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Avoid banking fees when paying in Swiss francs


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Arno
Arno
15564 posts
expert &
moderator
Mar 30, 2022 - 5:09 PM

Hi everyone,

Payment in a foreign currency, like the Swiss franc, is often pretty expensive. Many banks, including Paypal, charge a fee for transactions in foreign currencies. On top of that they use an expensive exchange rate, not the real exchange rate of the day.

You may not even notice this inflated exchange rate. Only if you take a close look into your transactions, you will see how much money you lost in the process.

As we are a travel website, we deal with this issue quite a lot. That's why we started working with Wise.com two years ago. Wise.com is an online bank that uses the real exchange rate and low transaction fees. You'll still pay them for their service, but a lot less than most regular banks.

An example: say that your home currency is USD. You spend CHF 5000 either online before your trip to Switzerland, or while there.

  • According to today's exchange rate, CHF 5000 = USD 5,415.89.
  • If you would pay through Paypal, for example, they would convert CHF 5000 to USD 5,602.77. In other words, you would pay USD 186.88 (5,602.77 - 5,415.89) extra on banking fees.
  • If you would pay through Wise.com, they would convert CHF 5000 to USD 5,437.51. You would only pay USD 21.62 (5,437.51 - 5,415.89) on banking fees.

That's a USD 165.26 saving! Simply by paying through another bank.

I'd recommend to give Wise.com a try. It's free to signup. There are no recurring fees. You will then be able to transfer any amount in USD from your own bank to Wise.

For USD 9, you can get a Wise credit+debit card. Again, no monthly fees. The card allows you to pay online, in-store and you can also withdraw cash with it. We haven't had an issue with our card so far, so we cancelled our "regular" credit card.

To save more money, use this link to signup with them: wise.com/invite/u/arnop3. You'll reach a page that says "Arnoldus (that's me) has given you a fee-free transfer of up to 500 EUR". Because of this link, your first payment in a foreign currency will be free. This works up to EUR 500 or the equivalent in your currency. If you spend more, the additional amount will be charged with their normal (low) fee.

So, you save most by using this perk for a bigger payment, like a Swiss Travel Pass or hotel booking. It's a good opportunity to try Wise. You can now pay in Swiss francs (CHF) and pay no or very little banking fees! Of course this is just an example. It works for any foreign purchase.

More details:

One more thing: in-store payment terminals and online shops often offer you to make a payment in your home currency, e.g. USD. It may seem like you avoid a foreign currency transaction fee, but that's not true. The amount in USD will mostly be very high, because a conversion will be done in the background by the bank of the seller. So this is again a pretty expensive way to pay, and one we always avoid.

Signup with Wise to try for free: wise.com/invite/u/arnop3

Happy travels!

Arno

Last modified on Mar 31, 2022 - 7:08 AM by Annika
GeoffD
GeoffD
16 posts
new member
Apr 1, 2022 - 12:36 AM in reply to Arno

Hmm, I had a look at reviews and the reactions vary significantly. I sense there may be better options but not sure which at this point

Arno
Arno
15564 posts
expert &
moderator
Apr 1, 2022 - 10:53 AM

Hi GeoffD,

My recommendation is based on our own 2 year experience. I did look into several option back then, but did not try out the others. I'm sure there are people with mixed experiences. All I can say is that it saved us a lot of banking fees compared to before, Wise is easy to work with, and easy to simply stop using if you don't like them after all. This thread may interest you: www.myswissalps.com/forum/topic/best-place-to-exchange-usd-into-swiss-francs.

Feel free to let us know your experience once you've tried Wise or another one.

Last modified on Aug 10, 2022 - 2:35 PM by Arno
Rogerpeth
Rogerpeth
10 posts
new member
Apr 2, 2022 - 1:37 PM in reply to Arno

Hi. I don’t know if this will help anyone but I have two UK credit cards. JaJa and Halifax Clarity. At the moment both offer commission free foreign exchange (although I suspect it hides behind the exchange rate somewhere). In both cases make sure as Arno says you pay in the currency of the country you are in i.e. CHF in Switzerland and never in your home currency for both purchases and Cash Withdrawals invariably the best exchange rates are via Visa or Mastercard. The others are at least 3% on top of this in my experience and sometimes more. Also The Halifax Clarity card allows you to draw cash from an ATM under the same conditions BUT you need to pay this off the SAME DAY so you not pay the instant daily interest charges on Cash withdrawals (But who uses cash now anyway? )I always use this card for Cash ONLY & the other card for purchases. If you only use one card you will not necessarily pay off the cash withdrawals if there are purchases already on it as it pays off the oldest transactions first. it has worked well for me for several years. Hope this helps. Roger Petherbridge. PS Back to Switzerland in May and June. Hooray.

Arno
Arno
15564 posts
expert &
moderator
Apr 3, 2022 - 6:12 AM in reply to Rogerpeth

Thanks for sharing your tips Roger. Enjoy Switzerland!

Last modified on Apr 3, 2022 - 6:13 AM by Arno
andrew
andrew
128 posts
active member
Apr 5, 2022 - 9:34 PM in reply to Arno

I agree very much with Roger Petherbridge about Halifax’s Clarity credit card if you're based in the UK. We’ve used it for several years when in Switzerland. There is no commission and the exchange rate is always good. For some time It i has been recommended by a very well-known UK based money advice website. The UK Consumer Association (Which?) also recommends the Clarity card.

Barclaycard has recently brought out Barclaycard Rewards credit card which is similar to Halifax Clarity but pays a 0.25% cashback. I have no experience of its exchange rates but I’m led to believe they are good.

I also agree with Arno’s advice that, when purchasing with a credit card, always pay in the local currency. The exchange rate is better than your home currency and commission fees are zero when making purchases with the two credit cards I’ve mentioned.

Andrew

Anna
Anna
3675 posts
expert &
moderator
Apr 5, 2022 - 9:44 PM in reply to andrew

Hi Andrew,

Thanks for sharing this information. I guess it's always worth checking with your current bank if you can use your credit cards 'freely' during any trips abroad.

Regards,

Anna

Cigarshaped
Cigarshaped
5 posts
new member
Apr 20, 2022 - 8:49 AM in reply to Arno

If we already have a bunch of Euros, I heard they are accepted currency in Switzerland?

CCP

Ildiko
Ildiko
2333 posts
top member &
moderator
Apr 20, 2022 - 9:27 AM in reply to Cigarshaped

Hi CCP,

the official currency is the Swiss Francs, not the EUR: www.myswissalps.com/swissfranc.

You can pay with euros in many shops, hotels, rail stations and gas stations in Switzerland. This is convenient if you're only in transit or only stay for one night. Many smaller shops, market stalls, kiosks, etc. only allow payment in Swiss francs.

Ildiko

Sgileski
Sgileski
6 posts
new member
Apr 20, 2022 - 5:32 PM

Coming from the U.S., CapitalOne Visa does not charge currency exchange fees. Also, the advice on not charging in US dollars as opposed to Swiss francs at time of charge is good advice!

Ildiko
Ildiko
2333 posts
top member &
moderator
Apr 20, 2022 - 5:48 PM in reply to Sgileski

Hi Sgileski,

thank you for your tip regarding the bank card.

Have a wonderful trip,

Ildiko

Angielee396
Angielee396
14 posts
new member
Apr 23, 2022 - 1:08 PM in reply to Sgileski

Hi. Do you get a choice of currency when you make a purchase? I’ve never seen that.

Sgileski
Sgileski
6 posts
new member
Apr 23, 2022 - 1:11 PM in reply to Angielee396

You do in Switzerland. Always go for the Swiss francs choice!

andrew
andrew
128 posts
active member
Apr 23, 2022 - 1:23 PM in reply to Angielee396

The card device will offer you a choice of Swiss Francs, the currency of your card and sometimes Euros. The choices are usually numbered and you merely select Swiss francs using the keypad and then continue as normal.

Andrew

Rogerpeth
Rogerpeth
10 posts
new member
Apr 23, 2022 - 7:16 PM in reply to andrew

Further to the above and for Angielee396

All European and many other countries now do this and some are quite sneaky in making your “home “ currency the first one on the list of options. All the advice given here is the right advice. Always pay in the currency of the country you are in. I even had a hire car deposit switched in Poland to Euros without my consent despite the bill being in Polish zloty. Fortunately the deposit was never needed

Be aware and beware 😄

Anna
Anna
3675 posts
expert &
moderator
Apr 23, 2022 - 7:29 PM in reply to Rogerpeth

Hi Rogerpeth,

Thanks for the reminder.

Regards,

Anna

Tkoch78
Tkoch78
7 posts
new member
May 12, 2022 - 4:07 AM

I just opened my Wise debit card account, to use on my trip to Germany and Switzerland starting May 7, 2022. However, after I paid the $9 USD for the standard card, the Wise website said I wouldn't receive my card for until May 24, and that US account holders had to activate the debit card before leaving the USA. Finally, Wise does not give residents of the US and several other countries the option to expedite that delivery for a fee.

I went with Plan B to instead open a Capital One 360 checking account that includes a contactless debit card that charges no foreign transaction fees. Yes, the Capital One credit cards also features zero foreign transaction fees, but it treats any ATM withdrawals as cash advances with incur around 24% in interest charges. Check the credit card fee schedule for how cash advances are treated.

If this was any of help to you, please feel encouraged to send me $9 USD!

Tkoch78
Tkoch78
7 posts
new member
May 12, 2022 - 4:10 AM in reply to Tkoch78

Typo in my post: my trip starts on May 19 - 5 days before my Wise Debit Card arrives at my USA home address!

Arno
Arno
15564 posts
expert &
moderator
May 12, 2022 - 2:04 PM

Hi Tkoch78,

That's very unfortunate! Their website does say it takes up to 9 business days once shipped, so the delivery time you mentioned is about right: https://wise.com/help/articles/2975581/what-do-i-need-to-do-to-get-my-wise-card-in-the-us. Well, it's not very quick indeed but apparently that's their timeframe.

I recall when I ordered my card that it was delivered much quicker than promised, so hopefully you're as lucky. If not, the card might be useful for a next trip too. By the way, the card should be made available in the Wise app even before the physical card has been delivered. That means that you can already make online payments with it: book your hotel, travel passes, etc. But you need the physical card for in-store transactions and to withdraw cash from an ATM.

Enjoy your trip!

Last modified on May 13, 2022 - 9:23 AM by Arno
robinl
robinl
13 posts
new member
May 25, 2022 - 9:35 PM

Do most places in Swiss take credit vs. cash? Are there instances where cash is the only form of payment?

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