This article is a part of my travel tips series for New Zealand travellers. If you're not from NZ, this post won't apply to you. You can see the rest of the Kiwi traveller guides by clicking here.
As a New Zealander, trying to find the best travel cards and banking options has been a frustrating affair. Why? There's just not that much to choose from.
Banks in larger countries are faced with higher competition and are forced to give their customers bundles of perks, while in NZ the banks enjoy a nice oligopoly which leaves us at the mercy of a few big players.
What that means is we never enjoy double and triple frequent flyer point deals, large signup bonuses, zero foreign transaction fees and ATM fee refunds. We don't have great travel credit cards or reward schemes. Very unlikely that you'll be getting free lounge passes or New Year bonus points.
However, there are still a few good options for us Kiwi travellers. And of course, it's still important that you don't lose money. With the wrong setup, you can end up paying hundreds in fees for currency conversions, overseas ATMs, interest, monthly and annual fees and more.
That's what I'm gonna help you with today.
In this post I'll break down the best travel cards, bank accounts, and some other lesser known options, and show you how over ten years of full time travel, I've managed to keep my bank fees down, gain several free flights on Airpoints, all while enjoying affordable and easy access to all my money, in various currencies, anywhere in the world.
Note: This is a long post with a lot of numbers. If you don't care for the analysis and just want to know what cards/accounts to get, you can skip straight to the bottom.
Part 1: Getting rid of ATM fees
The main way I access money while travelling is via ATM.
Not everyone knows this, but you can use ATM's overseas exactly the same way you use them in New Zealand. You get cash in the local currency, usually get a very good rate, and it comes straight out of your normal NZ bank account. It's very safe and easy.
In many countries, I never use a credit card or travel card at all. I just visit the ATM once or twice during my trip, and use cash for everything.
However! If you don't set up your bank accounts right, this can end up costing you a lot in fees.
Here's an example of when it doesn't work out so well for you:
I wanted to withdraw 10,000 Philippine pesos, which is around $265 NZD. At the time of this withdrawal, the interbank exchange rate (the 'real' rate that banks use) was around 38, and I was given 38.34.
So instead of paying $265, I paid $266.04.
That's a pretty good rate. At one of those currency exchanger booths, you'd lose 2-3% off that at least.
However, let's look at the fees here:
Offshore service margins: This is a fee they charge for withdrawing foreign currency, and will usually be between 1-2%. In my case, the fee is 1.1%, or $2.93 (that's actually low for a NZ bank).
Overseas ATM Fee: This is a fee charged for using an ATM outside your banking network. It usually ranges between $5-$10. In this case it's $7.50 (quite high).
Local ATM Fee: This is a fee the local bank will charge for using their ATM (everyone takes a cut!) As you can see, I wanted 10,000 pesos, but got charged 10,200. That extra 200 is the usage fee (around $5.50).
So for one $265 withdrawal I've been charged $3 in service margins, $7.50 by my NZ bank and $5.50 by the local bank whose ATM I'm using.
That's a total of $16 for one withdrawal. If I do that once a week it's going to add up to around $700 a year - not cool.
So, how do we avoid this?
Choose a bank with no foreign ATM fees
When I first wrote this article a few years ago, the only bank that offered free foreign ATM withdrawals was Westpac, through their membership with the Global ATM Alliance.
Things have changed since then.
In early 2018, ANZ announced they were waiving ATM fees both in NZ and overseas, and ASB followed suit later in the year and BNZ not long after that. Meaning most banks in New Zealand now waive all foreign ATM withdrawal fees.
However, if you really want to see who gives the best deal, we need to add up all the fees involved:
Overseas ATM fee summary (updated May 2020)
Offshore service margin
Westpac (Alliance ATM only)
As you can see, ASB is easily the front runner here. But what we really care about are actual dollar amounts.
Here's what your fees will look like when making the following withdrawals at an overseas ATM:
Westpac (Alliance ATM only)
This picture was a lot more complicated just one or two years ago, but now there's no contest when it comes to the best bank for NZ travellers: ASB.
The bank account I use is their Streamline account, which is managed entirely online, has a free EFTPOS card, and no fees.
How do you use a NZ EFTPOS card at an ATM overseas?
To use your NZ EFTPOS card at overseas ATMs, it works exactly the same as it does back home.
As long as your Eftpos card has a PLUS, Cirrus or Maestro symbol on the back, you can use it at almost any ATM in the world.
Check the back of your card and you should see one of those symbols, most NZ cards are either PLUS or Cirrus.
For example, here's the back of my ASB card with the PLUS symbol:
Then when you visit an ATM, you'll see a sticker that shows what cards they accept, it will look like this:
Since those symbols are displayed there, it means your EFTPOS card will work just fine.
Just put it in, enter your PIN and away you go.
It's also really important to remember not to choose "credit" when you make your withdrawal. Choose check or savings or whichever your bank account is connected to.
If you choose credit, it will not be an EFTPOS withdrawal but a cash advance on your credit card. That incurs interest, a worse fx rate and maybe some other fees as well.
Part 2: Prepaid debit cards/travel cards
These types of cards the best travel cards available today when it comes to fees/usability.
They allow you to pre load different currencies (around 9 different ones) onto a prepaid Visa or Mastercard, meaning you can make purchases/ATM withdrawals in those currencies without paying the foreign exchange fees.
Some also offer free ATM withdrawals.
The 3 main ones available to New Zealanders are the Air NZ Onesmart, The Travelex Cash Passport, The Transferwise Debit Card and the Loaded for Travel card.
First off, Loaded For Travel has been phased out. You might still see people using them, but they're no longer being issued as of 2020. So that one is out.
Let's compare the other three. We'll look at the foreign exchange rate, the fees, and the overall ease of use for each card.
As a benchmark, right now the NZD/USD rate is 0.6185, so we'll base our analysis below on this:
The Air NZ Onesmart card is a Mastercard debit card by Air New Zealand. It is managed via your Airpoints account and is pretty easy to use.
When looking at the rate, here's what you'll get when loading $1,000 NZD into USD.
$1,000 NZD gives us $595 USD.
That's not very good.
With an interbank rate of 0.6185, that means they're taking a cut of 3.7% (that's a lot).
There is also a load fee of 1.5%, a currency conversion fee when you use the card of 2.5%, and a $1 monthly fee.
However the Onesmart does give you other perks, such as earning Air NZ Airpoints on your purchases and 3 free ATM withdrawals a month.
Getting the card is free.
Travelex Cash Passport
The Cash Passport is a travel debit card available from Travelex. You may have seen their currency exchange booths and ATMs in the airports.
Here's their current rate when loading $1,000 NZD to USD:
$1,000 NZD gives us $605 USD.
That's better than the Onesmart (which gave us $595).
The rate is 0.6055, compared to the interbank rate of 0.6185, so they're taking a cut of 2.1%. Not extravagant, but not great either.
Travelex also has a bunch of other fees:
- $10 initial load fee
- 1% subsequent load fee
- $4 monthly inactivity fee
- $10 closure fee).
Looking at that you're already guaranteed $20 in fees to simply open and close an account. ATM withdrawals are free.
Could still be better than a Onesmart, depending how often you plan on using it.
Transferwise Debit Card
Transferwise is a European money transfer service, but started offering debit cards and "borderless" bank accounts a few years later. Their debit card came out around 2018 for Kiwis.
I've been using it and it's been pretty great.
Here's what rate you get for loading $1,000 NZD to USD.
At a rate of 0.6186, that almost exactly matches the interbank rate to four decimal places (actually slightly better).
So the currency exchange fee they are taking is zero. That's amazing.
Of course they also have a fee like the previous cards, which here works out to $7.83, or 0.7%. That's really low!
Ordering a card is not free; it costs $14 NZD.
After that there are no monthly fees, and you get free ATM withdrawals of $350 per month (2% thereafter).
There are also many other perks to owning a Transferwise card - you can open bank accounts in various currencies, get an IBAN number, and receive money in foreign currencies too.
So which prepaid travel card is the best?
Let's put all that info together and see if we can get a winner:
Exchange rate margin
ATM withdrawal fee
free up to $350/month
First, the Onesmart exchange rate is so crap that I would disregard it altogether - there is no way you would save money with it when you're losing 3.7% every time you load money.
That leaves Travelex and Transferwise.
Because the exchange rate is also rather terrible for Travelex (and literally perfect for Transferwise), that would be enough for me to recommend Transferwise outright.
Add in the fact Transferwise has no closure fee, no inactivity fee, no monthly fee, and the cheapest load fee by far, and it's a no brainer.
The $14 set up fee is the one downside, but it is a one-off, and over the long run is easily worth it. In fact, you will make that back in savings the first time you load money.
Travelex also ran into financial problems in early 2020, and it seems risky to have money stored on one of their travel cards right now. Them disappearing is not impossible.
So easy decision here: Best prepaid travel card for Kiwis is the Transferwise Debit Card.
Part 3: The best travel credit card for Kiwis
Let's move onto travel credit cards.
The trick with credit cards is to minimise your fees, never pay interest, and try and earn some reward points along the way.
We'll start with fees. What are some of the fees you typically pay with credit cards?
Here's an example:
For this particular transaction, I purchased a $111 USD air ticket on Cambodia Angkor Air.
On that date the interbank rate was 0.875, and they gave me 0.873. That's good.
But you'll also see I got charged fees of $3.18; around 2.5%.
I personally do not want to add 2.5% to everything I buy, just because I'm using plastic.
Unfortunately there is currently no bank in New Zealand that offers a credit card without foreign transaction fees, so this is unavoidable.
If you're a Kiwi living in Europe, I would recommend getting an N26 card. It's like a Transferwise Card, but slightly better. I have one and it's amazing. You can read my review on it here.
However, having a credit card is very handy during your travels, so I think it's a good idea to always have one on you, even if our options aren't great in NZ.
Since there are literally hundreds of different cards available in New Zealand, I'm not going to compare them all. What I will do is compare a few "free" credit cards to see which gives us the best deal.
The following credits cards all have no annual fee and are reasonably easy to get approved for:
ASB Visa Light
Kiwibank Mastercard Zero
Cash advance fee
Interest rate on purchases
Interest rate on cash advances
All are pretty similar across the board.
The main differentiator is the ASB Visa Light has no cash advance fee, meaning any ATM withdrawals are free. They should be free anyway on your EFTPOS account, but have this as a safety net is great as well.
The other thing is the AMEX Airpoints card is free and gives you a chance to earn Airpoints, plus you get a $50 signup bonus - that's also important and I'll address that more later.
Let's take a look out how these fees actually translate into numbers. These are the fees you would pay if you made the corresponding purchases or ATM withdrawals:
ASB Visa Light
Kiwibank Mastercard Zero
$500 from ATM
$1,000 from ATM
$2,000 from ATM
$500 in purchases
$1,000 in purchases
$2,000 in purchases
The ASB credit card is best if you'll need to make ATM withdrawals.
The Kiwibank card is best if you'll want to make actual purchases.
This is under the assumption you pay the bill on time and don't incur any interest.
Either way, credit cards should be a backup only, and you should use your ASB EFTPOS for ATM withdrawals and Transferwise debit card purchases on the road wherever possible.
Don't forget about Airpoints!
This is more a tip for while you're in New Zealand, but make sure you're taking advantage of Airpoints!!
If the average New Zealander uses an Airpoints credit card in their day-to-day life, they should easily get a free air ticket to Aussie or Bali each year.
If you're after a good, cheap, fast-earning Airpoints card to use, the American Express Airpoints card is the easy winner.
It's the only zero-fee Airpoints card there is, plus the Airpoints earn rate is even better than some of the more expensive cards from the NZ banks. I'd highly, highly recommend applying for it today while it's around. Often they also have a $50 signup bonus, which makes it an absolute no brainer. Check here if the bonus is on offer and to get your free card.
For a more thorough breakdown of Airpoints cards in New Zealand - I've got an entire guide which analyses every single Airpoints card available in New Zealand. You can check it out here.
Another credit card tip: Paying in NZD (if it's a good deal!)
Sometimes shops and websites will ask if you want to pay in NZD instead of local currency.
This can be a good idea sometimes.
Whenever the shopkeeper asks if you'd like to pay in NZD, always ask what the amount will be. Then pull out your phone and do a quick conversion (I use the Oanda app) and check if it's a fair amount.
Nine times out of ten they will be taking a big commission on the exchange rate. That means even though you'll avoid FX fees on your credit card, you'll end up paying more to the shop and it will probably end up costing you more overall.
There are good opportunities to do this though. Take a look at this example.
This is a hotel booking form from one of my favourite booking sites, Agoda. It's for a hotel in Bangkok:
Their prices are USD listed ($88.55), however they also give me the option to pay in NZD ($102.25).
If I choose to pay in NZD, I'll be getting a conversion rate of 0.866, compared to the current interbank rate of 0.867.
That's very good, and much better than what AMEX will give me if I pay in USD and let them convert it (it was around 2.5%, remember?)
Therefore I often make online bookings in NZD (assuming the rate is good), which eliminates foreign transaction fees, and also lets me earn some Airpoints along the way.
In the case that it's better to pay with USD, just use your Transferwise debit card.
Summary for the best travel credit card:
There is no 'good' travel credit card in NZ (that I know of).
However, it's always good to have one anyway. My recommendations are:
So which travel cards/bank accounts do I use?
Here's the summary of what I use currently to keep my fees as low as possible and money as easily accessible on the road.
The main card I use while travelling is my N26. Nothing else is anywhere near as good. If you have access to a European address, you can get one, even on a NZ passport. However, I know most people can't do this, so here are the next best options (which I also use):
- I have a Transferwise Debit Card which I keep a reasonable amount of USD in. This can easily be moved between currencies on the Transferwise app for little to no fees. If you plan on travelling a lot, this is the first card you should get.
- I have an ASB Streamline Account (no fees), which I use to withdraw larger amounts of money from ATMs. I have never visited a country where I could not do this.
- I have an Airpoints American Express (no annual fee), which also has no fees and earns me Airpoints. I barely use this while travelling, but I use it for pretty much everything I buy while in New Zealand. If you're not already, I'd highly recommend signing up for one today and start stacking Airpoints! I also recommend you read my guide on travel hacking for Kiwis.
- Lastly, I carry a small amount of USD in cash for emergencies.
Between these options I manage to keep my bank fees almost non existent - in fact you might have noticed every single card has no annual fee.
The only fees I pay are for currency conversions, and on N26 and Transferwise those are non existent too.
I also get to earn a few frequent flyer points along the way. Pretty good, no?
What should you use?
If you're on a shorter trip (say 2 weeks - 1 month), it becomes much less important what card you will use. If you're just going to Australia, you can simply use your NZ Eftpos card to get money from ATMs. You can even use your ANZ and Westpac cards and their equivalent ATM in Australia.
If you're going on a longer trip, or travelling around the world, you absolutely need a Transferwise card. That option can hold you down in almost every country. Keep an ASB Eftpos card handy, and possibly one other bank account too as a backup.
Best of luck in your travels and as always, if you have any questions, drop them in the comments below.