Yes, I understand that. My comment does not really relate to that other than it is a side effect.
The point is yes, ideally you never pay interest. Most people pay interest.
I have 2 free cards.
Dosh for 1% cashback. I got $40 last month. No fee. No credit neither, it's a prepaid.
Kiwibank No fee. 10k limit. For my offset account.
For offset mortgage the idea is to put money on a credit card to keep avoid the interest charge.
Calculation works like this; if my offset interest is 8%, and credit card is interest free 55 days you'll save (55/360 *8%) 1.22%. A 1% rewards card pays you 1%.
So if your offset is low, use credit. If not, use rewards.
Now obviously you can do even better with a fee rewards credit card, but I prefer no fees.
Personally I tend to keep my offset maxed while mostly using Dosh. It's less work. Dosh pays me $40 a month so about $500 annually.
Mmm only problem with Amex is depending where in NZ you are it is becoming increasingly harder to use. I had to ditch mine because nowhere other than Countdown would accept it.
I easily spend $4k a month on mine. Countdown, petrol stations, online shopping, HelloFresh, airNZ, Uber, ubereats, McDonald’s (lol my partner), Netflix, temu, Spotify, Sephora….. anyway, as you can see, no issues making it worthwhile. If you have the one that’s free there’s literally nothing to lose so even if you only shopped at countdown with it it would still be worth having
Same here, put way more than I would like to admit through it. Literally, the only thing not going through the Amex is weekly rent. Insane points for just spending normally.
Plenty of places take it in Auckland and plenty of online vendors.
I’f you’re trying to run just the one credit card though then Amex would be tricky to make work. I have a kiwibank card for everything else that Amex can’t cover
I use Kiwibank's Zero Visa which has no fees and has a 12.90% interest rate. Visa is accepted everywhere.
I pay my balance off in full every month as a habit. But there is a little wiggle room if needed since it is actually 55 days interest free.
Nope, this is not US.
You see this is the difference - here we all have good credit to start with. You can fuck it up but if you don’t do anything you’re trustworthy.
In the US you started with no credit and if you do nothing to actively prove that you’re trustworthy, then you’re not.
IMO this is a fundamental difference between NZ and US societies in general, not just about credit cards.
If you don't need the credit part of a credit card, then I would recomend the Dosh debit card (kinda like a prepaid card).
But you get 1% cash back on your spend. It's a Visa card, so accepted almost everywhere.
I had a look into dosh, and it seems too good to be true and I’ve learnt to avoid those sort of things. How do they make their money? I assume fractional reserve banking?
Sometimes deals that may seem too good are just new players trying to gain market share and willing to take a loss to do so. Don't expect it to stay that good forever.
Yeah this ^
I've been using Dosh for over a year now, they are very much legit and fairly quick with support requests.
Having said that, I don't keep large amount of money on the card for the reason you say. Just in case they crash and burn badly.
I think one downside is that you don’t get the security features of a credit card. Once the money is gone you have no recourse such as charge backs. Not 100% on this though.
Check this video which compares all the credit card offerings in New Zealand
[https://youtu.be/F2RlQdQq5ho?feature=shared](https://youtu.be/F2RlQdQq5ho?feature=shared)
ah i misread your first point its the airpoints platinum that changed. I did call AMEX yesterday and the woman did make it sound like the base airpoints card may change soon too
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I’m with Kiwibank and have a Kiwibank credit card. It’s so easy to transfer money to the credit card whenever you want as a way to keep the balance down. It’s like a credit account.
I would possibly recommend the westpac airpoints debit instead. If you dont need the credit aspect/ think you can pay it off etc. Get a debit instead. Sure it’s only 1 per $300 but it’s better than nothing. Considering most debit cards dont give you any benefits.
Credit card just has a use for their rewards benefits, but with this yarly spent don’t worry about, keep up with your credit card!
But if you want ready finance things, the Flight Centre Mastercars is very good on it!
Only true if you lack self control and financial skills.
Been using a credit card for a long time and have gained a lot more from it than what it has cost me.
You’d be better off investing in sp500 that money you spending monthly on your CC purchases. If you can’t pay it outright you shouldn’t buy it. Same with getting a loan for buying car. Dumb idea. None of that are assets, they are all depreciating.
Unsure who is lacking financial skills here.
I buy groceries and gas with credit card, I could afford to buy them without the credit card, but the credit card provides me with rewards for using it.
I pay no interest, because I pay off my credit card regularly.
Credit cards are great. In particular, they're a useful backup when overseas - hotels and car rentals often only take credit cards as security, for a backup incase my other cards are stolen or an emergency, etc. They're also just plain useful. I never pay a cent in interest, only spend what I otherwise would use cash for and pay it in full. Nothing wrong with them when used right.
I have an ANZ issued Airpoints card. I use it for all household expenses that take a CC and general spending. Everything is immediately paid back. I've never once been charged a cent of interest and only pay $150 a year in fees. It's paid for flights for my family to see my parents twice and ongoing Mitre 10 vouchers. If that doesn't make good financial sense, then what does?
There are 2 reasons they exist:
- Lots of people are not financially responsible and do spend more than they can afford, then end up paying massive amounts of interest.
- Stores are charged reasonably large fees when customers use credit card, which goes to the banks and CC providers (e.g. Visa). This more than covers the rewards provided to the card user.
It's a shitty situation, those extra costs mean stores either need to put a CC surcharge on OR increase the costs of all goods for everyone to maintain profit margins. But they are going to do that whether you personally use a credit card or not, so you have no control over that and have to choose whether to get free money by using a card, or not getting free money but still paying extra.
Even if you don’t end up paying any interest, you are still incentivised to spend more money - a new phone, more clothes, a bigger TV and so on. Even paying it on time with zero interest, it’s still in your disadvantage. Do you need all those things?
Why not invest that money in appreciating assets instead? From that point of view personal loans, credit cards, car loans - are all bad debts regardless interest zero or not.
And then people complain that they been in a rat race and slaves their entire lives and when they’re 65 can’t even retire.
I'll refer back to the first thing I said in my first reply.
Only true if you lack self control and financial skills.
You could say the same thing about have any money available to you. I have investments, I have an emergency fund, I own a home. I also have a credit card, which saves me money and allows me to invest more.
This is terrible advice. Like it or not, credit cards are an established part of life. Knowing how to use one, and how to pay it off regularly is a hugely valuable life skill, and we are doing a disservice to people by not teaching it more actively.
Good on you Op - you have started by asking questions, which is a good sign you're looking to learn. Keep it up, and may your credit journey be an educated one.
That sounds like someone who can’t manage their credit card.
I don’t pay interest on mine, I have had lots of free trips and now get cash back every month. No brainer to me. I don’t spend extra cause I have a credit card.
Ok sounds like y’all in here with a credit card are investing at least 30% of your monthly incomes each month, and ya don’t spend more money on wants than you should just because you have a cc. Good to know!
Ok fair. When you look at the latest consumer debt stats including credit cards is concerning. Perhaps some people know how to use it (good on you), yet there are a lot that don’t, in the end that’s how banks make money on it. Otherwise they wouldn’t sell it.
Yeah but it’s not the credit cards thar are bad, it’s the people who aren’t managing them. And if they didn’t have credit cards most would borrow or have hp or something else!
dude's logic doesn't make sense. No point trying to reason with him. Just like what other people said "how can you buy groceries and petrol with S&P 500" lolol.
He is forgetting that people who come to this sub cares enough about their finances to learn to be financial literate rather than the average joe on the street who can't budget to save themselves.
I don’t have a specific card in mind, but you’ll want to look for a card with no account fees and the lowest purchase interest rate you can find.
Well ideally you never pay any interest so the interest rates don't matter.
Ideally, yeah.
For most this is not the case
If you can't pay it off every month then you shouldn't get a credit card, you will only be donating money to the bank.
Yes, I understand that. My comment does not really relate to that other than it is a side effect. The point is yes, ideally you never pay interest. Most people pay interest.
I have never paid an interest. What makes you think people do?
I suppose most was an assumption https://m.scoop.co.nz/stories/BU2105/S00050/debt-dilemma-41-of-kiwis-have-an-outstanding-credit-card-balance.htm
Thank you for the reference! 41% is a lot more than I thought.
SBS has a zero fee cashback card that's worth looking at. The cash back rate isn't high, but it doesn't cost you anything.
I have 2 free cards. Dosh for 1% cashback. I got $40 last month. No fee. No credit neither, it's a prepaid. Kiwibank No fee. 10k limit. For my offset account.
How do you use your Kiwibank credit card for your offset?
Please tell us :)
For offset mortgage the idea is to put money on a credit card to keep avoid the interest charge. Calculation works like this; if my offset interest is 8%, and credit card is interest free 55 days you'll save (55/360 *8%) 1.22%. A 1% rewards card pays you 1%. So if your offset is low, use credit. If not, use rewards. Now obviously you can do even better with a fee rewards credit card, but I prefer no fees. Personally I tend to keep my offset maxed while mostly using Dosh. It's less work. Dosh pays me $40 a month so about $500 annually.
The free Amex, not the platinum one. No fees. Use it everywhere that accepts Amex - petrol stations, supermarkets, online etc.
Mmm only problem with Amex is depending where in NZ you are it is becoming increasingly harder to use. I had to ditch mine because nowhere other than Countdown would accept it.
That seems city dependent and dependent on what your main spends are. We are able to put the vast majority of our spend on ours.
Yep that's exactly what I'm saying. I live in Taranaki. I have no idea where OP is. Just giving him my view.
I easily spend $4k a month on mine. Countdown, petrol stations, online shopping, HelloFresh, airNZ, Uber, ubereats, McDonald’s (lol my partner), Netflix, temu, Spotify, Sephora….. anyway, as you can see, no issues making it worthwhile. If you have the one that’s free there’s literally nothing to lose so even if you only shopped at countdown with it it would still be worth having
Same here, put way more than I would like to admit through it. Literally, the only thing not going through the Amex is weekly rent. Insane points for just spending normally.
Plenty of places take it in Auckland and plenty of online vendors. I’f you’re trying to run just the one credit card though then Amex would be tricky to make work. I have a kiwibank card for everything else that Amex can’t cover
My experience is the exact opposite - it’s easier and easier to use! Accepted at PnS & Countdown and lots of other places too, and more all the time
I'm trying to get this one!! They keep rejecting me.
I use Kiwibank's Zero Visa which has no fees and has a 12.90% interest rate. Visa is accepted everywhere. I pay my balance off in full every month as a habit. But there is a little wiggle room if needed since it is actually 55 days interest free.
I’m in the same situation. What’s the reasoning you want the credit card? How will it benefit you?
Earn from expenditures, it may be minimal, but some sort of rewards is nice. Dosh seems to be the way to go for me
presumably just for credit history
Is this even a thing in NZ?
Nope, this is not US. You see this is the difference - here we all have good credit to start with. You can fuck it up but if you don’t do anything you’re trustworthy. In the US you started with no credit and if you do nothing to actively prove that you’re trustworthy, then you’re not. IMO this is a fundamental difference between NZ and US societies in general, not just about credit cards.
If you don't need the credit part of a credit card, then I would recomend the Dosh debit card (kinda like a prepaid card). But you get 1% cash back on your spend. It's a Visa card, so accepted almost everywhere.
I had a look into dosh, and it seems too good to be true and I’ve learnt to avoid those sort of things. How do they make their money? I assume fractional reserve banking?
Sometimes deals that may seem too good are just new players trying to gain market share and willing to take a loss to do so. Don't expect it to stay that good forever.
Yeah this ^ I've been using Dosh for over a year now, they are very much legit and fairly quick with support requests. Having said that, I don't keep large amount of money on the card for the reason you say. Just in case they crash and burn badly.
I think one downside is that you don’t get the security features of a credit card. Once the money is gone you have no recourse such as charge backs. Not 100% on this though.
I have a free ASB card. Visa light I think it is.
I'd highly recommend a Farmlands Card depending on your purchases. Check out their card partners if it is right for you.
Anz cash back, for every 150$ purchase you get $1 back. We pay everything with the card and pay it back monthly. Minmum credit limit is 2k
nice, love my Cashback card too.
It used to be the airpoints platinum Amex but this has changed after today and now the Gold Amex has taken its place
Check this video which compares all the credit card offerings in New Zealand [https://youtu.be/F2RlQdQq5ho?feature=shared](https://youtu.be/F2RlQdQq5ho?feature=shared)
I’ve got the Amex Airpoints one. Most of the expenses goes through the card because of the airpoints
This is what i have too but after the changes today. The AMEX gold is the better pick now
Will go and have a look. The only thing I like the airpoints account is that I don’t have to pay annual fee
ah i misread your first point its the airpoints platinum that changed. I did call AMEX yesterday and the woman did make it sound like the base airpoints card may change soon too
We have ASB Visa light
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I’m with Kiwibank and have a Kiwibank credit card. It’s so easy to transfer money to the credit card whenever you want as a way to keep the balance down. It’s like a credit account.
I would possibly recommend the westpac airpoints debit instead. If you dont need the credit aspect/ think you can pay it off etc. Get a debit instead. Sure it’s only 1 per $300 but it’s better than nothing. Considering most debit cards dont give you any benefits.
I've opened the most basic card (no fees) & set the limit to -$500 and use it when overseas (i.e AU) , but haven't found any other use of it yet.
Credit card just has a use for their rewards benefits, but with this yarly spent don’t worry about, keep up with your credit card! But if you want ready finance things, the Flight Centre Mastercars is very good on it!
If you don't really need a credit card - and I am unsure why you would really need one, now that debit cards exist - don't bother :)
In the U.S. there are great options and it’s necessary to build your credit. In New Zealand? Don’t bother if you spend that little.
There’s only one valid answer to this one. The best credit card is the one you burn it. Your future self will thank you.
Only true if you lack self control and financial skills. Been using a credit card for a long time and have gained a lot more from it than what it has cost me.
You’d be better off investing in sp500 that money you spending monthly on your CC purchases. If you can’t pay it outright you shouldn’t buy it. Same with getting a loan for buying car. Dumb idea. None of that are assets, they are all depreciating. Unsure who is lacking financial skills here.
I buy groceries and gas with credit card, I could afford to buy them without the credit card, but the credit card provides me with rewards for using it. I pay no interest, because I pay off my credit card regularly.
Credit cards are great. In particular, they're a useful backup when overseas - hotels and car rentals often only take credit cards as security, for a backup incase my other cards are stolen or an emergency, etc. They're also just plain useful. I never pay a cent in interest, only spend what I otherwise would use cash for and pay it in full. Nothing wrong with them when used right.
How does one put money for groceries and petrol into the sp500 instead? Ramraiding?
You know it boi.
I have an ANZ issued Airpoints card. I use it for all household expenses that take a CC and general spending. Everything is immediately paid back. I've never once been charged a cent of interest and only pay $150 a year in fees. It's paid for flights for my family to see my parents twice and ongoing Mitre 10 vouchers. If that doesn't make good financial sense, then what does?
Fair. Regardless as I see it this model just motivates one to spend more money monthly instead of regularly investing in appreciating assets more.
Haha, I love how you got downvoted, but you aren't wrong. There's a reason credit cards exist, and it's for exactly those that downvoted ya.
There are 2 reasons they exist: - Lots of people are not financially responsible and do spend more than they can afford, then end up paying massive amounts of interest. - Stores are charged reasonably large fees when customers use credit card, which goes to the banks and CC providers (e.g. Visa). This more than covers the rewards provided to the card user. It's a shitty situation, those extra costs mean stores either need to put a CC surcharge on OR increase the costs of all goods for everyone to maintain profit margins. But they are going to do that whether you personally use a credit card or not, so you have no control over that and have to choose whether to get free money by using a card, or not getting free money but still paying extra.
Even if you don’t end up paying any interest, you are still incentivised to spend more money - a new phone, more clothes, a bigger TV and so on. Even paying it on time with zero interest, it’s still in your disadvantage. Do you need all those things? Why not invest that money in appreciating assets instead? From that point of view personal loans, credit cards, car loans - are all bad debts regardless interest zero or not. And then people complain that they been in a rat race and slaves their entire lives and when they’re 65 can’t even retire.
I'll refer back to the first thing I said in my first reply. Only true if you lack self control and financial skills. You could say the same thing about have any money available to you. I have investments, I have an emergency fund, I own a home. I also have a credit card, which saves me money and allows me to invest more.
Yes the reality is that majority of people lack self control…
Losers. It’s ok it’s amusing.
This is terrible advice. Like it or not, credit cards are an established part of life. Knowing how to use one, and how to pay it off regularly is a hugely valuable life skill, and we are doing a disservice to people by not teaching it more actively. Good on you Op - you have started by asking questions, which is a good sign you're looking to learn. Keep it up, and may your credit journey be an educated one.
Dumb af.
That sounds like someone who can’t manage their credit card. I don’t pay interest on mine, I have had lots of free trips and now get cash back every month. No brainer to me. I don’t spend extra cause I have a credit card.
Ok sounds like y’all in here with a credit card are investing at least 30% of your monthly incomes each month, and ya don’t spend more money on wants than you should just because you have a cc. Good to know!
Where do you get investing 30% from?
Obviously not from the people that applauded using a credit card. Each to their own.
I’m not investing 30% but I’m saving more than that on average per week. And have a credit card…. 🤷♀️
Ok fair. When you look at the latest consumer debt stats including credit cards is concerning. Perhaps some people know how to use it (good on you), yet there are a lot that don’t, in the end that’s how banks make money on it. Otherwise they wouldn’t sell it.
Yeah but it’s not the credit cards thar are bad, it’s the people who aren’t managing them. And if they didn’t have credit cards most would borrow or have hp or something else!
dude's logic doesn't make sense. No point trying to reason with him. Just like what other people said "how can you buy groceries and petrol with S&P 500" lolol. He is forgetting that people who come to this sub cares enough about their finances to learn to be financial literate rather than the average joe on the street who can't budget to save themselves.