Accounts & Cards

# Credit Card Foreign Transaction Fees Explained

September 27, 2021

Find clear examples of how Swiss credit card foreign transaction fees affect you in this moneyland.ch guide.

When you use a Swiss credit card to pay for a purchase or to get a cash advance in a foreign currency, you pay a number of fees and charges which are explained in the examples below. For information on foreign transaction fees for Swiss-franc payments made outside of Switzerland please refer to the moneyland.ch guide to dynamic currency conversion.

Example 1: A 1000-euro purchase outside of Switzerland

Suppose you make a purchase worth 1000 euros and charge it to your Swiss-franc-denominated credit card. The credit card issuer uses an exchange rate of 1.250 Swiss francs to the Euro and charges a 1.5% foreign transaction fee. The official interbank exchange rate in this scenario is 1.225 francs to the euro.

Amount in euros: 1000.
Equivalent in Swiss Francs using issuer exchange rates: CHF 1250.
Total including 1.5% foreign transaction fee in Swiss francs: CHF 1268.75.
Equivalent in Swiss francs using official exchange rates: 1225.
Foreign transaction fee: CHF 1268.75 – CHF 1250 = CHF 18.75.
Markup on currency exchange rates: CHF 1250 – CHF 1225 = CHF 25.
Total cost of transaction: CHF 1268.75 – CHF 1225 = CHF 43.75.

An alternative calculation method (not normally shown on card statements) uses a higher markup on currency exchange rates, while the foreign transaction fee works out lower for the same transaction amount. In this method the foreign transaction fee is applied after the currency exchange. Whichever method is used for calculations, the total cost is identical.

The total foreign currency transaction fees shown in the moneyland.ch credit card comparison are accounted for in the total costs show for each card.

Example 2: A 1000-euro cash advance outside of Switzerland

Suppose you use your credit card to withdraw 1000 euros from an ATM while traveling. In this scenario, the currency conversion rate used by the card issuer is 1.250 Swiss francs to the euro. The foreign transaction fee is 1.5% and the cash advance fee is 3.5% with a minimum fee of 10 francs. The official interbank currency exchange rate is 1.225 francs to the euro.

Amount in euros: 1000.
Equivalent in Swiss Francs using issuer exchange rates: 1250.
Amount including 1.5% foreign transaction fee in CHF: 1268.75.
Total amount including the 3.5% cash advance fee in CHF: 1313.15.
Equivalent in Swiss francs using official exchange rates: 1225.
Foreign transaction fee: CHF 1268.75 – CHF 1250 = CHF 18.75.
Cash advance fee: CHF 1313.15 – CHF 1268.75 = CHF 44.40.
Markup on currency exchange rates: CHF 1250 – CHF 1225 = CHF 25.
Total cost of transaction: CHF 1313.15 – CHF 1225 = CHF 88.15.

An alternative calculation method (not normally shown on card statements) results in higher markups applied to currency exchange rates, but lower foreign transaction fees and cash advance fees because fees are only applied after the currency exchange. The total cost is identical no matter which method is used.

The costs of cash advances in foreign currencies are accounted for in the total costs shown in the credit moneyland.ch card comparison by moneyland.ch, based on your profile.

Tip: You can save a lot of money on fees and charges by using the right credit card for foreign purchases. The comprehensive and unbiased credit card comparison on moneyland.ch makes it easy to find the right card for your travel needs.

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Expert Benjamin Manz
Benjamin Manz is CEO of moneyland.ch and an independent expert on banking and finance.
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