If you are currently paying an annual fee on your credit card, CHANGE YOUR CARD TODAY.
There is no reason to be paying fees on an NZ credit card.
Read on...
Why Credit Cards?
Credit cards can be useful personal finance tools if used right:
- Earn rewards or cashback on your spending
- Don't need to pay cash for purchases right away
- Keep your cash in your bank account longer (usually 50-60 days)
- Online purchases
- Perks such as free travel insurance or Airpoints
However, credit cards are destructive if you are not properly educated on how to use them.
They allow you to spend money you don't have, which can land put you in a bad financial situation if you are not adept at managing your finances.
The #1 rule for credit cards is you should never be paying interest on a credit card.
The guide below is written under the assumption that you will pay your credit card in full every month and on time.
If you cannot commit to doing this, close this article immediately.
I suggest applying for a zero-fee debit card instead.
If you're confident you can use a credit card wisely, then there are easy ways to ensure you get the full benefit of them without ever paying a credit card fee.
Read on ...
Zero Fee Credit Cards
If you live in New Zealand, there is no reason to be paying bank fees.
Banking is very generous in New Zealand from a retail banking perspective.
Due to property mania in New Zealand and Australia, banks make most of their money on business banking and mortgages.
Therefore, they don't need to rely on monthly bank fees and account fees to make money.
Almost all banks offer bank accounts with zero fees.
I haven't paid a single bank fee in years, and I have six bank accounts.
Credit cards are no different.
If you are going to use a credit card, make sure you start with one that doesn't have an annual fee.
There are exceptions - for some people using a "premium" credit card with a fee can make sense if the rewards they earn exceeds the fee they are paying.
For example, if you pay $200/year for a card, but you earn $500 in Airpoints each year on your spending and get free travel insurance for all your trips, then a platinum card makes sense.
However, for most people starting with a free card is the best option.
Which Banks Offer Zero-Fee Credit Cards?
American Express Airpoints
The American Express Airpoints card is the only credit card in New Zealand with $0 annual fee that offers rewards.
For every $100 you spend, you will earn $1 in Airpoints, which is a 1% earn rate.
For a free card, this is very good!
Even the Airpoints cards from the banks (that have annual fees) don't give rates as good.
The American Express Airpoints card also gives you a $50 Airpoints Signup Bonus, meaning you get $50 in Airpoints dollars just for applying for the card!
(You will also need to spend $750 on the card over the first 3 months. New members only).
The one issue with American Express is many smaller businesses in New Zealand don't accept it.
This is because American Express charges merchants a higher fee that Visa and Mastercard.
However, it can be used almost everywhere when shopping online, and at all major stores like supermarkets and gas stations.
Despite slightly lower usability, this is easily the most generous free credit card available in New Zealand today.
The great thing about free credit cards is you can have multiple, as they cost nothing to keep.
Therefore you can get yourself an AMEX Airpoints and use it wherever possible to get the 1% return on your spending.
Then you can get one of the other cards on this list to use where the AMEX is not accepted.
SBS Visa Cashback Card
The SBS Visa is the only free cashback credit card in New Zealand.
Cashback are the best rewards in my opinion because it rewards your spending with cold hard cash.
You can think of the card as giving you a discount on every single thing you buy.
The current cashback rate for the SBS Visa is $1 for every $150 spent.
That means if you spend $1,500 per month, you'll get back $10.
That might not sound like much, but think about it this way: You are literally BEING PAID $10/month TO USE THE CARD.
Instead of paying an annual fee for the card, you're receiving a monthly payment.
It is a far superior option to a regular credit card.
The interest rate is quite high, but this is irrelevant as you should be paying off the card in full every month.
Along with the Amex Airpoints card, these two cards make the perfect tag team.
You can purchase everything where credit cards are accepted, and you will earn something back on every single thing you buy.
ASB Visa Light
The ASB Visa Light is a basic VISA card with no annual fee.
ASB in general has pretty average perks on its platinum cards: its reward rate is 1% which is exactly the same as the free AMEX Airpoints card mentioned above.
Therefore if you are already an ASB customer and on a different credit card, I highly recommend downgrading to the Visa Light unless you are making huge savings on their travel insurance perk.
One "perk" the VISA Light does have is Smart Rate, which offers no interest for six months on purchases over $1,000.
Technically you could purchase a car for $5,000 and not have to actually pay for it for six months, which is pretty useful.
It also offers Google Pay, Apple Pay, Fitbit Pay and Garmin Pay.
Kiwibank Zero Visa
The Kiwibank Zero Visa is a very basic Visa credit card.
There is no annual fee.
It offers a low interest rate, but other than that it has no special perks or features.
Good as a basic free card if you're a Kiwibank customer.
ANZ Low Rate Visa
The ANZ Low Rate Visa is a very basic Visa credit card.
There is no annual fee.
It offers a low interest rate, but other than that it has no special perks or features.
Good as a basic free card if you're an ANZ customer.
Stop Paying Bank Fees!
Cleaning up your banking is one of the easiest ways to save some money and put your finances onto the right track.
There is no reason to be paying bank fees in New Zealand on regular banking services.
If you're currently paying an annual fee on a credit card, and are not using it specifically for a perk that's making you money, call up and close the card TODAY and move to a zero-fee card.