A credit card differs from a debit card in that the merchant is paid by the card issuer, not from your bank account directly. You then settle with the issuer either in full (a 'transactor') or partially (a 'revolver'). Pay in full each month and the card is essentially a free 30–55-day interest-free loan, plus cashback or miles. Revolve a balance and the typical rate of 12–20% APR makes it the most expensive routine debt in personal finance.
Beyond payments, credit cards bundle valuable services: chargeback rights (you can dispute a purchase up to 120 days later), travel insurance, purchase protection, extended warranties, airport-lounge access and rewards programs. Some Swiss premium cards also include a Priority Pass membership and global medical assistance — features worth more than the annual fee for frequent travellers.
The single most important rule is: never carry a balance. If you cannot pay the full statement balance every month, the card is being used as financing, and you would almost certainly be better off with a personal loan at half the rate. Set up an automatic direct debit for 'pay full balance' to make this discipline mechanical.
A traveller spends CHF 1,200 on a flight with a Swisscard cashback card. The statement closes on the 15th, payment is due on the 5th of the next month, and 1% cashback returns CHF 12. Paid in full, the cost is zero and effectively earns CHF 12. Carried at 14.5% APR for 6 months, the same CHF 1,200 costs about CHF 51 in interest.