The ins and outs of your credit card

Interest charges

What are these?

Interest is charged on the balance owing on your credit card (this will be shown on your statement each month). When and how much interest you'll be charged depends on how you operate your credit card account. It is possible to avoid paying interest altogether!

How to save money

The best thing you can do is to pay your statement's current balance in full by the payment due date. By doing this, you'll take advantage of any interest-free days which apply to your card, and avoid paying any interest on the purchases you make. This does not apply to cash advances, some bill payments and balance transfers.  If you don't pay the full amount by the due date, you'll pay interest on the current balance shown on your statement from the closing date of that statement, and interest on all new purchases from the date of transaction, until the current balance is paid in full. If you find you're paying a lot of interest on your credit card, you may want to consider consolidating your debt with a BNZ personal loan or switch to a low interest BNZ Lite Visa credit card.

Other useful info

  • Interest is charged on cash advances and balance transfers from the date of the cash advance or transfer. Cash advances are when you make withdrawals from ATMs, over the counter at banks, or electronic transfer funds from your credit card account through telephone or Internet Banking to other accounts.  The rate for cash advances may be higher than interest charged on ordinary purchases.

Take-home tip: Always pay at least the minimum payment due. Try to pay more than this – ideally the whole balance.

 

Interest-free days

What are these?

Most credit cards come with a number of interest-free days on purchases. These are usually about 30 days (the statement cycle period), plus a number of days until the payment due date. Many credit cards have up to 44 or 55 interest-free days, (although some credit cards have no interest free days). The number of interest free days depends on when you make the purchase however if you don't pay your balance in full, you will not receive interest free days on purchases.

How to save money

You can take advantage of interest-free days by paying off your credit card statement's current balance - in full - by the due date. By using your credit card and utilising the interest-free days you leave your money in your bank account which earns you interest, or to offset against your TotalMoney home loan.

Other useful info

  • If you make your purchases earlier in your statement cycle, you'll get more days interest-free.
  • Interest-free days only apply to purchases; not to cash advances or balance transfers.

Take-home tip: When you pay off your credit card statement's current balance in full by the due date, you'll get the benefit of interest-free days – and pay no interest on your purchases!

Late payment fee

What is this?

A late payment fee is a charge that can apply if you don't pay at least the minimum payment, shown on your statement, by the due date.

How to save money

To avoid this fee, you need to make sure your payment is received by the bank by the due date.

Other useful info

  • It's a good idea to set up a direct debit for your credit card payments. You can choose to direct debit the minimum payment, or the full amount. (You can still make extra payments on top of the direct debit if you want).
  • If you're posting a cheque, or making an Internet Balance transfer from a non-Bank of New Zealand account, make sure you allow enough time for the bank to receive the payment (and for it to clear) before the due date.

Take-home tip: Make sure you pay at least the minimum payment by the due date.

Cash advance fees

What are these?

Cash advance fees are charged when you use your credit card to withdraw cash from an ATM, over the counter at banks, or electronic transfer funds from your credit card account through telephone or Internet Banking. Cash advance fees are generally charged regardless of whether your account is in credit or debit. They can also be charged when you make a bill payment from your credit card via Internet Banking. Cash advance fees are charged to some bill payments, so it is best to check this before you make a payment.

How to save money

You can avoid these fees altogether by not making cash advances with your credit card. Or if you do, keep fees to a minimum by using Bank of New Zealand's own ATMs.

Take home tip: Cash advances from your credit card can be used effectively as an emergency short term loan. It is quick, convenient and there's no application required, plus you won't be charged the establishment fee charged by some personal loan providers.

Over limit fee

What is this?

An over limit fee may be charged if your account is in excess of your credit card limit. To avoid the embarrassment of having your credit card declined, Bank of New Zealand may use its discretion to allow you to go over your credit card limit from time to time.

How to save money

Keep track of the available credit left on your credit card. You can do this through Internet Banking.

Other useful info

  • You can apply for a credit limit increase if you think you'll be increasing your spending (e.g. going overseas on holiday). Apply via Internet Banking or calling the toll free number on your Bank of New Zealand credit card.
  • If you've made a purchase and realise you've gone over your limit, you can make a payment that same day through Internet Banking to avoid being charged a fee.
  • You'll continue to be charged the fee on every statement cycle that you remain over limit.
  • Make sure you understand your credit card fees.

Take-home tip: know what your credit card limit is, and keep an eye on your balance via Internet Banking.