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 loading 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
The Migros Cumulus Mastercard issued by Cembra Money Bank on behalf of Swiss retailer Migros is the most widely-used credit card in Switzerland. It is only issued as a Mastercard, not as a Visa card. Cardholders are rewarded with Migros Cumulus reward points when they use the card to make purchases both from Migros stores and other merchants.
Coop Supercard Credit Card
As of November 1, 2018, the new Coop Supercard issued by Topcard has replaced the Coop Supercardplus issued by Swisscard as the Coop retail group’s rewards credit card. The new card was introduced after Coop and Swisscard ended their longstanding partnership. Like its predecessor, the Supercard credit card is offered in both Mastercard and Visa versions. The new Coop Supercard is also available as a prepaid card, but this prepaid card has a loading fee which is charged every time money is added to the prepaid card account. Supercard credit card users are rewarded with Coop Superpoints when they use the card to pay for purchases both from Coop stores and from other merchants.
Cashback credit card from Swisscard
The new Cashback credit card from Swisscard was also launched on November 1, 2018 as Swisscard’s alternative to the phased-out Coop Supercardplus credit card. The card is available in Visa and Mastercard versions. It is the first no-annual-fee credit card issued in Switzerland which is compatible with the Apple Pay and Samsung Pay mobile wallets. More importantly, it is the Swiss cash back credit card which does not have an annual fee.
All three of these cards charge a 1.5% foreign transaction fee for both transactions in foreign currencies and purchases from foreign merchants which are transacted in Swiss francs.
Unlike some other Swiss credit cards, all of these credit cards have a fee for paper card statements (1.95 Swiss francs per statement for all three cards).
The customer support line may also be a paid service: Swisscard and Topcard both charge 1.90 francs per minute for customer service calls relating to their no-annual-fee credit cards.
All free credit cards also have hidden charges for foreign currency transactions in the form of currency exchange spreads. The Migros Cumulus Mastercard using Cembra Money Bank’s exchange rates. The Supercard credit card issued by Topcard uses UBS exchange rates. The Cashback credit card uses Swisscard’s exchange rates.
UBS Basic Card
As well as the Migros and Coop cards, there are other credit cards which do not have an annual fee when you meet certain criteria.
The annual fee of the UBS Basic Card Visa/Mastercard is waived when you use it to make at least 24 transactions in one year. If you do not make that amount of transactions within a given year, you will have to pay a 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 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 cards: 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.
Note: Up until March 2016, the Visa Bonus Card did not have an annual fee for the first year and the annual fee for subsequent years was waived for years in which cardholders charged 300 francs or more in purchases. In March 2016, the card was replaced by the Visa Bonus Gold card which has an annual fee.