Cards costly but convenient

By CLAIRE TREVETT

Credit cards - the most popular way for New Zealanders to spend money overseas - are also the most expensive.

Credit card charges came under scrutiny this week with the announcement of a Commerce Commission prosecution of several banks for hiding fees on the use of credit cards overseas.

But several regular travellers told the Weekend Herald they would still choose credit cards for convenience, even though they attract up to three times the bank fees of traveller's cheques or cash.

Statistics New Zealand's Survey of Returned Travellers showed that credit cards were used for more than 40 per cent of the $2.7 billion in overseas spending by New Zealand travellers in the year ending June 30, 2003, compared with traveller's cheques, which made up 3 per cent. Foreign currency taken overseas made up 17 per cent of the spending.

In the early 1990s, credit cards and traveller's cheques were equal, on about 25 per cent each.

Tim Anderson, spokesman of CardWatch, said travellers would pay more attention to fees because more people were travelling, and shopping abroad via the internet, which attracted the same currency conversion fees.

He said it could be a lot cheaper to use normal eftpos cards which had lower conversion rates, with no charge to a credit card scheme provider and no interest on cash withdrawals.

One regular traveller said convenience would always win out over fee savings. There was no need to constantly change currency when moving from country to country, and no time wasted hunting out the best exchange rates.


Hidden costs

What you can expect to pay in fees for every NZ$1000 spent overseas

* Cash in foreign currency: $10

* Traveller's cheques: $10

* Credit card: $20-$29.50

* Cash advance on credit card: $25-$37.50

* Cash on eftpos card: $15-$27.50

Source: Weekend Herald survey of four major banks