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The Best 2024 Credit Card Strategy: No Fees and Maximum Returns

Baptiste Wicht | Updated: |

(Disclosure: Some of the links below may be affiliate links)

Credit Cards are an important part of your personal finances. They are tools that you need to use to your advantage.

The problem is that it is easy to misuse credit cards. You need to have a good credit card strategy to take full advantage of credit cards.

Since I have started improving my personal finances, I optimized my usage of credit cards. I have reduced the annual fee of my credit cards to zero, and I have now reduced all my credit card fees to zero! That’s right. I do not pay any fee using credit cards, even for foreign currencies. My credit card strategy is much better than before since I did not realize I was paying too much at that time!

In addition, I have also improved the cashback I get for each of my purchases. Now, I get up to 1% cashback on my purchases! On the other hand, I had to go from one single card to three credit cards to optimize my fees and cashback. Unfortunately, there is no free lunch.

In this article, I share my entire credit card strategy. If you want to save on fees and improve your cashback, this will help you! Indeed, if you are willing to go the extra mile, you can save money and generate some small income with credit cards.

Credit card strategy

When I choose a credit card, I want two things:

  • minimizing the fees
  • maximizing the returns (the cashback or bonus).

Contrary to what most people think, there are plenty of free credit cards in Switzerland. Unfortunately, most people still pay for their credit cards. And there should be free credit cards in most countries. And some of these credit cards have nice cashback. Sometimes, they even have higher cashback than paid cards.

It is essential to choose a free credit card. For instance, if your card costs you 100 CHF per year and has 0.5% of cashback, you would need to spend 20’000 CHF per year to get even. Most people do not spend that much on their credit cards! A free card with 0.2% cashback would have given you back 40 CHF instead of 0 CHF! Unless you spend a lot on your credit cards, and you probably should not, you should always opt for a free credit card.

The annual fee is not the only thing that needs to be minimized. Most cards charge a very high fee on currency exchange, for instance! This foreign fee needs to be taken care of as well! And withdrawals from a credit card are also almost always expensive.

The second thing you want with your credit cards is the highest cashback possible.

In Switzerland, the cashback is pretty bad. But in some countries, you can find cashback of several percentage points. First, you want some real cash as a bonus. If the cash is only usable in some shop you never go to; you do not want it. Ideally, it is real cashback going toward your credit card bills. Or it could be cashback in a shop that you often go to.

Many people will say you should avoid credit cards for good finances. However, this is a personal finance myth. If you use them properly, they can be a good tool.

The best credit card strategy

Now that we know the goals, we can move on to my actual credit card strategy.

1. Domestic Purchases- Certo One Credit Card

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The Certo One credit is a great credit card. This card has 1% cash back, but only in three shops. Other shops have 0.33% cash back. It is real cashback, removed from your bill.

I have configured three shops as based on my shopping history. I currently use Lidl, Galaxus and Landi. I am sometimes changing the last one, because we do not have a third shop that is very much used. However, most of our groceries are done in Lidl and most of our online shopping is done at Galaxus. So, a significant portion of our expenses have 1% cashback.

If you want more details, I have an entire article about the Certo credit card.

2. Foreign currency fees

In the previous section, I focused on domestic purchases in Swiss Francs.

Now, I also make many purchases in other currencies and countries, as do many people in Switzerland. About 30% of my credit card bills are paid in foreign currencies. For this, I need to use another card with minimum currency exchange fees, and this extra card is an essential part of any credit card strategy.

All credit cards available in Switzerland charge a substantial fee for purchases in foreign currencies. Sometimes, they are also charging based on the country, not only the currency. For instance, my credit card charges a fee for everything abroad, even if it is in Swiss Francs.

Eliminating foreign currency exchange fees is definitely what will save you the most in your credit strategy. Compared to my base card, I save 2.5% on each international purchase! It is much more than the cashback I get on my domestic purchases.

3. International Purchases – Neon

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If you are often paying with your card in another country, you could consider using Neon for this. Neon is a free Swiss digital bank. And they offer free purchases abroad with their MasterCard.

Using Neon over your other cards could save you a lot of money! Most people do not realize they pay a large fee when they purchase in another currency.

The downside of Neon here is that it is a debit card. In most cases, it will work just fine. But there are a few cases where it will be refused. Renting a car and reserving hotels often require a credit card. It is because they make a reservation for the money instead of taking the money out. And this is not possible with debit cards. One way around it is to require to pay in advance, in which case debit cards should be fine. But this is not always possible.

When this is not possible, you will have to use either the American Express or the Mastercard. It will not be free, but this will work.

For more information, I have made an entire review of the Neon Bank.

What could be better?

I am quite happy with my current credit card strategy, and it is getting better and better. But there are always things that I could improve.

If you want to optimize cashback, you can introduce an extra credit card to your strategy: the Swisscard American Express. This card 1% cashback on every shop. The issue with this card is that American Express cards are not well accepted in Switzeralnd. This means that if you use this card, you still need a secondary card for when Amex is not accepted.

In the past, I was using these two cards. But to simply my strategy, I decided to only keep the Certo and the Neon card. However, you could make it better by using both. It is up to you to choose between cashback and simplicity.

Do you have any idea how to improve my credit card strategy?

The simplest credit card strategy

Now, some of you may wonder whether we could make things simple. Many people do not want to carry three cards with them. And I completely understand that.

The simplest credit card strategy would be with fewer cards. In this case, you have to sacrifice some cashback. However, unless you spend a lot with your credit cards, this is probably not a huge deal for your finances.

If you want the simplest credit card strategy, you have a few choices.

  1. If you ever buy something in foreign currency, you need a card with free foreign exchange. In this case, go with Neon. It will be entirely free, and you will be able to use it in Switzerland, abroad, and online. If you do not need a real credit card (for hotels, cards, …), you can simply use Neon.
  2. If you need a credit card and never buy anything in foreign currency, you can simply use the Certo Mastercard. It is free, and you can earn cash back. This card is well accepted in Switzerland.
  3. If you need a credit card and pay in foreign currency, you will have to go with both Neon and the Certo Mastercard. But you would generally only need to carry one: Neon for foreign currencies and Certo for rentals and domestic purchases.

The simplest credit card strategy is quite good. The important part is to save money on the fees. The cashback is a little bonus, but it is only a tiny optimization.

7 Tips for credit cards

Credit Cards are powerful tools for managing personal finances. However, they may be dangerous if not used correctly.

It is the reason why some people think that we should not use credit cards. If you feel you cannot control your use of credit cards, you may be better off without them. But if we use them well, they can help you a little towards Financial Independence.

1. Do not carry Credit Card Debt

First and foremost, you should never carry a balance on your credit card.

Just after borrowing money from a loan shark, this is the worst kind of debt you can have! This kind of debt has at least 10% interest and can go as high as 20% interest. This fee is a lot of money you will lose if you start having credit card debt!

2. Do not withdraw money with your Credit Card

Also, you should never withdraw cash with your credit card.

Most Swiss credit cards have high fees for cash withdrawals. However, withdrawing money is not what credit cards are about. For instance, the Amex from Swisscard has a 3.95% fee on withdrawal with a minimum of 5 CHF. Of course, if you are in an emergency and this is the only thing you can do, it is not so bad to pay this interest. However, you should be careful to use it only in case of an actual emergency!

3. Always use the correct card

You also need to make sure you are using the correct card for the correct thing.

In my current credit card strategy, I am using three credit cards. For each of my purchases, be it in a store or online, I have to think about which card I should use. Choosing the correct card is important because a 2.5% fee on foreign currency purchases will entirely remove all the bonuses with your credit card.

4. Be careful of hidden fees

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All the cards I am using are free. However, that does not mean that everything is free with those cards. I already mentioned interest on credit card debt and withdrawal fees. But a lot of credit cards have other services that are paid.

For instance, all free credit cards allow you to pay if you want a paper statement. Some credit cards, however, require you to pay if you need to call them. Thus, you have to be extra careful about what you do with the card.

5. Do not let cashback blind you

There is also one subtle thing about cashback that you need to be aware of. Sometimes, people use the excuse of cashback to buy more expensive things.

For instance, between my Amex and my Certo MasterCard reward program, I get 2% cash back when I shop at Migros. However, many things are more expensive there. Overall, it is estimated that grocery shopping at Migros is at least 40% more expensive than at Lidl. Compared to that, the extra 1% cashback bonus is negligible. Cashback should only be considered a bonus for shopping for cheap things.

You should never buy something because it will give you some extra income. If you lose 100 CHF and make 1 CHF back, you will still have lost 99 CHF! You are much better off with your 100 CHF!

6. Keep your credit cards safe

You should consider your credit cards as sensitive material.

Always be careful when you type your PIN. If you suspect something is not safe, do not use your credit card! And if you think someone got your PIN, change it immediately or block the card! If you lose the card, you should immediately report it as stolen to make it blocked!

7. Credit Cards companies are not your friends

Overall, you need to understand that these credit card companies are in for the money!

They are not offering free cards just because they are nice! Most people make many mistakes with their credit cards, and credit card companies exploit these people! Do not make mistakes with your credit cards, and you will have a powerful tool in your wallet!

Conclusion

An optimized credit card strategy consists of reducing the fees to zero and maximizing the cashback from purchases. To achieve these goals, I need three different cards:

With this credit card strategy, I never pay any fee and have a 1% cashback with my Amex and 0.33% with my MasterCard.

If you are used to United States credit cards, you may wonder why I did not talk about travel hacking. In fact, in Switzerland, travel hacking with credit cards is bad. There are a few options from Swiss and Miles, for instance. However, their bonus is not very interesting, and their credit cards are not even free! These cards may be good if you spend a lot of money. However, that is not the point of this blog spending a lot of money.

Finally, do not forget that credit cards are powerful tools if used correctly. If you are not using them correctly, they can be very dangerous to your personal finances. You need to never carry a balance on your credit card. If you carry a balance, you are much better off with no credit card!

And if you want to keep it simple, it is also possible. Remember only to use free cards, which will minimize foreign exchange fees.

Finally, all this is about optimization. Just having the best credit cards will not make a huge difference in your way to financial independence, for instance. It is good to do it. But there are things you can do to save money that will matter more.

What is your credit card strategy? Do you have any tips to share?

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Download this e-book and optimize your finances and save money by using the best financial services available in Switzerland!

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Photo of Baptiste Wicht

Baptiste Wicht started thepoorswiss.com in 2017. He realized that he was falling into the trap of lifestyle inflation. He decided to cut his expenses and increase his income. This blog is relating his story and findings. Since 2019, he has been saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

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175 thoughts on “The Best 2024 Credit Card Strategy: No Fees and Maximum Returns”

  1. Hi Baptiste,
    Would Yuh be a decent alternative to Neon? or Revolut? I have it since almost their beginning but didn’t thought about maximizing things, more for convenience. Therefore I am thinking whether I should keep it or change it.
    Thanks and have a nice day.

  2. Hi Baptist

    I would now always choose radicant over neon for foreign purchases:

    0% surcharge to the interbank exchange rate vs 0.40% for neon (has been approved in the meantime).

    Also you get the 1.25% interest in the regular account for up to CHF 250k, while in neon you need to put it into the (slow executing) spaces for only 0.75% up to 25k and 0.5% over 25k.

    Furthermore radicant is much more stable than neon, doesn‘t have this regular login problems.

    Also you plant trees and even more of them than in neon without paying extra, while neon green costs you CHF 4.50 per month.

    Only the investing part would be better in neon if one would not like to use IBKR.

    What do you think?

    1. Hi Claudio

      To be honest, I don’t truly trust the 0% surcharge of radicant and the only analysis I have seen is theirs (obviously not independent). And even in their comparison, they are only 0.2% cheaper than neon, which is probably not significant. They also only report one data point for each bank, which is more than limited.
      But yes, if that is true, you could save a little money over neon.

      As for the interset rate, it’s indeed higher, but for how long? I only keep 10k in cash and honestly don’t care about the interest rate I can get on that.

      I am also a little concerned about radicant future since it was said to be costing 30M per year and generating less than 1M. If BLKB gets tired of hemorrhaging money, they may discontinue it.

      But overall, radicant does have many interesting selling points.

    2. Dear Claudio, Thank you for bringing up Radicant. For info BLKB, used to be Swissquote mortgage partner. Swissquote changed partner 6 years ago. Since the change, I renewed my mortgage twice staying with BLKB. This is because Swissquote new partner, Lucerner Kantonalbank, was unable to offer me a better deal. My mortgate has been will BLKB for the last 10 years. I am pleased with them. They are professional, transparent, and easy to communicate with. As I am retiring soon and taking into consideration that the stock markets are high, I keep liquidity in CHF. The 1.25% interest on CHF offered by Radicant is an appealing offer even if it changes later. With kind regards. Gilles

  3. I don’t use the Certo Mastercard, but the following system:
    1. priority Swisscard AMEX
    2. priority Swisscard VISA or MASTERCARD (0.25% Cashback)
    3. for FX: Neon

    This has the advantage, that I only get one invoice from Swisscard (they put together both cards) directly into E-Bill. I lose though 0.08% Cashback, but that’s worth it for me since this is a very low amount.

    Best
    Markus

    1. Hi Markus

      Thanks for sharing your strategy!

      The 0.08% you miss is the loss when you use the second card, right? In that case, it’s not entirely correct. For instance, with Certo, I can get 1% at Lidl, but you would only get 0.25%.
      Depending on your usage, you may lose more than that. It all depends on how many shops you use that accept Cashback and how well you can configure the Certo to suits your 3 main shops.

      But I completely agree that keeping it simple is important!

  4. Great article!
    How do you top-up the credit card balance every month?
    Is it possible to automate it by submitting a direct debit or every month you manually make a bank transfer according to the credit card bill?

    1. Hi Thomas

      I pay the balance in full with bank transfer, manually. You could do direct debit but I strongly dislike this system, but most credit cards will accept that.
      Some credit cards have e-bills (unfortunately not Certo).

      1. Thank you for the reply.
        I’m wondering about why are you against LSV (direct debit)?
        It makes life easier, saves time and there is no chance that I forget to make the monthly manual transfer to the credit card.

      2. I don’t like it because it makes changing for another credit card complicated: you have to make sure the previous credit card issuer does not have the LSV permission anymore and you need to setup the system for the new company.
        I also don’t like the absence of control over it. It’s easy to forget about it, which is not a good idea for finances (in my opinion, but many people disagree).

  5. For abroad use i own a free DKB Visa Card and an bank account there i use for all my € payings (and others).
    You have to transfer 700€ per month to be free of charge. I use this as my travel savings and when its not used i use the money to buy € shares in the portfolio they offer. So i have a free Eurokonto and creditcard to roam around outside Switzerland.

      1. Of course not for everyone.
        I use € a lot and did it before the Revolut/Neon companies showed up on the market / my awareness. And it still works well.
        So for me its well worth and the portfolio is small and makes no work (for me an invest and forget portfolio type).

  6. Have you tried the Migros Cumulus credit card? There is no “extra charge” for paying in another currency and you got points on the cumulus card when you use it.

      1. Hi Baptiste,

        Thanks a lot for sharing that again. It is interesting to read. I mostly use this card to book car rentals abroad etc. so it seems to make sense for now but I also use Wise/Revolut when I am travelling. Keep up the good work, your blog is very interesting!

        Dan

      2. As you said, this card still makes sense when you can’t use something better (Neon/Wise/Revolut) because they only accept credit cards. But I really wish banks would start to be honest.

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