Credit Card FAQ

Credit cards in New Zealand allow you to borrow money up to a preset limit to make purchases. You receive a monthly statement showing your balance and minimum payment due. If you pay the full balance by the due date, you avoid interest charges during the interest-free period (typically 44-55 days). If you carry a balance, interest is charged at the card's annual percentage rate (APR).

A credit card lets you borrow money from the bank up to your credit limit, which you must pay back with interest if not paid in full. A debit card directly accesses your own money from your bank account. Credit cards offer rewards, purchase protection, and help build credit history, while debit cards don't charge interest since you're using your own funds.

A credit limit is the maximum amount you can borrow on your credit card. New Zealand banks determine your limit based on your income, existing debts, credit history, employment stability, and spending patterns. Limits typically range from $1,000 to $50,000+. You can request limit increases after demonstrating responsible usage.

Exceeding your credit limit may result in over-limit fees (typically $20-40), declined transactions, or temporary account suspension. Some cards automatically decline transactions that would exceed the limit, while others may allow small overages. Repeatedly exceeding limits can negatively impact your credit score and future borrowing ability.

To apply for a credit card in New Zealand, you typically need: NZ residency or citizenship, minimum age of 18, proof of income (payslips, tax returns), identification (driver's license or passport), bank account details, and employment information. Some cards require minimum income thresholds ($25,000-50,000+ annually).

Credit card approval in New Zealand typically takes 1-7 business days for online applications. Instant approval is sometimes available for existing bank customers with good credit. Complex applications or those requiring income verification may take up to 2 weeks. Card delivery usually takes an additional 5-10 business days.

New Zealand doesn't use traditional credit scores like the US. Instead, banks assess your credit history through credit reports from agencies like Centrix, illion, or Equifax. A clean credit history with no defaults, bankruptcies, or late payments generally ensures approval. First-time applicants or those with limited credit history may start with lower limits or secured cards.

Getting a credit card with bad credit in New Zealand is challenging but possible. Options include secured credit cards (requiring a cash deposit), cards from smaller lenders, or becoming an authorized user on someone else's account. Focus on rebuilding credit through responsible use of a basic card before applying for premium options.

Credit card applications may be declined due to: insufficient income, too much existing debt, poor credit history, recent credit inquiries, unstable employment, incorrect information on the application, or not meeting the card's specific criteria. You can request feedback from the bank and improve your situation before reapplying.

Credit card interest in New Zealand is calculated daily on your outstanding balance and charged monthly. Interest rates (APR) typically range from 12.95% to 25.95% annually. Interest is only charged if you don't pay your full balance by the due date. The interest-free period (44-55 days) applies to new purchases when you pay your balance in full each month.

The interest-free period is the time between making a purchase and when interest starts accruing, typically 44-55 days in New Zealand. This only applies when you pay your full statement balance by the due date. If you carry any balance from the previous month, new purchases usually start accruing interest immediately.

Common credit card fees in New Zealand include: annual fees ($0-600+), late payment fees ($15-45), overlimit fees ($20-40), cash advance fees (3-4% or $5 minimum), foreign exchange fees (1.5-2.95%), and balance transfer fees (1-3% or $35 minimum). Premium cards typically have higher annual fees but more benefits.

Yes, many New Zealand banks offer no annual fee credit cards, particularly basic cards without rewards programs. These include ANZ's basic Visa, ASB's Classic cards, and BNZ's standard options. No-fee cards typically offer lower rewards rates and fewer benefits compared to premium cards with annual fees.

Cash advances are when you withdraw cash using your credit card at ATMs or banks. Fees typically include a percentage (3-4%) plus a fixed fee ($5+), and interest starts immediately with no interest-free period. Avoid by using your debit card for cash withdrawals or ensuring you have sufficient funds in your transaction account.

Credit card rewards in New Zealand typically earn points, cashback, or airline miles based on your spending. Common structures include: cashback (0.5-2% of spending returned as cash), points programs (1-2 points per dollar spent), or Airpoints (1 point per $75-100 spent). Rewards are usually credited monthly and can be redeemed through online portals or statements.

The best rewards program depends on your spending habits and preferences. Airpoints cards (1 point per $75-100) offer excellent value for travelers at ~2.5c per point. Cashback programs (0.5-2%) provide simple, guaranteed value. Points programs offer flexibility but require careful redemption to maximize value. Consider your annual spending and redemption preferences.

Reward expiration varies by program in New Zealand. Air New Zealand Airpoints expire after 4 years of no earning activity. Many cashback programs don't expire as long as your account is active. Bank points programs typically expire after 2-4 years of inactivity. Check your specific program's terms and set reminders for redemption or earning activity.

Premium credit cards in New Zealand often include: comprehensive travel insurance (medical, trip cancellation, lost luggage), airport lounge access, travel concierge services, no foreign exchange fees, purchase protection while traveling, and rental car insurance. Benefits vary significantly between cards, so compare coverage limits and exclusions.

Credit card rewards for personal use are generally not considered taxable income in New Zealand. However, business credit card rewards may be treated as fringe benefits and subject to FBT (Fringe Benefit Tax). If you use a personal card for business expenses and claim the rewards, consult an accountant for tax implications.

A balance transfer moves existing credit card debt from one card to another, typically to take advantage of a lower interest rate or promotional 0% period. The new card pays off your old debt, and you owe the new bank instead. Balance transfer offers in New Zealand typically include 0% periods of 6-12 months, helping you save on interest while paying down debt.

Most New Zealand banks charge balance transfer fees, typically 1-3% of the transferred amount (minimum $35-50). Some promotional offers waive these fees. Factor the fee into your savings calculation - a 2% transfer fee on a 6-month 0% offer can still save money compared to paying 20%+ interest on your existing balance.

Balance transfer promotional periods in New Zealand typically last 6-12 months at 0% interest. After the promotional period, the rate reverts to the card's standard purchase rate (15-25%). Some cards offer longer promotional periods or reduced rates (like 3.95% for 24 months) rather than 0%.

After the promotional period ends, any remaining balance is charged at the card's standard interest rate. Plan to pay off the transferred amount during the promotional period to maximize savings. If you can't pay it off entirely, consider transferring to another promotional offer, but be aware this may impact your credit applications.

Yes, you can typically make purchases on balance transfer cards, but be careful. New purchases may be charged at different rates and might not have interest-free periods if you're carrying a transferred balance. It's usually best to focus on paying off the transferred balance during the promotional period and avoid new spending.

New Zealand credit cards include multiple fraud protections: chip and PIN technology, contactless payment limits, 24/7 fraud monitoring, SMS/email alerts for transactions, zero liability for unauthorized transactions, and the ability to temporarily freeze cards through mobile apps. Banks must investigate fraud claims and typically resolve them within 10 business days.

If your credit card is stolen: immediately contact your bank's 24/7 fraud hotline to cancel the card, report the theft to police if part of a broader crime, review recent statements for unauthorized transactions, request a new card with different numbers, and update automatic payments with new card details once received.

Under New Zealand law, you're generally not liable for unauthorized credit card transactions if you report them promptly and haven't been negligent (like sharing your PIN). Banks typically provide zero liability protection. You may be liable for up to $150 if you've been negligent with your card security, but most banks waive this in practice.

To dispute a credit card charge in New Zealand: contact the merchant first to resolve the issue, if unsuccessful, call your bank's dispute line within 120 days of the transaction, provide documentation (receipts, communications), and complete a dispute form. The bank will investigate and provide provisional credit while resolving the dispute.

Contactless payments use Near Field Communication (NFC) technology to process transactions by tapping your card on a payment terminal. In New Zealand, contactless payments are limited to $200 per transaction for security. They're very secure due to tokenization (your actual card number isn't transmitted) and encryption of transaction data.

Responsible credit card use includes: paying your full balance by the due date to avoid interest, keeping utilization below 30% of your limit, making payments on time, monitoring statements for errors or fraud, not taking cash advances unless necessary, and only charging what you can afford to pay off. This builds positive credit history and maximizes benefits.

The minimum payment is typically 2-3% of your outstanding balance or $10-25 (whichever is greater). While paying only the minimum keeps your account in good standing, it results in significant interest charges and extended debt repayment. Always aim to pay the full balance to avoid interest and pay down debt quickly.

To increase your credit limit in New Zealand: demonstrate responsible usage for 6+ months, maintain good payment history, show increased income, request through online banking or phone, or wait for automatic increases offered by the bank. Avoid requesting increases too frequently, as this may indicate financial stress to lenders.

Generally, keep old credit cards open if they have no annual fee, as they contribute to your credit history length and available credit. Close cards with annual fees you're not using, but consider the impact on your credit utilization ratio. Closing your oldest card can reduce your credit history length, which may impact future credit applications.

To switch credit cards: research new options and apply for your preferred card, once approved, transfer any balance if beneficial, update automatic payments and direct debits to the new card, pay off and close your old card, and ensure all recurring charges are moved to the new card. Consider timing to maximize sign-up bonuses.