To cut straight to the chase: 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 annual fee.
But credit cards come with a long list of fees and charges aside from the annual fee. This applies to so-called “free” credit cards as well.
Fees you pay might include foreign transaction fees (plus additional fees hidden in the exchange rate) and cash advance fees. Prepaid cards normally charge you a load fee every time you deposit money into your card account.
Other supplementary fees you may incur, depending on circumstances, include fees for monthly card bills, monthly statements and replacement cards, plus fees for freezing your account or phoning the call center.
Migros Cumulus Mastercard and Coop SupercardPlus
The two most well-known free credit cards in Switzerland (and probably the two best-known Swiss credit cards altogether) are the Migros Cumulus Mastercard issued by Cembra Money Bank and the Coop Supercardplus Mastercard/Visa issued by Swisscard AECS.
What’s interesting about both of these cards is that the 1.5% foreign transaction fee doesn’t only apply to foreign currency transactions, but also to purchases made outside of Switzerland in Swiss francs.
In contrast to some other credit cards, both of these popular credit cards also charge a fee for each monthly paper credit card bill.
The customer service hotline is also costly: Swisscard, for example, charges CHF 1.90 to answer calls from Coop SupercardPlus customers.
UBS Basic Card
As well as the Migros and Coop cards, there are other credit cards that do not cost an annual fee when you meet certain criteria.
The UBS Basic Card Visa/Mastercard has no annual fee, as long as you use it to make at least 24 transactions per year. If you fail to make that amount of transactions, you will have to pay a 40-franc annual fee after the first year annual fee waiver.
There are also prepaid cards that do not have an annual fee, 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 bank package, you won’t usually pay an annual fee for it. Instead, you are charged a fixed fee for the entire package deal.
Free credit cards: Pay attention to interest rates
Free credit cards come with high penalty interest rates which apply when your payment isn’t made by the due date every month. Interest charges are a major source of income for Swiss credit card issuers.
Penalty interest rates for free credit cards are calculated based on the date each transaction was made, rather than the billing date. This means that affected cardholders pay more interest charges than they otherwise would. Tip: Always set up a recurring transaction for your credit card payment to avoid a late payment and subsequent penalty interest rates.
Free credit card: It’s all about how you use them
Depending on the way you use credit cards, a free credit card will not always be the cheapest option. A credit card with an annual fee can, in some cases, make more financial sense. The only way to find the most affordable credit card for your particular needs is by using a credit card comparison which takes all costs into account.
If you want additional benefits from your credit card, you should also find out what services come with each card. Cheap credit cards typically offer less cardholder benefits.
The moneyland.ch credit card comparison tool is the only comparison in Switzerland that integrates card benefits as well as costs. You can easily sort 16 different perks including insurance and rewards (miles, points, cash back) by the value they bring on the comparison results page.