Credit card or debit card?
26 septembre 2020
What is a debit card?
In the case of the debit card (still often referred to as an EC card or payment card as before), the amount due is immediately deducted from the account balance. The debit card is directly « connected » to the private account; it is therefore to be considered as a service of a private account of a bank. In Switzerland, this is essentially the Maestro (formerly EC) card. From 2014, the Visa V-Pay debit card will also be offered by some banks.
Many banks also offer, in addition to the Maestro or V-Pay card, their own free bank card, often referred to as an « account card ». This usually allows you to withdraw money free of charge only at the bank’s counter and at its individual ATMs.
PostFinance does not offer a Maestro card, but the PostFinance Card. The PostFinance Card allows you to withdraw cash from ATMs of other banks in Switzerland and from cash dispensers abroad. However, payments with the PostFinance Card are not possible abroad.
How much does a debit card cost?
The debit card is acquired through a private account. Often an annual fee (between CHF 20 and 50) is charged. In addition, there are transaction fees for cash withdrawals and purchases in Switzerland and abroad.
Within Switzerland, a distinction is often made between withdrawals from the bank’s own ATMs and those of other banks; while withdrawals from their own ATMs are always free of charge, many banks charge a fee of CHF 2 per withdrawal from another ATM.
Abroad, a cash withdrawal costs between 3 and 5 francs and sometimes a sum proportional to the amount withdrawn, varying between 0.25% and 0.5%. In a few rare cases (e.g. in the case of a youth account), no fees are charged for cash withdrawals.
In general, the latter are significantly cheaper with a debit card than with a credit card, both in Switzerland and abroad.
As with credit cards, purchases in Switzerland with Swiss francs are almost always free of charge – for purchases in foreign currencies (e.g. abroad), transaction fees as well as currency conversion fees apply.
Transaction fees vary from one bank to another; they may be a percentage of the sum (between 0 and 1.5%), a fixed amount (between 0 and 2.50 francs) or a combination of fixed and proportional fees.
What is a credit card?
Unlike a debit card, the amount due is not immediately deducted from the account with a credit card. Usually, amounts are deducted once a month, for example, with the possibility of partial payment in the case of many cards.
A credit card can also often be detached from a private account and concluded with a credit card company; for example, a direct debit procedure (LSV/LSV+) can be established for debiting the account with the amounts present on the credit card.
How much does a credit card cost?
An annual fee is often charged for a credit card. This fee can be much higher than for a debit card. In addition, there are transaction fees for cash withdrawals and purchases in Switzerland and abroad. The fees for cash withdrawals are usually twice as high as with a debit card.
Within Switzerland, purchases in Swiss francs are, as with debit cards, practically always free of charge – in the case of cashback cards, the card owner is even credited with a percentage of the purchases. For purchases in foreign currencies (e.g. abroad), fees are charged. These consist of the transaction fee and the currency conversion fee. The transaction fee is between 1.2% and 2.5% of the purchase price, plus currency conversion fees.
Comparison of debit and credit cards
A debit card is cheaper for cash withdrawals in Switzerland and abroad, while a credit card costs considerably more in these cases.
For purchases in Swiss francs within Switzerland, debit and credit cards can be used free of charge. However, a credit card purchase can be advantageous in the case of credit cards with purchase-dependent bonus systems such as cashback, purchase credits or discounts.
For purchases abroad in foreign currency, the difference is less pronounced. However, the golden rule still applies: large amounts are paid with a debit card, while smaller amounts are paid with a credit card. The limit varies according to the provider, but generally from around CHF 100 to 200, the debit card is the most favourable solution.
Annual fees vary considerably by card, yet debit cards are on average less expensive. On the other hand, only credit cards offer additional services such as insurance and bonus systems.
In any case, it is best to compare the cards individually – the comparisons on moneyland.ch take into account the total costs as well as the additional services.
And if you would like a personalised analysis of your cards, please contact us by email at info »@ »moneyland.ch
For more information:
To the comparison of private accounts and debit cards
To the credit card comparison