that do not have annual fees, such as the Swiss Bankers Travel Cash Card.
Last but not least, it’s worth mentioning that when you get a credit card as part of a bundled bank package, you won’t usually pay an annual fee for it. In this case, the credit card's annual fee is included in the bundle's flat fee.
Free credit cards: Pay attention to interest rates
The interest rates applicable to credit card balances which you carry from month to month are high. All of the no-annual-fee credit cards currently available have relatively high interest rates. Interest charges are a major source of income for credit card issuers.
Cembra Money Bank (Cumulus Mastercard) and Topcard (Coop Supercard) charge interest from the posting dates – the dates on which card transactions occur. Swisscard charges interest from the billing date – the date on which the billing cycle ends and you are sent your card statement. You pay more interest when the posting date model is used. You can avoid interest charges by paying your credit card bill in full at the end of each billing cycle. You can find more information in the guide to carrying balances on Swiss credit cards.
Free credit cards: How and where you use them makes the difference
Whether or not you pay any fees or charges when you use a no-annual-fee credit card depends entirely on how you use it.
Using a no-annual-fee credit card will not cost you anything if you: only use your credit card to pay directly for purchases in Swiss francs from Swiss merchants; do not use your card to pay for purchases from merchants who pass on interchange fees; do not use it to make purchases from foreign merchants; do not use it to make payments in foreign currencies; do not use it to withdraw cash at ATMs; opt out of receiving physical card statements in favor of electronic statements; do not carry card balances past the end of each month.
Depending on your needs, getting a credit card which has an annual fee can make more financial sense. For example, credit cards may provide complimentary insurance coverages, price protection, airport lounge access, concierge services and other benefits. If you use these services, you may save a lot of money by getting a credit card which includes these benefits rather than paying for them individually, even if the credit card has an annual fee.
The only way to find out which credit card will save you the most money is to compare credit cards based on your individual needs.
The moneyland.ch credit card comparison tool is the only comparison in Switzerland which accounts for all costs and benefits. You can easily sort credit cards and prepaid card based on 20 different criteria including rewards (miles, points, cash back), customer satisfaction, discounts and vouchers and benefits (insurances, concierge services, airport lounge access) to find the card which matches your needs.