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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.
Each type of 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 options. To help you compare credit cards, we have outlined the most common types below:
Getting a bit overwhelmed with all the options out there? We totally get it. But picking a credit card that’s right for you is easy once you narrow down your choices. Follow these easy steps if you find yourself getting lost or overwhelmed.
While applying for a credit card doesn’t have to be complicated, it is not guaranteed that you will be approved even if you meet the basic lending criteria. Before moving forward, work through our list of application tips to have the best chance of being accepted.
We asked more than 1,100 Kiwis to assess their credit card provider against a number of factors to discover which brand has the most satisfied customers.
Find out which credit cards brands came out on top in the Finder Credit Card Awards 2021.
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 the majority of perks tend to be reserved for those with a platinum, black and gold card.
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 Airpoints Platinum Card requires a minimum income of $65,000, 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.
If you have bad credit, there are still credit card options to consider.
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 when you start to compare credit cards:
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.
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.
Sally McMullen is Finder's credit cards and frequent flyer editor by day and a music maven by night. She's also one half of the Pocket Money podcast. Her byline can be spotted on Yahoo Finance, Dynamic Business, Financy and Mamamia as well as Music Feeds and Rolling Stone. Sally has a first-class Honours degree in Communications and Media Studies (majoring in Journalism and Professional Writing) from the University of Wollongong.
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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