Sizeable Differences in Credit Card Foreign fees revealed
Sizeable Differences in Debit and Credit Card Foreign Purchase Fees Revealed
Fees charged by banks on everyday overseas credit and debit card purchases range from 1.85% to 2.8%, with Kiwibank offering the best deal and SBS Bank charging customers the most.
An investigation by MoneyHub into fees charged by banks and other financial institutions revealed a significant difference in how overseas purchases are converted back into New Zealand dollars. The findings came about after MoneyHub published a report on the best ways to save money when making purchases overseas, either online or in person.
MoneyHub’s Senior Researcher Christopher Walsh said “New Zealanders making a lot of overseas purchases are best to evaluate the fees charged by their bank to ensure they’re not overpaying. There’s currently a big spread in the foreign currency translation fees New Zealanders pay; the foreign exchange and service fees from a US$500 purchase can be threefold using PayPal compared to a Kiwibank credit card.
“MoneyHub researched the fees charged by Kiwibank, BNZ, ANZ, Westpac, TSB, Heartland Bank and SBS Bank. Kiwibank and BNZ offered the best value, with a 1.85% and 2.25% fee respectively on the transaction value when using a credit card, compared to ANZ, TSB and Westpac who charge 2.5%. Debit card fees were generally higher than credit cards, with a range of 2.5%-2.8%”.
“MoneyHub also found PayPal offered poor value for money when making purchases online with fees of 4.00%-4.50 %. However, account holders could manually select an option to use bank foreign exchange rates rather than the PayPal rates whereby only the bank’s credit card or debit card fees would be paid”.
“On the face of it, the differences in fees look small but they do add up. Buying something for US$500 could cost up to $20 less in fees alone if the purchaser picked a fee-beating credit card - PayPal and the Prezzycard’s conversion fees are 143% and 89% higher respectively than the lowest available”.
Beyond the pricing findings, the research contains guidance on avoiding PayPal fees and examples of different transactions with the fees of each payment method clearly outlined. MoneyHub believes the information would prove to be useful for any New Zealander making overseas purchases. The dedicated page would be updated on an ongoing basis.
Story link: Overseas Credit Card Fees