What is a credit card?
Learn more about the advantages and features of credit cards here.
Everything you need to know at a glance
A credit card is a cashless means of payment that allows you to make payments worldwide – for example, in stores, online, for hotel reservations, or for rental cars – without the amount being immediately debited from your bank account. Instead, you are given a credit limit, and the transactions you make are accumulated and typically billed once a month.
In Switzerland, so-called charge cards are common – including those from American Express – where the outstanding balance is collected in a single amount at the end of the month, usually interest-free. Unlike a debit card, a credit card thus offers more financial flexibility and, depending on the card type, additional advantages such as insurance, bonus programs, or exclusive travel perks.
Credit card: definition and basic principles
A credit card is a payment card that allows you to pay for purchases or services without using cash, without the amount being immediately deducted from your account. Instead, the issuing institution provides you with a credit limit. The amounts paid are typically debited from your bank account once a month.
These credit cards are known as charge cards and are generally what people in Switzerland mean when they refer to a "credit card". American Express Cards also fall into this category.
In contrast, there are also so-called revolving credit cards, which allow a portion of the balance to be carried over to the following month, usually for an interest charge. The Gold Card is the only American Express Card that offers this installment facility.
How a credit card works: a step-by-step guide
The way a credit card works is easy to explain:
- You pay with your credit card, either in-store or securely online via SafeKey®.
- The card issuer – for example, American Express – immediately settles the payment with the merchant.
- All transactions for the month are aggregated in your credit card account.
- At the end of the month, you receive a statement detailing all your expenses.
- The total amount is automatically debited from your designated bank account.
What’s the difference from a debit card?
When paying with debit cards – which are widely used in Switzerland (formerly often referred to as EC cards, now known as Maestro or Debit Mastercard, for example) – the amounts are immediately debited from your bank account. There is no payment deferral and no credit limit.
A credit card, on the other hand, offers deferred payment and, depending on the type of card, additional benefits such as insurance, dining perks, car rental perks, bonus programs, and free access to airport lounges – like the American Express Platinum Card.
Advantages of a credit card at a glance
Generally, free credit cards offer fewer additional benefits than premium cards, which come with an annual fee. Important to know: Depending on your lifestyle and your card use, this annual fee can pay for itself faster than you might think through the included benefits.
The advantages of a credit card include:
Credit cards are accepted in nearly every country and by countless online retailers. Credit cards are especially indispensable when traveling – when booking hotels and rental cars, for example.
Credit cards are significantly safer to use than cash. With American Express, for example, you benefit from comprehensive buyer protection: If you’ve been the victim of fraud or if an item arrived damaged, you can dispute the transaction and get your money back.
Many credit card companies reward every purchase with points, miles or cashback. With American Express, you collect Membership Rewards points with every payment, which you can redeem for travel, shopping vouchers, or other rewards.
American Express premium cards include comprehensive travel insurance, including Travel Cancellation Insurance, trip accident insurance, and liability insurance for rental cars.
The American Express Gold Card and Platinum Card include Priority Pass membership, which gives you access to airport lounges worldwide. You can also take advantage of the convenient Concierge Service.
Modern credit cards support contactless payments via NFC as well as integration with digital wallets such as Apple Pay or Google Pay. This allows you to pay quickly, hygienically and securely. You can also add your card as a means of payment on PayPal.
Which American Express card best fits your lifestyle?
Make your travel and everyday life more enjoyable with a credit card
A credit card gives you financial flexibility and a secure means of payment that’s accepted at many acceptance points in Switzerland and around the world. Premium cards such as the American Express Gold Card or Platinum Card also offer a range of benefits that add significant value to your daily life and travels.
Frequently asked questions and answers
A credit card is a payment card that allows you to pay for purchases immediately without the money being deducted from your bank account right away. Instead, the amounts are tallied and billed in a single statement. In Switzerland, so-called charge cards are common, where the entire amount is charged at once – usually at the end of the month – and interest-free.
No. With a debit card (formerly often referred to as an EC card), amounts are debited from your account immediately; there is no payment deferral. A credit card, on the other hand, offers a credit limit, along with benefits such as insurance or bonus programs – depending on the card type – that debit cards generally do not provide.
For most people, a credit card is well worth it. They are a safer means of payment than cash, are accepted worldwide, and offer useful travel insurance and attractive bonus programs. If you pay your monthly balance on time and in full, you can enjoy all the benefits without incurring interest charges. Credit cards are practically indispensable today, especially when traveling and with online shopping.
