Please note: This is not intended to be financial advice, but my consumer advocacy. Please talk to an authorized financial advisor if you need personal financial advice.
I was renewing my credit card and decided to conduct a full market analysis of all the credit cards available in New Zealand. I was interested in the rewards, fees, return on spend vs cost, and the other benefits the cards provided, as well as the convience of usage. Overall it was disappointing to see the low rate of rewards and benefits New Zealand consumers get versus other overseas markets (especially North America).
Personally, I still prefer to use a credit card. There are several benefits for me, including:
- Cashflow: Being able to spend over a month, getting one consolidated bill for the spend that's due in 15 more days, lets me send with confidence and keep a monthly eye on spending. It also helps being paid monthly which means I can align my credit card payments to my monthly salary.
- Fraud protection: Credit cards offer far greater fraud protection than an EFTPOS or other forms of payment. For debit cards - your money is still held while the bank conducts fraud assessment, which is less of an issue with credit cards.
- Big purchases: Credit cards make it far easier to spend large money easily, such as when booking travel for multiple people.
- Rewards: When the ROI works out, the cashback rewards of credit cards.
Anyway, going through the list of credit cards available in New Zealand, these were my observations:
- American Express has the best reward rate across the board, but also has the worst acceptance rate. It also does not support Apple or Google Pay in New Zealand which makes it more dfifficult to use.
- ANZ and Kiwibank have the worst platinum cards: ANZ's Cashback Visa Platinum is a very watered down card, ditto for their Airpoints Platinum - both of which have reward rates less than 1%. Once again Kiwibank isn't doing well in this area with a 0.87% reward rate to airpoints.
- TSB has the best platinum card for rewards: TSB is new to the market with their platinum credit card, but it has the highest non-AMEX reward rate, with full platinum card benefits. It's also the first platinum card on the breakeven spend chart (requiring $6,300 a year of spend to breakeven on its $90 fee). Note though their insurance policy doesn't even mention rental cars - if you rent a car during your travels, I wouldn't get it. They also don't support Apply Pay (but do support Google Pay).
- ASB has a good middle-ground platinum card: ASB's Platinum is relatively cheap at $90 per year, offers travel insurance, a 1:100 reward rate, and has all the features you'd expect from a major NZ bank. This is the credit card I decided to get - although TSB was the best for rewards, being able to leverage the benefits of ASB's other banking products, Apple Pay, and the better travel insurance offering on the credit card makes a difference for me.
- Be wary of "points": One trick the likes of BNZ, Westpac and even ASB to a certain extent do is offer "points" in the form of hotpoints, BNZ Rewards, is that they are not directly aligned to $1 NZD. For example, with BNZ Platinum, $1 of spend equals 1.67 BNZ points. However, on the website the conversion rate varies based on the reward you select - the best one being 160 points equal to $1. This is designed to make users really confused. ASB and ANZ offer far better offers here, with cold-hard cash from ANZ (though paid out annually), or "true rewards" which is equal to NZD from ASB. One note though is True Rewards have a limited set of retailers. Converting them to gift cards incurs a $3-$5 admin fee which obviously reduces ROI.
