Why “Credit”?

Credit cards allow you to pay without cash at cash registers, hotels and on the Internet. Payments aren’t deducted straight from your account but are billed to you every month – you buy “on credit” and pay later. Unlike debit cards, credit cards are not linked to a bank account. For a fee you can also withdraw cash from an ATM using your credit card.

Ideally you would settle the credit card bill in full every month. But if money’s a bit tight you can pay off the bill in several installments, if the credit card issuer allows this. This will make the bill a bit more expensive because you also have to pay interest.

Credit Card Companies

MasterCard, Visa and American Express are leading, well-known credit card companies. They mostly issue credit cards through a bank. American Express also issues credit cards directly.

Types of Credit Card

Credit cards fall into various categories. Here’s an overview:

Standard, Gold and Platinum Cards, and Co-Branded Cards

Gold and platinum cards generally have a higher monthly credit limit than standard cards, and they offer more additional services (bonus schemes, concierge services, insurance). Because of this, their annual fees are higher. With co-branded cards, the image on the card is that of a business partner, for example Migros’s M…MasterCard.

Use

Many credit cards can be used worldwide for shopping and withdrawing cash.

Reward Schemes

Some credit cards offer bonus schemes, for example Migros's
M… MasterCard, Coop’s SUPERCARD and Miles&More by Lufthansa/Swiss.

Customer Cards

Customer cards work a bit like credit cards, but can only be used for purchases in particular shops. An example of this is the PlusCard issued by Globus.