What is the best way to pay for purchases outside of Switzerland? In most cases, your choices will be limited to paying in cash in the local currency, using a debit card (the Maestro Card is the most common) or using a credit card.
Using a Maestro card to pay for purchases while abroad
Financial services providers normally charge either a fixed fee or a fixed percentage of each transaction when you use your debit card to pay in a foreign currency. The most widely available debit card networks in Europe is the Maestro network, owned by U.S. payment network MasterCard. The V-Pay debit card from Visa is also becoming increasingly popular in Europe.
The PostFinance Card is one of the most popular debit cards in Switzerland. But while you can use the PostFinance Card to pay at many merchants within Switzerland, it cannot be used to pay for purchases outside of the country (you can make cash withdrawals at Eufiserv and Visa Plus ATMs).
The fees you pay for Maestro and V-Pay transactions will depend on the terms and conditions of the checking account or banking combo attached to the card.
Cost of using your debit card to pay for purchases abroad: 1% to 1.5% of the purchase amount or between CHF 1 and CHF 2.50 per transaction. A combination of both types of fees is common. For example, you may pay a base fee of CHF 1.50 plus 0.5% of the purchase amount. You also pay a markup on currency exchange rates.
Using your debit card to withdraw cash outside of Switzerland
Unfortunately, you pay a fee to make cash money withdrawals outside of Switzerland using your Maestro or V-Pay debit card. Depending on the card issuer, you will pay between 3 and 5 francs per withdrawal. Some banks also charge a percentage of the amount you withdraw, typically 0.25% to 0.8%.
As if that weren’t enough: Depending on the ATM you use, you may pay additional fees imposed by the ATM’s operator. As much as possible, avoid using non-bank ATMs, such as those operated by currency exchange services, as they often charge above-average fees.
Withdrawing cash from your account at the counter of a foreign bank can be equally expensive.
Using a credit card to pay for purchases outside of Switzerland
Every time you use a credit card to pay for a purchase in a foreign currency, credit card issuers charge you a foreign transaction fee and currency exchange markups. Foreign transaction fees range between 1.2% and 2.5% of each transaction, depending on the credit card you use.
Using a credit card to make ATM withdrawals outside of Switzerland
Using a credit card to get cash outside of the country will hit your wallet hard. You will pay fees equal to as much as 4 percent of the amount you draw, with a minimum charge of 10 francs per cash advance. Add to that the foreign transaction fee, currency spread markups and possible ATM operator fees, and you are paying crazy amounts of money.
Tips for making purchases outside of Switzerland
The specific card you use will determine whether a debit card or credit card is the more affordable way to pay. The rule of thumb is: Credit cards work out cheaper when used directly to pay for small purchases. Debit cards are normally the more affordable way to make large payments.
It is also worth taking possible credit card rewards and cash back programs into account. The moneyland.ch comparison tool accounts for these savings.
Tips for making cash withdrawals abroad
Never use a credit card to get cash, unless you have no other choice. Use your debit card (Maestro, V-Pay, PostFinance) instead. Just be aware that fees also apply to cash withdrawals made with a debit card.
Inform yourself about the most affordable ATM options at your destination before you travel. Ask your bank or search the web for useful information.
For example, your bank may have partnerships with financial services providers in the country which you will be visiting, and you could save a lot of money on fees by withdrawing money at those partners during your visit.
If you want a detailed analysis of your specific credit card, write us a quick email at info«@»moneyland.ch.
The moneyland.ch team
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