The Best Cashback Credit Cards in Switzerland
Which of these cards would be best for you?
A cashback credit card can put some extra money in your pocket, if you use it regularly and pay your bills in full.
But, which cashback credit card should you choose? Here are some factors to take into consideration:
- The annual fee, if any
- The cashback rate
- Your shopping habits
- Whether or not you buy a lot of goods and/or services in currencies other than Swiss Francs.
Here’s an overview of four of the best cashback credit cards available in Switzerland.
Migros Cumulus-Mastercard
Issued by Cembra Money Bank, the retailer Migros’ Cumulus-Mastercard¹ has no annual fee and you can have a second card for a family member linked to your account at no extra cost.
Whenever you use the Migros Cumulus card, you’ll earn:
- one point for every franc you spend at a Migros store
- one point for every CHF 3 spent elsewhere worldwide.
Once you’ve accumulated at least 500 points, you can redeem them for coupons, which you can use as cash in any Migros-owned or partner store. This gives you a wide range of places to spend your cashback, from supermarkets to takeaways, from DIY stores to online retailers.
The Migros Cumulus card is certainly a good idea if you do a lot of your shopping at Migros-owned stores.
The cash back rate is 1%, so you’ll receive CHF 10 in vouchers for every 1,000 points you redeem. This is a generous rate of cashback when compared with other cards.
An extra benefit of the Migros Cumulus-Mastercard is that it offers travel insurance, as long as you pay for at least 51 percent of the cost of your trip with your card. The insurance covers you for a maximum of CHF 50,000 per year for cancellation and repatriation costs.
However, if you use your Migros Cumulus card abroad or when buying from an online retailer outside Switzerland, you’ll be charged a 1.5% transaction fee.
Although this is a lower fee than those charged by Swisscard and LiberyCard, transaction fees can add up to a sizeable amount over a year, if you use the card for several purchases in overseas currencies. This will reduce or perhaps even negate the value of the cashback you receive.
Swisscard Cashback Credit Cards
Choose from a Cashback World Mastercard or Visa card² issued by Swisscard, a joint venture between Credit Suisse and American Express.
You’ll earn 0.5% cashback on these cards until December 31st 2019. After that, the cashback rate will be 0.25%. The cashback is credited to your account every month.
Since there’s no annual fee for both your main card and additional cards, you’ll start earning cashback as soon as you begin to use your card.
However, you won’t earn cashback on everything. Some of the items excluded from cashback are:
- bank transfers
- cash withdrawals
- spending on the lottery, casinos or betting.
In addition, other fees are charged in certain circumstances, including:
- a 2.5% foreign currency and cross border handling fee
- a payment reminder fee
- a fee for a paper statement
- a fee for a replacement card.
Therefore, the cost of paying one or more of these fees may be higher than the cashback you receive.
An advantage of the Swisscard Cashback credit card is that you can pay using your phone after registering your card on Apple Pay or Samsung Pay.
A potential disadvantage of the Swissbank Cashback credit cards is that they don’t include insurance, as some other cards do.
PostFinance MasterCard Standard and Visa Classic Credit Cards
The PostFinance Mastercard Standard and Visa Classic³ credit cards both carry a fee of CHF 50 per year for the main card and CHF 20 for an extra card.
The cashback rate is 0.6% in the first year and 0.3% from the beginning of the second year. The cashback you’ve earned is paid into your account twice a year, in June and December.
Therefore, you’d need to spend CHF 8,500 in the first year to make a very small profit of just CHF 1 in cashback on this card.
From the second year, your spending would have to more than double to CHF 17,500. You’d then receive total cashback of CHF 52.20, giving you a profit of just CHF 2.50 on your annual fee.
Both these estimates assume that all your transactions are in Swiss Francs. You’d still be in deficit if some of your purchases were in foreign currencies, because you’d have paid a processing fee of 1.2% on all foreign currency transactions.
In conclusion, the PostFinance MasterCard or Visa Classic credit cards are probably only worthwhile if you’ll be spending at least CHF 25,000 on them in Swiss Francs. In this case, you’d make a profit of CHF 100 in the first year (after subtracting the annual fee) and CHF 25 in the second and subsequent years.
LibertyCard Visa Credit Card
LibertyCard Visa may be a good option for you if you travel regularly and require travel insurance. The LibertyCard carries an annual fee of CHF 60.
You receive two liberty points for every franc you spend on train fares, flights, hotels, petrol and other travel-related expenses, and one liberty point for each franc you spend on other goods and services.
You can exchange your liberty points for rewards on the LibertyCard website. Rewards include vouchers for hotels and airlines.
Alternatively, you can choose to have the equivalent value of your points credited to your account.
An extra benefit of the LibertyCard is a package of insurance cover, including:
· Travel insurance
· Bicycle insurance (for theft or damage)
· Credit card insurance (in case of loss or theft).
If you plan to take out at least one of these types of insurance, it might be worth having a LiberyCard Visa card, because the premium(s) would probably cost more than the card fee of CHF 60 per year. Study the terms and conditions carefully to ensure the insurance meets your needs and compare the price with alternative policies.
On the other hand, if you travel abroad frequently and/or often buy items in currencies other than Swiss Francs, the LibertyCard may be less advantageous because a 2% transaction fee is charged on each purchase in a foreign currency. That’s higher than the fees charged by the Migros Cumulus and PostFinance cards.
The exact rate of cashback on the LibertyCard is not clear but it is said to be 1.6% when exchanging double points for rewards and less than this if you choose to exchange these points for a credit on your account.
For normal points (i.e. for non-travel-related purchases) the cashback rate is said to be around 0.8% when exchanged for vouchers.⁵
How to Maximize Cashback in Switzerland
To maximize cashback, use your credit card for all your shopping, including groceries, clothing, travel and entertainment. Pay off the card in full each month, because the interest you pay on the outstanding balance is likely to be higher than the amount you receive in cashback.
Use your credit card for online shopping but bear in mind that you’ll have to pay a transaction fee if you buy something in a currency other than Swiss Francs. This fee may be higher than the cashback you’ll receive on your purchase.
Pay as many of your regular bills as possible with your credit card to gain more cashback.
Avoid using your credit card to withdraw money from ATMs. The fees charged on cash withdrawals are very high, starting at around 3.5%, and you won’t receive any cashback on cash withdrawals either.
A cashback credit card is a very useful addition to your wallet if you pay your bill in full every month. If possible, choose a cashback credit card without an annual fee, so you’ll begin to earn cashback right away.
On the other hand, if you require travel insurance or another benefit offered by a card with an annual fee, that card may suit you best, especially if you’ll be able to accumulate a lot of bonus points.
References
² Swisscard Cashback Credit Cards
³ PostFinance MasterCard Standard and Visa Classic Credit Cards
⁵ Best Credit Card in Switzerland of 2019 (see the comments section)
