Credit Card use in NZ/Aus

[Shopinpat]

I will be heading to NZ&Australia in Jan. Can someone enlighten me on use of CC in those countries. Is it any time you use a cc you get charged a service fee? Hotels, restuarants, shopping, bars etc. Do you get charged for travelers checks also? I usually do not carry cash and like to use credit cards. Do not own ATM card due to

the fact I have a problem paying to get my own money! Just me apparently because eveyone does it. But would that be the way to go an ATM card? Does anyone know the charges for that?

Any info appreciated. What is the best way to purchase things I guess is my question.

Thanks All

Pat

[Globaliser]

Is it any time you use a cc you get charged a service fee?

If you use a credit card in a shop, restaurant etc, you will be charged the local currency amount on the slip. You won't normally get charged a service fee at that point, although there are circumstances in which this happens (eg in taxis; or when buying tickets from some airlines, as I've just mentioned in another thread).

 

When that amount is converted and put onto your bill, the way that the conversion is done will typically see that exchanged into your own currency at a good exchange rate, to which a percentage markup is invisibly applied (typically in the order of 3% or so). That markup can differ from card provider to card provider.

 

If you draw cash on a credit card, then you will typically have to pay interest (at the usual punitive credit card rates) from the day that the cash is drawn. So for small purchases with cash, your best bet is to draw cash from an ATM with your ATM card (on the assumption that it's a card that is recognised by one of the major international networks). If you use a bank ATM, there is usually no charge directly imposed by that bank for using the ATM; however, your own bank may charge you fees for using the ATM card, on its own scale (this will vary from bank to bank). In addition, there will also usually be a percentage markup on the exchange rate, in a very similar way to credit card transactions.

 

There are some banks that have overseas partners, so that if you use the partner's ATMs you won't be charged the fees that you would normally be charged. The Global Alliance is one of these schemes: I think that Bank of America is the US partner, Westpac is the partner in Aus/NZ.

 

My own strategy in Aus/NZ is to use a credit card for as much as possible; I use my Barclays ATM card to draw cash from Westpac machines for all my cash needs.

[nutzo]

The simple answer is that you will be charged a fee of some type/amount when using your card over seas. As for how much, it depends....

 

This web site details alot of details.

 

http://flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange

 

As for only using a credit card, what will you do when you need cash?

 

I just opened up a free Bank of America checking account with a debit card for my upcomming trip to Australia, since they have an agreement with WestPac bank. The 1% fee is cheaper than using my existing ATM or credit cards (3% fee).

[Shopinpat]

Thanks for all the info.

It sounds like the Bank of AMerica is a great idea. Is Westpac

a larger bank in Australia? and is it also in New Zealand? Or does anyone know which bank has agreements with us banks in NZ?

I do always bring cash however I prefer to use cc when possible.

Also is Visa or American express widely used in NZ and Aus. Anyone know?

Thanks

[moyaroo]

http://www.westpac.co.nz

 

So yes they are there! Converting cash is always a loser- ATM's are much more effiecient for obtaining cash. VISA is widely accepted, I have found that AMEX which charges a higher fee to merchants is often accompanied by a 3%surcharge. (Just encountered that at O'Reilly's near Brisbane so used my VISA instead with no surcharge.)

[kenish]

OP- First I'm assuming you're from the US because your home country can make a big difference.

 

Agree with the other posts; we returned from Oz last month. The most efficient and least expensive way to get cash is usually ATM. Look at your bank's disclosures to see what the fees are...typical is the host ATM fee, a $2-$3 per transaction fee from your bank, and a 1% exchange fee. Our bank however only charges the 1% exchange fee which is an excellent "bottom line" rate. We were never charged a host ATM fee in Australia for some reason.

 

You will probably pay a lot more in fees or unfavorable exchange rates to get cash before you travel, not to mention the risk of carrying large amounts of cash. Traveler's checks are falling out of use worldwide and places that are smaller or more off the "tourist track" may not accept them.

 

For CC's, the fees can be as high as 3-4%. Visa, MC, Amex, etc. charge a fee, plus the bank sponsoring the card adds a fee. One exception is Capital One- they do not charge a fee and cover Visa's fee so your transactions are zero-fee and at the official exchange rate. Of course if you don't pay off the card (or get a cash advance at an ATM) then it gets expensive. I did overhear other travelers being told Amex wasn't accepted several times on our trip.

 

By the way, CC's are not quite as widely accepted in Oz, and a minimum charge amount of $10-$20 is common.

[nutzo]

By the way, CC's are not quite as widely accepted in Oz, and a minimum charge amount of $10-$20 is common.

 

That's good to know.

Here in the US, most stores do not have a minimum charge, and they are not allowed to charge extra for using a credit card. Since I get cash back on my various cards, I hardly even use cash any more.

[nutzo]

It sounds like the Bank of AMerica is a great idea. Is Westpac a larger bank in Australia? and is it also in New Zealand? Or does anyone know which bank has agreements with us banks in NZ?

 

Bank of America is the only US bank I've found that has this type of agreement with over sea banks.

 

Many credit unions will not charge a foreign ATM fee either, so if you are a member of one, you might want to check. My credit union gives me 6 free withdraws from "other" ATMs per month.

[Glaciers]

For CC's, the fees can be as high as 3-4%. Visa, MC, Amex, etc. charge a fee, plus the bank sponsoring the card adds a fee. One exception is Capital One- they do not charge a fee and cover Visa's fee so your transactions are zero-fee and at the official exchange rate. Of course if you don't pay off the card (or get a cash advance at an ATM) then it gets expensive. I did overhear other travelers being told Amex wasn't accepted several times on our trip.

 

We just applied for the Capital One CC based on other threads here. There is no annual fee, it's a cash back card and there are no transaction fees as you mention. We only have one CC currently and hate having too much plastic in my wallet but this seems to be a very good option to avoiding unecessary fees.

[pcur]

I have used our Capital One credit card many times outside the US, and I also use it if I'm purchasing anything online in a foreign currency: our Virgin Atlantic and Jetstar airfare, for instance. Cap One charge no fees.

 

I have also used my BofA ATM card all over Europe, as they also partner with Barclays. Never an ATM fee. I'm not too sure what the 1% fee is; I'll have to look into that.

 

I am doing something new for our trip this October. Schwab Bank has a free account that reimburses up to $25 in ATM fees each statement period. That's a good one to have as a back-up if you cannot locate an ATM that partners with your bank.

[rjscott]

We used our Capital One card throughout Australia and there was no conversion fee when our charges came thru on our statements. For cash, I had purchased AAA Traveler's Checks prior to my trip and had a stopover in Melbourne prior to my arrival in Sydney. While waiting for my connection, I went to exchange some of my traveler's cks for some AU cash and as they were AAA, they did not charge me a fee(much to my surprise). This was not the case in Sydney, however, so I guess it varies from location to location.

[Shopinpat]

Ok all you veteran ATM users I am still confused.

Do you obtain a CC to use as your ATM card and you can obtain cash from the country you are in? Is that the same as an ATM card or are they different.

Again I am a cc user and never had a need for ATM card.

Do you open a check book for the atm or does it go on a credit card?

Thanks for the info. Sure feel like I am behind the times as I have always used CC Europe, Tahiti, Carribean never been charged a service charge and always been readily usable.

[kenish]

Shopinpat- It's still not clear what your country of residence is; that can make a big difference due to banking law in different countries. Again, I will assume you're in the US. You can get cash from an ATM (home or abroad) with either an ATM/debit card or a credit card...but there is a HUGE difference. An ATM card simply withdraws cash from your checking or savings account. A CC is a cash advance from your credit card balance. There is a high interest rate that begins the instant of the transaction; unlike regular charges on a CC, you will owe interest on the cash advance even if the CC balance is paid in full before the due date. There are many personal finance websites that explain this better than I have. Simply put, a cash advance on your CC is one of the most expensive methods where an ATM/debit card is usually the least expensive.

 

Chilkoot- I have only one CC I use at home, but they charge 4% on foreign purchases! So I got a Cap One to use when I travel. It's a good idea to carry two cards traveling anyway....in case one card is damaged, lost, or stolen you have a backup. I feel like sending the Cap One statement to the other CC company, pointing out they lost merchant fees on about 100 transactions totalling thousands of dollars because of their fee.

 

Nutzo- Small world, we are in OC too (RSM). Some places in Oz did not accept CC (bakery, souvenir stand). Others post a minimum charge, or balked a bit at doing a $10 purchase on a CC. Generally the more a place was on the "tourist grid" the more likely they were to accept CC without minimums.

 

General tips- ATM keyboards overseas usually do not have letters with the numerals. For example if your PIN is "HELLO", be sure to figure out the all-number version (43556) so you can enter it into an overseas ATM.

 

Be sure to call your CC companies and let them know you are traveling. They will add a notice to your account. If you don't do this, they may freeze your account due to unusual activity...which can be a pain to resolve overseas. Also make a copy of all your cards, passport, etc. and keep them in a safe and separate place. In case of loss or theft it will help the replacement process go a lot faster.

[Fabian52]

I applied for a Capital One credit card about 2 months ago and just got it.

We are going to use it for our travels to Australia/New Zealand and were told there is no international fee. I am going to just get some money from our airport before we go for the Australian money (don't know how much) and then if any left over will just use it for tips while we are on board to tip our room steward and our waiters. We always like to tip them extra because they always work so hard and work such long days. I hope they don't mind being tipped in Australian currency or I could tip them in US.

There is only a one time fee of $7.00 at our airport to convert and the conversion rate is very good right now so will do that for our Australian currency and just get maybe $100 changed over to New Zealand dollars to use while we are on our excursions in New Zealand from the ship. I doubt anything will be left over. :p:p:p

[moyaroo]

If the crew is staying in OZ for another cruise the tips in AUD would be welcome, they can exchange but will take at hit (though smaller than passengers) on the exchange. Coins are not usually exchangable so try not to tip in coin unless you are sure that the recipient will be able to use that particular type of money later.

[Billy and Charlie's Mum]

Credit cards are very common in Australia. I and many others use them as our day to day accounts. It is true that you can come across a minimum amount purchase, however, most places if you ask will just charge you 30 - 50 cents on top of your purchase to pay for the merchants fee and allow you to use the card.

 

It would be much better if you open a savings account linked to your Credit card. Then if you didn't want to pay the fee just press savings instead and no fee will be charged.

 

Did I explain this right?

[pcur]

Ok all you veteran ATM users I am still confused.

Do you obtain a CC to use as your ATM card and you can obtain cash from the country you are in? Is that the same as an ATM card or are they different.

Again I am a cc user and never had a need for ATM card.

Do you open a check book for the atm or does it go on a credit card?

Thanks for the info. Sure feel like I am behind the times as I have always used CC Europe, Tahiti, Carribean never been charged a service charge and always been readily usable.

 

An ATM card is linked to a savings or checking account with your bank. You do not have to use paper checks. It usually has a Visa or Mastercard symbol on it, which means it can also be used as a "debit card" to purchase items, just like a credit card. The difference is when the ATM / debit card is used to purchase items, the charge immediately is deducted from the savings / checking account it is linked to with your bank.

 

So, having an ATM / debit card is like having both types in one card.

 

When you purchase something you can request that the transaction be sent through as a credit purchase or a debit. The reason for this is if you use it as a debit purchase you have to enter your security PIN number (should be 4 digits to be able to use it in Europe) to verify it's your card. This is the same PIN number you would use at an ATM machine. If the merchant is not set up for you to enter a PIN at the time of purchase, then you use the card as a credit card, and the merchant puts the transaction through as if it was a credit purchase.

 

Now you have one card being used for ATM cash withdrawals, a credit card purchase, and a debit card purchase (with PIN to authorize the transaction).

 

ALL of these types of transactions go through and immediately are paid out of the savings / checking account the card is linked to. The difference is on the buying end: are you getting cash, buying something with the PIN, or just charging it.

 

It's handy to have one of these.

[JACKHAWK]

Does OZ & NZ take all major cards(MC,VISA,AE)?

[NCCruzQueen]

Does OZ & NZ take all major cards(MC,VISA,AE)?

 

Jackhawk, American Express is less likely to be accepted than the other two.

[pcur]

We did an 18 night around Australia last year and used our Cap 1 Visa extensively with no problem. Cap 1 has no foreign currency exchange fee.

[Globaliser]

American Express is less likely to be accepted than the other two.

I have very few problems using my Amex (my primary card) in Oz and NZ. But (as everywhere) there will always be some places that don't take it, so (as everywhere) you shouldn't rely exclusively on an Amex.

[room010]

I have very few problems using my Amex (my primary card) in Oz and NZ. But (as everywhere) there will always be some places that don't take it, so (as everywhere) you shouldn't rely exclusively on an Amex.

 

This. Amex isn't as widely accepted here as in the US so I'd bring either Visa or Mastercard and you'll be fine. Travellers Cheques can also be problematic as many outlets no longer accept them although you can use them to obtain cash from any bank or your hotel. ATM is the best way to go for obtaining cash and there are machines everywhere.

 

You can use your credit card for practically any transaction but there are still some small cafes, bakeries, etc that only take cash for a cup of coffee or whatever. This doesn't apply too much in busy cities or tourist centres but if you find yourself off the beaten track in a small country town make sure you have enough cash to buy your refreshments. There is usually a prominant notice telling customers "Cash Only" and some outlets don't accept credit cards for very small amounts, eg, $5 or less.

[NCCruzQueen]

Globaliser & room010, Thanks for your tips. I usually take two cards and my ATM card when traveling.

[MargoK]

Globaliser & room010, Thanks for your tips. I usually take two cards and my ATM card when traveling.

 

 

NZer's use credit card extensively - mostly Visa or MC.

 

One thing I have noticed though is when we booked our Hotel in Sydney for our pre-cruise nights, we were told that Credit Cards now attract a transaction fee, charged by the Hotel.

 

In NZ (not sure about OZ) the Credit card companies (Visa and M/C) now allow merchants to pass on credit card fees, BUT they must display or tell you first. Some BP Petrol Stations charge fees, which caused a huge client backlash!

[flamomo]

I've had a Cap I card for years. Guess I had better call them before we go and see if the no exchange fee thing applies to my account.