[denalipop]

For the first few weeks, we'll have some pretty big expenses: hotels, rental car, furniture, appliances, etc.

What is the best (cheapest) way to pay for those things:

a) credit card from home country (we have Discover, MasterCard, Visa, American Express)

b) EFTPOS card from NZ bank (after transferring funds from US)

c) cash from NZ bank (after transferring funds from US)


Using funds from our NZ bank account requires us to pump US dollars into it and wait for the money to arrive. This reduces some flexibility, but in theory, if the exchange rate is steadily getting worse, it's better to transfer money early than wait for the day of the purchase. Likewise, if the exchange rate is improving, it's best to wait until the last possible minute to transfer funds.

However, fees are also a factor, and I'm curious what strategy is overall a better one, assuming the exchange rate isn't changing significantly from day to day.

[Mamee & Co]

I know that within the UK if transferring funds to NZ we are advised to use the currency trading firms rather than the banks as there is a difference of 5-6% on the currency exchange rate.

It might be worth while looking at the rates of exchange offered by the card providers against those that the specialist currency trading firms are offering as they are substantially better than the normal bank interest rates, particularly if you are intending paying things off relatively quickly..although if the dollar is in the same free fall as the GBP you could well cover most of your charges on the credit card anyway!

[denalipop]

I called each of my credit card companies and got the following info:

American Express
- 2.7% fee on top of exchange rate
- rate here: http://corp.americanexpress.com/gcs/travel/us/corp/ctn/resources/currency.aspx

Visa
- 3% fee on top of exchange rate
- rate here: http://corporate.visa.com/pd/consumer_services/consumer_ex_results_us.jsp?from=USD&to=NZD&rate=0.0

Mastercard
- 3% fee on top of exchange rate
- don't know where to find rate

Discover
- 2% fee on top of exchange rate
- don't know where to find rate
- UNLIKELY TO BE ACCEPTED IN NZ

[BkyMonster]

I gather Bank of America has/had a deal with westpac in that you can take money out at current exchange with (little?) no fees. So if you have an BofA bank account you can use Westpac ATMs for kiwi cash from a US account.
Other than that eftpos and cash are essentially the same. You may find you NEED a credit card for things like hotel reservations, internal plane tickets etc.

[frootbat]

Eftpos and cash won't be any different in terms of charges once you've got some money in a NZ account.
I personally would prefer to transfer a lump sum to a NZ bank account (which you can open before you get here) using a specialist transfer co (rather than risk your bank's own rate) then spend that. It will be far easier to keep track of your spending, and you won't get spanked with credit card charges, nor be at the mercy of the CC company's exchange rate, every time you shop.

If you bring the right sort of documentation (payslips etc from your home country - contact the NZ banks immigrant banking person to find out what you'd need) you might be able to get a NZ credit card as well which may help 'balance' your budget. Beware, they do charge you to have a CC in NZ (in addition to charging interest on the balance), and unlike cheque/current account charges, which are reasonably easy to avoid, the CC charge isn't as easy to wriggle out of!

[Silverwing86]

We bank with ASB and have all our insurances (except health) with them as well. One of the advantages we find in using a Credit Card is the True Rewards programme. You get one True Reward dollar for every $150 you spend on your Credit Card and this can be used as cash in many different ways.

When we first arrived we were still able to get rebates on our insurance premiums with True Reward Points (this is before the became True Reward 'dollars'). In that first year (obviously making many big purchases as we'd just arrived) we managed to get $300 in insurance rebates, not bad !

Unfortunately it's not possible to get rebates on insurance premiums anymore but... we pay all our Credit Card and account fees with True Reward points and can spend the True Reward dollars in many different stores (https://www.asb.co.nz/story538.aspx?). We find it quite worthwhile.

That said, we always pay off our Credit Card debt in full on the last interest free day. I believe you get 55 interest free days and if you pay the outstanding amount in full every month on the last day of that term, you never pay any interest at all :nice1 ! Works quite well for us, but you do need the discipline to pay off the debt in full every month so as to avoid paying interest (the Credit Card 'trap', you really do not want to go there :uhoh !!) .

We use Credit Cards a lot more than we used to and hardly carry any cash anymore. EFTPOS can be handy, but I have trouble getting used to having to first make sure there are sufficient funds in the 'Transaction' Account (usually keep most of the funds in Savings accounts to maximise savings interest). The Credit Card is just so much more convenient and we save True Rewards dollars at the same time :D.

Cheers,
Silver

[IanW99]

...
That said, we always pay off our Credit Card debt in full on the last interest free day. I believe you get 55 interest free days and if you pay the outstanding amount in full every month on the last day of that term, you never pay any interest at all :nice1 ! Works quite well for us, but you do need the discipline to pay off the debt in full every month so as to avoid paying interest (the Credit Card 'trap', you really do not want to go there :uhoh !!) .
...


You can ask ASB to pay off your credit card automatically on the last day that it is due so you don't have to worry about this.

Ian

[Silverwing86]

You can ask ASB to pay off your credit card automatically on the last day that it is due so you don't have to worry about this.

Very true Ian, and this is indeed exactly what we have done. However, my point was actually that you still need the discipline to make sure you have the money to pay it off and you're not spending above your budget :D ! It can be tempting to spend what you don't actually have when using a Credit Card (which is how so many people get into trouble/huge debt !)...

Cheers,
Silver