Schnatz has a certain German ring and look to it, while Snitch looks and sounds English. I'd pefer Schnatz, but then I don't think I get a say in the matter, I don't read the books.
As far as I'm aware the word does have a meaning in German, it was made up for Harry Potter. It seems to be derived from Schatz (treasure), but only the translators could tell.

Somebody here reading both English and German version? How's the translation otherwise?