A credit card is an unsecured revolving line of credit that you can use to make purchases and pay bills. The three major credit card networks used in New Zealand are Visa, Mastercard and American Express. Visa and Mastercard are issued by banks and financial institutions, and American Express issues its own cards.
Based on your perceived ability to make repayments, you are assigned a credit limit, which is the maximum amount of money you can use on your credit card. Some cards have higher limits than others, but also require a higher income.
Unlike a debit card that uses your own money to make purchases, when you use a credit card, it is the lender who pays the retailer. At the end of your billing cycle (once a month), you receive a statement that tells you the total amount you owe for that period. You can either pay the balance off in full or pay an amount that is equal to or greater than the minimum payment due. The bank or financial institution makes money on fees and the interest that accrues on your revolving credit.
Credit card issuers have been offering increasingly shiny rewards, signup bonuses, and travel perks to lure new customers. This can be very helpful if you pay your bills on time and in full. If you don’t you might offset any rewards gained by paying more in fees and interest.
Like with personal loans and mortgages, banks have certain criteria that you must meet to be eligible for a credit card.
At a minimum, you should:
The amount of income that you need to be earning differs between financial institutions and also depends on which card you are applying for. Cards with higher credit limits and more benefits tend to have a higher income requirement. For example, the American Express Platinum Edge requires a minimum income of $50,000, compared to the BNZ Lite Visa which only requires an annual income of at least $15,000.
If you are temporarily in New Zealand for work or study, or you’ve just moved here, you may be eligible for a credit card. Banks like ANZ and ASB have dedicated migrant banking teams that can help get you set up with the financial products you need.
There are different types of credit cards available, and each has specific features and benefits designed to suit a variety of needs. When you know what you want from a credit card, you can narrow down your comparison to a few cards. To help you do this, we have outlined the major credit card categories below:
If you have an existing credit card debt, a balance transfer credit card can help you save on interest charges and pay off your debt faster by offering you a promotional low or interest rate for an introductory period. In most cases, after the promotional period has ended, any debt remaining from the transfer attracts a higher, standard interest rate. Promotional periods can be anywhere from 6 to 24 months. Westpac is currently the only bank to offer a reduced rate for the life of the balance transfer.
When considering a balance transfer card, keep the following in mind:
A rewards card can be a worthwhile way to get something back from your spending. Whether you’re a frequent flyer, loyal customer or big grocery spender, you can find a rewards credit card to suit almost any lifestyle. If you want to earn rewards for your credit card spending, pay attention to the type of rewards program available. Some credit cards have their own rewards programs, such as the BNZ Advantage Visa Platinum. Others are linked to existing programs, such as the ANZ Airpoints Visa Credit Card.
Keep in mind the following points when considering a rewards credit card:
Some rewards credit cards are linked to the Airpoints frequent flyer programme. You can earn Airpoints Dollars while you spend, and depending on the card, you may also enjoy other travel benefits such as complimentary insurance, flights or airport lounge access. As with other rewards credit cards, when you’re looking for the best Airpoints cards, you need to look at the number of points you earn per $1 spent, the card fees and any complimentary extras to make sure it is worth it for you.
Credit cards often come with promotional features for new customers that are designed to add upfront value to the card you choose. Some of the most popular introductory offers include:
What should you keep in mind when comparing introductory offers?
If you are comparing credit cards with introductory offers, make sure you check the ongoing features to get a true sense of the value the card will provide in the long term.
Also look at the length of the introductory period and any other conditions you need to meet to claim the offer available. For example, a reward card offering bonus points might require you to spend a certain amount of money in the first few months you have it, while a balance transfer offer might only be available if you include your transfer request when you apply.
Low interest credit cards are designed to save you money on your balance by offering a competitive rate of interest. Some of these cards may offer a promotional low or interest rate for purchases, while others offer a low ongoing interest rate. If you regularly carry a balance on your credit card, a low rate option could save you hundreds or even thousands of dollars in interest every year.
To see how much value a low rate card offers, let’s compare a $1,000 debt on a credit card with an interest rate of 18% p.a. and a card with a lower rate of 12% p.a. If you only paid the minimum, it would take 7 years and 9 months to pay off the 18% p.a. card and would cost $861 in interest. With the low rate card, it would take 5 years and 10 months and cost $393 in interest – that’s a saving of 1 year and 11 months and $468 in interest charges.
Business credit cards offer specific features designed to make financial management easier across a company, such as additional credit cards for employees, individual pre-set spending limits and accounting tools. If you are comparing business credit cards, make sure to consider which extra features you need (including rewards programs) as well as the interest rates and fees.
You can use almost any credit card when travelling but some cards come with specialised features and benefits to help you save you money on every trip. Depending on the card you choose, perks could include complimentary overseas travel insurance, car hire coverage, Airpoints, hotel offers, airport lounge access and no foreign transaction fees.
To compare travel credit cards, consider how often you will actually use these features as well as the ongoing card costs, so that you can find one that offers value for money and covers your travel needs. If you are keen to take advantage of free travel insurance, check what the requirements are. You may need to pay for half or all of your travel bookings on your card before you are eligible.
Gold, platinum and black credit cards are premium options designed for bigger spenders. They have higher credit limits and additional benefits that come in handy both at home and abroad. You can usually earn rewards faster than with a standard card, but you can also expect to pay a higher annual fee.
Travel and entertainment perks can add value to the card you choose. Some of the most popular benefits include:
If you are considering a gold, platinum or black card, keep the following points in mind:
It is important to check the minimum income requirements when comparing gold, platinum and black credit cards, as they are often higher than standard cards. Also, make sure you consider whether the benefits available outweigh the cost of interest charges and annual fees – both of which may be higher on a premium card.
Travel and entertainment perks that come with these cards can add up to hundreds, or even thousands, of dollars of extra value, but only if you use them. When you are looking at the complimentary extras during your credit card comparison, be realistic about whether or not you will get value from these features so they offset the cost of any fees.
A no annual fee card doesn’t charge a yearly fee. Some cards have this as an ongoing deal; others will waive the standard fee for the first year of using the card.
Consider the following before applying for a card with no annual fee:
Click on the links below to find out more and learn which cards you can apply for:
When you compare credit cards, the rates and fees will help you work out the overall cost of each option. Here are the key features to look at:
Credit card annual fees can range from $0 (The ASB Visa Light) to up to $390 for prestige cards (Westpac Airpoints World Mastercard). This fee is usually charged when you first activate your account, then once a year on the anniversary of your account activation.
When you are comparing cards, think about what features will offset the cost of the annual fee so you can find one that is affordable for you. Remember some credit cards only offer a $0 or lower annual fee in the first year, so check the long-term features of the cards you compare to avoid any nasty surprises after the first year.
This is the interest rate that is charged for most of the transactions you make using your credit card. Standard purchase rates range from around 9.95% p.a. to 21% p.a. (variable) depending on the card you choose. If you regularly pay your balance in full, the purchase rate may not be of major concern, but if you think will carry a balance then choosing a card with a lower interest rate will help keep the cost down.
If you pay your balance in full each month, you can usually receive a certain number of interest-free days on purchases during each statement period. Major banks usually offer 44 or 55 days on new purchases.
If you plan to pay off the balance in full for every statement cycle, the number of interest-free days available could be an important factor for your credit card comparison. However, remember this feature won’t be much use if you carry a balance.
This interest rate is applied to cash advance transactions, which include ATM withdrawals, foreign currency exchange, bets and other gambling charges. It is usually around 19.95% p.a. to 22.95% p.a. and applies from the time you make a cash advance transaction. While it is a good idea to avoid making cash advances with a credit card, it is important to consider this factor in your comparison so that you know what the potential costs will be for these types of transactions.
As well as applying interest to cash advance transactions, you may be charged a one-off fee on cash withdrawals. This is usually around 2% to 3.5% of the total transaction cost. As with the cash advance interest rate, it is a good idea to check this fee when comparing cards so you are aware of the cost of cash advances for any option you choose.
Most credit cards apply a fee for transactions made in a foreign currency or with an overseas merchant. This fee usually adds 2% to 3.5% to an international transaction and is indicated on your bank statement as an ‘offshore service margin’. If you plan to travel with a credit card or want to use one to shop online with overseas retailers, it is a good idea to look at cards that waive this cost or at least have a lower fee than other options you are considering.
Credit card issuers charge you a fee if you don’t make the minimum payment by the due date on your statement. There is no standard rate for this in New Zealand, with late fees ranging from $2 to $20 across major banks. While you should always aim to pay your credit card off by the due date, checking this fee when you are comparing credit cards can give you an idea of how each option treats late payments and you may want to factor this into your final decision.
If you max out your credit card, you could be charged a fee of around $3 to $20. It is important to consider this cost when comparing different cards so that you know what penalties could apply for different options. It may also help you decide on a sensible credit limit when you apply.
You may incur other fees including:
Yes, it’s definitely possible to have more than one credit card if you meet the lending criteria. Some people like to have different credit card types to take advantage of different features.
However, don’t forget that credit cards are listed on your credit report and having too many could mean that it’s harder to take out other forms of credit. It can also be tempting to spend more than you can really afford and end up in mountains of debt.
In New Zealand, Visa, Mastercard and American Express are the major credit card networks used. So what is the difference?
Visa and Mastercard credit cards are issued by banks. In the past, some banks offered both options, but now stick with one or the other. Westpac is currently the only bank to issue Mastercard, with the other major banks sticking to Visa.
For the average user, Visa and Mastercard are both widely accepted around the world and get the job done. There are some subtle differences which we explored in our guide to Visa vs Mastercard.
On the other hand, American Express hasn’t been as widely accepted, but this is improving. Cards are issued by American Express itself, so there are no physical branches to visit.
Each credit card network offers its own benefits to cardholders, but perks tend to be reserved for those with a platinum, black and gold card.
While applying for a credit card doesn’t have to be complicated, it can come with certain risks.
Is there a credit card in New Zealand that has no annual fee and no foreign transaction fees?
Hi Jay,
Thanks for your inquiry. At the moment, we don’t have a comparison page for credit cards with zero foreign transaction fees, but we have a guide how this card works instead. Please refer to this page. As to the credit card with no annual fee, please check the one we featured on this page and see if this suits your needs.
Cheers,
May
Hi there
I am looking for GE credit card within next few days … is that possible? Cause I need to use it to buy some items from Harvey normal before end of December which the price unbeatable for that items
Thanks a lot
Sameh
Hi Sameh,
Thanks for your inquiry
Actually, you have come to the right page to find options for credit cards in NZ. If you specifically want a GE credit card, you may directly contact the card lender to apply. Please note that you need meet some eligibility requirements to be approved.
Hope this information helps
Cheers,
Arnold
Hello, I am trying to get a job in New Zealand.. I’m looking into credit cards before I leave. I will be paying off any debt I have on the card I have currently of course. I was hoping you could help me find something like the capital one platinum card in the U.S
I have a little credit.. I only started a year ago though. And I’m looking for something with no annual fee
Hi Meghan,
Thank you for your inquiry.
Upon checking on our website, there is no information about a platinum card that doesn’t require annual fees.
But we do have a page for no annual fee credit cards, You may want to compare your options on the link address here: https://www.finder.com/nz/credit-cards/no-annual-fee-credit-cards#apply.
I recommend that it is best to contact your chosen credit card provider to discuss with them your eligibility and options.
I hope this helps.
Cheers,
Asia