Life has at least two certainties – bank fees and tax…… both of which are disliked. Bank fees can be minimised but unfortunately New Zealand’s local tax on purchases can’t be (sorry!).
We’ve put together a few options and suggestions below relating to money matters when travelling to New Zealand.
Purchase some cash in your destination currency (NZ$ in this instance) before leaving home. Only NZ currency is accepted in New Zealand. Notes are used for denominations $5 and above. Coins range from 10 cents to $2.
Don’t leave it until you get to the airport to get cash as the exchange rate and fees offered at airport kiosks are not as good as those offered at banks, and generally even international cash machines offer better exchange rates than airport kiosks.
ATMs – Automated Teller Machines
ATMs are readily available throughout New Zealand, although limited in variety in smaller rural towns. There shouldn’t be a problem accessing cash withdrawals when required.
Fees world-wide for using ATMs are typically:
- Service margin fee – fee charged for withdrawing foreign currency, usually between 1 – 2%
- Overseas ATM fee – fee charged for using an ATM outside your banking network, usually between NZ$5 - NZ$10
- Local ATM fee – a fee charged by a local bank for using an ATM when you’re not a member of their network
These fees can add up quickly if you make many small withdrawals.
Check with your bank prior to leaving your home country as to which ‘partner’ banks offer ATM cash withdrawals without charging the international transaction fee. Currently in New Zealand the only member of this alliance is Westpac.
A New Zealander travelling overseas can expect to pay a fee in the region of $8 every time they withdraw cash from an overseas ATM. If they have a Westpac electronic account and use an ATM belonging to a member of the Global ATM Alliance they won’t be charged this fee. Other fees will still apply though, such as the foreign currency conversion fee.
If you are travelling to NZ and currently bank with:
- BNP Paribas Group
- Deutsche Bank
- Barclays Bank
- Bank of America, or
- Banca Nazionale del Lavoro
They are all part of this Global ATM Alliance so double-check with your bank that the international transaction fee will be waived if you use a Westpac ATM in NZ (Westpac ATMs can be found in all major NZ cities and many smaller towns).
A debit card is linked to your electronic transaction account and withdraws funds from your account for the purchase. They can generally be used like a credit card. Two things to be aware of:
- there may be a delay between making the purchase and the money being debited from your account so just keep a track of purchases so you don’t overdraw your account
- they may not be accepted for “holds” on funds, such as for car hire or at hotel check-in, so you may like to have a credit card as a back-up.
On no account try to purchase Traveller’s cheques – these are so last century and will ruin your credibility and cool persona faster than having a cellphone the size of a brick.
Consider a Travel Card instead - a Travel Card is a prepaid card, which can be topped us as required from your electronic account. It can be used like a credit card, online, over the phone or for ATM withdrawals.
Do a comparison of fees before selecting a Travel Card to ensure you get one that is right for you. Some have a fee for purchasing a card, loading a card, monthly fees, fees for ATM use, an inactivity fee, and even fees for cancelling a card.
One of the great advantages of a Travel Card is that some allow you to preload different currencies onto the card so you can make purchases and ATM withdrawals in those currencies without paying a foreign exchange fee. Keep an eye on the exchange rate and preload the card prior to travel when the exchange rate is good.
Cards are generally valid for two years before expiring. To avoid the inactivity fee which some providers may charge, just use the card occasionally when back home, and then let the card expire instead of paying a cancellation fee. Any credit remaining will be refunded.
Most New Zealand businesses accept all major credit cards, except for American Express which is not readily accepted everywhere. If your main card is American Express it’s recommended you bring a Visa or Mastercard as another option ‘just in case’.
Try and find a credit card which doesn’t charge foreign transaction fees. If you’re a ‘kiwi’ travelling overseas then you’re out of luck; no New Zealand bank offers a credit card with zero fees for processing transactions in a foreign currency. Some have lower fees than others but you need to weigh up the annual fee against the transaction fees and decide what works best for you.
Best not to make an overseas cash advance withdrawal using your credit card as the fees and interest will soon mount up.
And lastly – ensure you let your bank know which country you are traveling to so they don’t ‘freeze’ your card on suspicion of fraud. Awkward….
Some simple suggestions to keep fees to a minimum:
- Get an electronic account with a bank which is a member of the Global ATM Alliance, preferably an account which doesn’t charge monthly or transaction fees. Use your EFTPOS or debit card at a Westpac ATM in New Zealand and spend the money you just saved on fees on buying another coffee…
- Withdraw larger amounts of cash from foreign ATMs to avoid fees adding up for each small withdrawal
- Load a prepaid Travel Card in the currency of the country you are traveling to at a time when the exchange rate is good.
New Zealander’s travelling overseas may find this blog on How to Avoid Bank Fees and Access Money While Travelling to be helpful.
Another certainty in life: Tax (or as one form of it is known in NZ) - GST
A Goods & Services Tax of 15% is charged on all goods and services purchased within New Zealand, but this tax isn’t refunded to tourists as they leave the country. Once you’ve paid GST you can’t get it back.
To buy goods tax and GST free in New Zealand before you fly out, it must be through a registered tax and GST free retailer, and you can’t take possession of the goods while you are still within New Zealand. The items you buy must be collected from the airport on the day you depart from New Zealand.
Goods can be picked up at the airport’s Collection Point, which is located after security and which handles this service for local retailers.
Only a few retailers in NZ are signed up to this scheme, because of the inconvenience of couriering purchased goods to the airport or alternatively posting to the traveller’s home address, so it’s very unlikely you will come across one that offers such a service.
In Auckland participating shops display the Auckland Airport logo, so travellers can tell who will be able to provide tax free shopping. All international airports in New Zealand do offer tax free shopping.
So, don’t worry about keeping your receipts for items purchased in NZ in the hope a GST refund is offered at the airport!