Avios or KLM Flying Blue Miles credit card in CH? And does it even make sense?

Life Hacking
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Hi Forum,

The end of the year brings the usual set of considerations on how to optimize the new one ahead and I’m hoping to get some food for thought on this subject.

Let me just start by saying that I am aware owning a credit card is not a very Mustachian thing to do, which is why I renounced mine a few years ago and never looked back.

In 2022 however, after getting back into some extra-EU travelling, I realized that, in certain situations, it may be worth the hassle of owning a piece of plastic that shows you’re ‘worth of credit’. I’m thinking in particular medical emergencies in places where I wouldn’t be able to foot the bill with a Maestro debit card.

That said, and considering that my biggest non-essential expenditure item at the moment is travel (around 4-5K this year), I’m seriously considering applying for a card that would get me some extra travel benefits.

The only one I could find is the Flying Blue (KLM/Air France program) Mastercard from Viseca (Flying Blue), which earns 1 mile per 2 CHF spent. Pretty expensive however at CHF230/year.

So question #1 would be: does anybody know of any other cards for CH residents that let you earn either Avios or FB miles?

A probably more important question, however, is whether this makes sense at all and how do I calculate that. Current miles valuation (as reliable as they can be) are around 1.2 to 1.4 cents/USD a mile. In other words, earning 5000 miles/year = between 60 to 70 USD worth of miles back. In the case of the KLM/AF above it would not be enough to justify the annual fee.

Thus, question #2: is this even worth considering or would I just be better off with a free credit card like Cumulus or the Amex/MC Swisscard combo?

Finally, there’s an extra element that makes this all more complicated: I tend to book my flights departing from outside Switzerland (France or Italy). The high savings compared to flying out of Geneva or Zurich more than justify the extra train ticket + time spent.

This means though that I always book flights in EUR, i.e. foreign currency processing fee. The KLM/AF card above for instance has a 1.75% fee, while the Swisscard Amex/MC a hefty 2.5% fee. That’s expensive! Especially considering my Wise debit card has no foreign transaction fees. But granted, it’s not credit.

So, question #3: what would be the best credit card for purchases in foreign currency?

Apologies for the long post, just trying to do my homework and hopefully the thread will be useful for anyone that is in a similar situation.

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Ad 1 - there used to be a Cornercard CC combo with Diners :face_vomiting: earning something ridiculously low as 1 Avios for 2CHF spend. Horrible rate. Currently, I don’t think so anything for KLM/AF nor Avios, for CHF expenses.

Ad 2 - Not really worth in Switzerland, the CC offers are all horrible. Only thing comes close is Miles&More from LH Group, issued by Swisscard. MC/Visa and Amex combo, Gold makes sense. But its 220CHF/year for 1mile/1CHF with 2.5K/year given. With a good bonus (20k bonus comes often) its ok, as Senator you get it for free anyway (gold, FTL benefits are laughable, platin card is overpriced). The M&M card makes sense if you spend in the program and have high CHF expenses. Otherwise, if you dont spend 30K++ CHF pear, not worth otherwise for low spenders. Other programs, nothing. Far better off with cashback cards giving 1% on the free Amex. I’m sure frugal people will come up with their own penny pinching schemes, but overall the Cashback cards for CHF spend are best.

Ad 3) For non-CHF spend, forget about it. Forex fees and rates kill any benefits. Dont use CHF card for any non-CHF spend, ever. Just use one of the Zaks/Neons if you are their customer and you read the fine print. Personally, I use Transferwise debit card for most non-CHF transactions. For places truly requiring a credit card, use a CHF-CC to guarantee and pay with EUR-debit.
If its EUR spend, you can consider ways to get some the european CC (DE, BE, FR, NL) in the respective countries. I have a german card with 100Eur limit, which is fine since I just pre-load hours before use. But make sure, any foreign bank and CC account is correctly maintained as a Swiss resident and foreigner at the issuing bank, you dont want to be considered tax domiciled in Germany or any other EU country.

At some point I had 8 or 9 swiss cards and it made sense with meticulous planning and on-time cancelation. But unless you have larger expenses that you can place on the card, its not worth the hassle. The typical 1-2K/month household bill doesnt make sense. For Avios right now, if you plan to spend in next few months on a good offer, better to buy the miles outright with the subscription, which is around 1.23c/miles atm direct from BA. I consider KLM/AF program terrible, personally, unless you truly fly a lot with them (I never do, OW/*A only)

TL;dr: Switzerland is in stone ages when it comes to CC benefits. Use swiss cards for CHF spend, some card with good exchange rate and without fee for non-CHF and ignore benefits. Sadly.

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My point of view is more or less the opposite. Countries with great CC benefits (e.g. US) simply have excessive credit card fees (for the vendor but in the end the customer pays everything anyway). I prefer reasonable credit card fees and not having to chase CC benefit programs.

I definitely don’t like the excessive foreign exchange / international fees of most Swiss credit cards, though.

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Why so? It is having a credit card debt and paying interest for it is terrible for your finances. Having a credit card and earning cashback is excellent.

No.

Yes (for expenses in Switzerland).

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Only when you spend „more“. That is, more than you want or need.

They can otherwise be a great budgeting tool and some of them - unlike debit cards - provide additional perks like bonus programs or insurance.

As for the rest, I @UACcorp pretty much sums it up above: You’re probably not flying (or spending with airlines) nearly enough to make the annual and FX fees worth it.

…though not really on foreign currency purchases or purchases abroad, when compared to an inexpensive debit card (Revolut, Wise, Neon…).

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PS:
Depending on the volume of your „essential“ purchases that can be paid with a payment card (and you did not state how much that is), it may be worth to put all your everyday spending in Switzerland on a card - and then use the points/miles accumulated on your credit card for offers from your airline. Especially if their bonus program has special offers that yield more than the normal value of a mile.

The thing is: as far as I‘m aware, these bonus programs are often designed to offer you great deals on what’s nice-to-have rather than what you need or want anyway.

I.e., they’ll often entice you into booking a flight or an upgrade that you wouldn’t otherwise have booked. Which…