Credit Card Advantages and Disadvantages in Switzerland 2024

In Switzerland, credit cards are widely used. Almost everyone has one in their pocket. Some use them every day, others only in cases of emergency. In this article about the advantages of credit cards, we take a closer look at the following topics.

Why are credit cards so popular? Should you get one? Why do you need a credit card at all? What are credit card advantages, and are there also disadvantages?

What is the biggest advantage of credit cards?

Many credit card advantages are quite nice. However, there is one main reason most people own a credit card: Reward programs.

Credit cards can do more than just pay. Many offer what are called rewards programs (also known as bonus programs or advantage programs). For every purchase, you get points or something similar. Some banks also call it cashback or miles. These points accumulate.

Then, you exchange them for rewards, gifts, or discounts. Some cards also offer special rates for air travel.

You have to know that credit card providers mainly make money from the fact that when you make a purchase using your credit card, a small percentage of the price goes to the bank.

So, for example, if you buy something for CHF 100, the store might get CHF 97, and the bank of your credit card gets CHF 3. For this reason, banks want you to pay with your credit card. To give you an incentive, you get something when you use the card.

It’s like a little thank-you for using the card. You spend money and get some of it back at the same time. Normally, the reward program revolves around 1%, so in the above example, you would get CHF 1 back in points out of the CHF 3 that the bank earned.

If you do the math, it pays off in the long run. Imagine the following calculation, for example:

You pay CHF 2,000 per month with your credit card. With 1% cashback or points, that would amount to CHF 240 per year that you would get back.

Because you don’t have to do anything but change your card and pay with your credit card, this is generally the most talked-about credit card advantage.

What are other advantages?

However, credit card benefits also go beyond cashback or points. Many more benefits are also great, for example, various insurances. Below, you will find more credit card advantages that may convince you.

1. Convenience and flexibility

Credit cards are convenient. Whether in a café, supermarket, or online, with a credit card, you pay quickly and easily. No rummaging for change, no waiting, and when the end of the month approaches and money is tight, no problem. With a credit card, you buy today and pay later. You’re not directly tied to your bank account. And if you spontaneously want to buy a gift that’s a few francs over, that’s no problem with the card. Quite a few people even pay their rent by credit card because it offers so many advantages.

2. More security when paying

Security is essential. An important advantage of credit cards is that they offer this security. If you lose your card or it gets stolen, it’s annoying, but there’s no reason to panic. All it takes is a phone call, and the card is blocked. Most providers now have an app where you can block cards with one click.

What about fraudulent charges? – Credit cards are very well protected, and if something does happen, you get your money back in the vast majority of cases. This is part of the deal with the credit card providers.

You also don’t carry as much cash with you. This reduces the risk of losing money or being robbed.

3. Travel benefits

Traveling with a credit card is just great. Why? – Because, unlike with cash, you can pay anywhere in the world. Whether you’re in Paris, New York, or Tokyo, the card is accepted.

Many cards also offer travel insurance. This means that if something goes wrong, you are covered for various things. For example, if you lose your luggage, the insurance helps. Do you have to cancel your trip? – Well, often, you even get your money back (depending on the card).

4. Liquidity management

Credit cards help with money management. Every month, you get a summary. It shows in black and white what you have bought during the month. So you keep the overview.

Large purchases are also no problem because, with the card, you can pay in installments. This relieves the account in the short term, so you don’t get into any bottlenecks.

What are the disadvantages of credit cards?

1. Interest and fees

Credit cards are not always free. Yes, they offer many advantages. But they can also be expensive. How? – Through interest and fees.

After all, if you don’t pay your bill on time, interest accrues, and it can be quite high.

And then there are the fees that come with many credit cards. Annual fees, fees for cash withdrawals, or fees for using the card abroad. At the end of the year, this can be a tidy sum. Therefore, you should always check the conditions.

If you want to reduce or completely avoid the costs, this is easily possible. I personally enjoy many different credit card advantages from different providers, completely free of charge. You just have to pick out the best offers; then, you pay nothing at all.

2. Debt risk

Credit cards are tempting. You can buy even if your account is empty. But, of course, there are dangers. It’s easy to spend more than you have. And then? – Then the mountain of debt grows month by month until you can no longer pay it.

So you should be careful and only ever spend as much as you can pay back. But responsible people usually don’t have a problem with that.

3. Security risks

Yes, credit cards are secure. But they are not invulnerable. Fraudsters are everywhere. They try to get card data. And when they have them, they buy on someone else’s account. That can be expensive, of course, which is why you should protect your card.

If you take care not to lose your code and regularly check your statements, security is vanishingly rarely a problem.

4. Dependence on technology

Credit cards are modern and use fairly new technology. But what if the technology fails? If the card reader doesn’t work? Or if the Internet goes down? – Then you’re left with no cash and no way to pay. That can be embarrassing or even problematic if you need something urgently.

That’s why you should always have a plan B, like some cash or a second payment option. In Switzerland, for example, a Twint account or a second credit card can come in handy.

What does our survey on credit card benefits say?

Most people who apply for a credit card are happy with it. Many, myself included, even have multiple credit cards to get the best possible credit card advantage in every situation because of the different rewards programs.

I did a little survey about whether people are satisfied with their decision to apply for a credit card. People were asked 4 questions and could choose one of the following answers:

• Yes, highly = 5
• Yes = 4
• Medium = 3
• Not really = 2
• On the contrary = 1

Here are the average results.

Are you satisfied with your decision to apply for a credit card? Ø = 4.25

Has your everyday payment routine been simplified? Ø = 5

Are the credit card benefits worth it? Ø = 3.75

Would you recommend people to get a credit card? Ø = 4.25

As you can see, most Swiss people are extremely satisfied with their credit cards. No wonder, since the frequency of this payment method speaks for its trustworthiness.

So, if you are still struggling to decide, I can advise you to just give it a try. You can always go back, and from experience, I know that people like you, who inform themselves about risks in advance, do not have the slightest problems with the correct handling of a credit card.

Does it make sense to have a credit card?

It definitely makes sense to have a credit card, as long as you can use it responsibly. When used correctly, they are a useful tool in everyday life that can also minimize costs and grant discounts.

We have compiled an overview of the various credit cards in Switzerland, sorted by user category. Take a look if you are thinking about getting one.

👍 Their biggest advantage is the attractive rewards programs, where you can earn points, cashback, or miles, which are later converted into rewards or discounts.

👍 In addition, credit cards offer convenience and flexibility in payment, increased security through instant blocking in case of loss or theft, travel benefits such as worldwide acceptance and travel insurance, and the ability to manage liquidity through monthly statements.

👎 Still, be aware of the potential drawbacks. Credit cards can get expensive if you don’t pay interest and fees on time. There is a risk of debt if you spend more than you can pay back. Also, credit cards are dependent on technology, which can cause problems on rare occasions.

However, as my small survey above shows, most people in Switzerland are happy with their decision to have a credit card. As long as you use it responsibly and understand the terms, a credit card can be a valuable addition to your financial strategy.

It’s best to try it out and test the various credit card advantages and disadvantages yourself!