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We are traveling to Switzerland (mostly Zurich and closeby) for several days later this year and, one of our friends told us to bring Swiss Francs with us as things would be generally cheaper if we pay with Francs as opposed to paying with Euros. Our home currency is U.S. dollars.

Is this actually true?

(keeping it broad intentionally, but please let me know if any additional details are needed)

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    What is your ‘home’ currency? The Swiss Franc is the only official currency in Switzerland and the only currency accepted everywhere. You can pay with Euros in many places but if Euros are not your home currency you’ll effectively be paying conversion costs twice. – Traveller Dec 9 '19 at 23:18
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    A bit like in the US, using US dollars is cheaper than using Euros. – DaG Dec 10 '19 at 9:04
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    Don't take for granted that they will accept Euros, many places won't. Once I tried to pay for a beer with Euros and couldn't. And they didn't accept credit cards either, so I had to go to an ATM. – Gelu Dec 10 '19 at 10:49
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    Note that the average price level in Switzerland is way higher than in Germany or Austria, prepare to pay extraordinary amounts in restaurants and supermarkets. For example one liter milk in Germany is around 0,65 Euro, while approx. 1,65 Euro in Switzerland. – UZi Dec 10 '19 at 15:25
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    @Fattie, you probably haven't been to border regions of Switzerland very much. Euros are accepted in many places. Definitely not universally, and you shouldn't count on it, but most definitely a LOT more than the number of places in the USA that accept Euros. As stated in answers below, this usually isn't a good deal, but it can be helpful. Note that it is also very, very common for ATMs in Switzerland to be able to dispense Euros as well as Swiss Francs, so it goes both ways. – jcaron Dec 11 '19 at 16:58
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The currency of Switzerland is obviously the Swiss Franc, not the Euro. Many businesses accept euros, but:

  • not all do
  • to make sure they're covered against fluctuations of the exchange rate, they will add a "spread" on the exchange rate in their favour, sometimes quite extreme. For instance, even though 1 EUR is about 1.10 CHF at this time, they may very well apply 1 EUR = 1 CHF for simplicity
  • in most cases, change will be given in Swiss Francs.

Not that this does not mean you need to buy Swiss Francs before arriving or that you need to exchange Euros for Swiss Francs. Withdrawing Swiss Francs at an ATM in Switzerland will often be the cheapest option (though you should check the charges of your card issuer in terms of exchange rate spread and for foreign transactions).

Likewise, you can pay for many things directly with a credit card or debit card with a balance in Euros (or any other currency). Your card issuer will convert the currency automatically, and if your card has low fees, this will often be even cheaper.

As pointed out by IMSoP in the comments, if when paying by card the retailer (or rather the terminal) suggests to perform the currency conversion for you (this is called DCC – Dynamic Currency Conversion), you usually will want to refuse, as the rate applied is generally much worse than what you can get from your bank.

But again: check the fees for your credit or debit cards before you leave. They're the key to making the right decisions (which may involve getting a new card with better fees!).

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    In the last sentence, did you mean "pay ... with a credit card or debit card in Swiss Francs"? Applying "Dynamic Currency Conversion" (where the retailer converts the price and charges you in your own currency) generally gives you a significantly worse rate than being charged in the local currency and letting your card issuer apply the conversion. – IMSoP Dec 10 '19 at 9:31
  • I meant that the card itself (or the linked account) is in Euros. I'll clarify, DCC is indeed generally something you want to avoid. – jcaron Dec 10 '19 at 9:42
  • @jcaron Maybe you want to edit your answer to clarify, because I also first interpreted it as IMSoP. Reading it again after seeing your comment, I understand what you meant though. – jkej Dec 10 '19 at 9:47
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    I've edited the answer, hopefully this is clearer now. Let me know if it isn't. – jcaron Dec 10 '19 at 9:51
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    @Fattie They can be used in many places. The closer to the border and the more susceptible the business is to having EU customers, the higher the chances this happens. I don't remember about Zurich, but IIRC even in Lausanne ticket vending machines for public transport accepted euros. But as stated, many people don't, and when they do, it's usually by far not the best choice. – jcaron Dec 11 '19 at 16:54
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It is always less expensive to use a country's own currency when in that country. Merchants lose money on conversion fees when they accept payment in foreign currency, and they typically cover that by using a less favorable exchange rate to figure the foreign-currency price than you will find in the banking system.

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    Zimbabwe might have been an exception to this at some times. So you say it's always less expensive as long as the the country's own currency is stable and trusted by the population. – phk Dec 10 '19 at 10:34
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    -1 for "always". I was in Switzerland right after the "Leave" vote in the UK's EU referendum. This impacted the Euro so badly against the Swiss Franc that based on posted exchange rates for a brief period of a day or two it was actually cheaper to pay in Euros in some shops. – Muzer Dec 10 '19 at 11:07
  • No, it is not always cheaper to use the local currency. This is especially the case for countries that have an inflated but rigidly enforced "official" exchange rate. In these places it is often more economical to pay in foreign currency, since some merchants will give a better (black-market) conversion rate. – Psychonaut Dec 10 '19 at 15:36
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    Another counterexample for "always": some countries try to enforce official exchange rates for their currency that differ from that currency's market value, e.g., en.wikipedia.org/wiki/…. In such contexts, buying the local currency officially to use it in the country gives you a bad exchange rate, whereas paying (e.g.) in USD can give you a better rate as the shop owner can then exchange the USDs to the local currency at the black market rate that you do not have access to. – a3nm Dec 11 '19 at 9:13
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    While the "always" in this answer clearly isn't true, I think it's safe to say that the Swiss trust their franc more than they trust any other currency in the world. – Kyralessa Dec 19 '19 at 14:18
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Yes, it's cheaper, the exchange rate is not favourable for the client. If you go shopping for currency upfront, you can find a better deal for exchanging whatever you need and you'll paying a one time fee, instead of a fee in every payment.

It's also more convenient. Small businesses won't necessarily accept euros, and they have no obligation to do it. Hotel chains and department stores will probably accept them, shops near the borders probably too. Notice that you will get the change in Swiss Franc anyway.

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    "Shops near the border" - note that most shops in Switzerland are not that far from a border with a country using the Euro. Basel and Geneva are actually on the border, Zurich is only 20 miles away. Lucerne is probably furthest of the large towns, and it's only 40 miles from Germany. – Martin Bonner supports Monica Dec 10 '19 at 14:32
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Absolutely. Every time you exchange money, with anyone, anywhere, anytime, they are going to charge you for the privilege. In my experience, banks give the best exchange rates, especially YOUR bank (if you just use a random ATM, your bank will make the exchange). "Exchange" kiosks are all over the place. The ones in London airport are particularly egregious, last I went. Local businesses that don't specialize in exchange may be willing to do the exchange for free to get your business, or they may not, or they may simply refuse to do the exchange. One thing is for sure, though: They will not give you a better deal in the exchange. Ultimately, it's at their discretion, though, and since they're going to the bank to exchange your Euros later, and they have to pay the exchange fee, I would definitely anticipate that 99% of the time they would at least pass that on to you.

Protip: Most exchanges post a buy rate and a sell rate. (buy_rate - sell_rate)/sell_rate is a good metric for how hard you're being fleeced in the exchange. 0 is a free exchange. 0.1 (is about a 5% exchange rate) is probably the best you'll get anywhere. Some places in "tourist traps" will be up to like 25%.

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    The "usual" bank spread is around 3%, so 5% may be the best you'd change at a foreign exchange kiosk, but you can do much better. There are cards that have no spread at all. – jcaron Dec 10 '19 at 16:53
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    @jcaron I was gettin these numbers from memory. I'm inclined to believe you if you say 3% is more likely. You'll need an account or a membership or a whatever to get a 0% spread somewhere. I know some credit cards offer such a deal. – Scott Dec 10 '19 at 17:51
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The answers so far provide you some good insight as to why you might want to prefer cash CHF vs cash EUR. Allow me to add my view on avoiding this altogether.

If you are only travelling temporary and you use cash, they you always have some loss as you can'd budget to the nearest centime. You'll end up leaving with some cash CHF which you cannot use elsewhere and you'll probably keep it as "souvenirs".

I suggest that you take into account using a multi-currency card, like TransferWise*. This way you can keep an amount of USD in your account and the conversion is made every time you pay with it in CHF, at the mid-market rate. This way, you avoid converting too much or too little, and, more importantly, you avoid the unfair conversion rate of the shops and banks**.

As noted by a comment, most credit cards work this way. However, with the credit card of your bank, the conversion is done by them, at a rate that's advantageous for the bank, plus some non-negligible fee. With multi-currency cards, the conversion is done at the mid-market rate and the fee is very small. For even cheaper option, you can foresee a bit how much you will spend and "transform" some money on your card just once, thus your card effectively holding 2 currencies and using the best one for each payment. More details here: https://transferwise.com/gb/borderless/

So if you use a credit card card, the problem can be avoided altogether. And if it is multi-currency, it can be significantly cheaper than your standard bank.

* I am not affiliated in any way, I just like their product.

**Some shops, like the post office, do not accept credit cards, only maestro debit cards

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    Please remember that people going for a short break in Switzerland may well live just across the border in a country using euros so US dollars in an account may not be the case. – Willeke Dec 12 '19 at 9:06
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    Most (not all!) credit cards operate that way, not just special ones like TransferWise. They allow you to hit the card in any currency (let your bank know you're traveling to avoid fraud flags!) and convert it at the time of the transaction, usually at decent rates compared to alternatives. – WBT Dec 12 '19 at 19:55
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    @WBT that's true ! The decent part is debatable, depends on your bank. I edited to add this – Ciprian Tomoiagă Dec 13 '19 at 9:05

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