Whether you’re moving to New Zealand or just want to visit the country, you’ll probably have to transfer money to your destination to fund your time there. Maybe you’re asking the question “what’s the cheapest and best way to send money to New Zealand from the UK?” or “what’s the cheapest way to send money from Australia to New Zealand?” it doesn’t matter where you’re moving from as everyone wants to send their money to NZ at the best rate possible. Bungling that process is all too easy, though, so you should read up on some common mistakes if you don’t want to wind up penniless.
Transferring Money Through Your Bank
A common mistake people make when moving overseas is to transfer their money through a bank. Most banks charge hefty fees for currency conversions unless you’re a VIP member, and these fees may include a processing surcharge on top of a percentage of the money transferred. Also, banks rarely apply the most accurate exchange rate when converting money, ensuring they can keep a slice of your funds for themselves. If you must use a bank, it’s better to convert your funds electronically rather than dealing with cash since electronic transfers have better exchange rates. You can read more about moving your money to New Zealand in our guide.
A foreign currency specialist such as OFX is almost always a superior bet. Based in New Zealand (with offices around the world), OFX offers better exchange rates than banks and doesn’t charge commission fees. OFX also provides seamless online transfers at any time. Travelers can simply open an OFX account for free if they send the company their passport or ID, and they can order New Zealand Dollars directly to their bank account in exchange for their personal funds. Another advantage that foreign currency specialists have over banks is that they sometimes provide free transfers above a certain threshold. You can read more about our exclusive special offer with OFX and why they are our #1 recommended currency transfer specialist.
Failing to Plan Your Expenses Well
While in New Zealand, how much money will you have for food, housing, and transportation? Will you have emergency funds in case of an accident? Travelers are often surprised by how fast they burn through money, so make sure you give yourself some comfortable padding before heading to New Zealand. For the first few weeks, you should set aside a couple thousand dollars. Bringing too much cash is unwise, though, since you can lose it easily and people can steal it. If you bring $10,000 or more in cash, you must declare it before entering the country, or the funds may be confiscated.
What about credit cards or traveler’s checks? Both have their pros and cons. Credit cards are simple and easy to handle, and you can cash in traveler’s checks at any bank or currency exchange in New Zealand. However, credit cards can have currency conversion fees, and both credit cards and traveler’s checks are easy to lose. One convenience of credit cards is that you can time your use of them with fluctuations in the exchange rate. If you’re worried about the exchange rate turning against you while you’re in New Zealand, you can always get a forward contract. Forward contracts fix the exchange rate at the time of your choosing, allowing you to withdraw money at that rate throughout the duration of your stay.
Using Currency Conversion Booths
Most commercial airports have booths where you can convert your money to the currency of your destination. These booths might be tempting for sleep-deprived travelers desperate for cash, but they’re hardly cost-effective. They tend to have high transaction fees and lousy exchange rates. Even if they offer a free commission and no fees, they’ll most likely make up the difference with an extra-high exchange rate. After all, an airport is a captive market; these booths don’t have much competition. If you must use a currency conversion booth, try ordering New Zealand Dollars online so you can pick them up when you arrive at the airport. This service tends to feature better exchange rates.
An underrated alternative to currency conversion booths is an ATM. Although airport ATMs have high fees and the exchange rate may not be ideal, they’re often better deals overall. Just avoid selecting the dynamic currency conversion option at ATMs since the exchange rates for this service are often terrible. If you want to save money, you should also wait until you’re out of the airport before using an ATM. Many hotels have ATMs or currency conversion areas that offer good rates and low fees to make your experience there more enjoyable.
Making Small Exchanges
While preparing for your trip or move to New Zealand, you may feel compelled to stifle your spending urges in advance by transferring small amounts of money to the country, but this approach has disadvantages. If you keep making trips to an ATM or currency converter while in New Zealand, you can rack up a ton of fees in no time. Also, you’re apt to miss out on the discounts and fee waivers that conversion services sometimes offer for large sums. Try to figure out a realistic amount you’re likely to spend in New Zealand, and transfer it all at once.
If you plan to stay in New Zealand for a long time or make several repeat visits, you should open a no-fee bank account in the country. That way, you can enjoy a better exchange rate when you transfer funds from your home bank to your overseas one, and you can pay for goods and services with a convenient bank debit card. You can even arrange for a currency broker to alert you to favorable changes in the exchange rate.
Overusing Credit Cards
Credit cards are a constant temptation when traveling because they’re so effortless to use. It doesn’t take much to rationalize an extra swipe of the plastic if you’ve had a few drinks and are in a self-indulgent mood. Unfortunately, most credit cards have staggering interest rates, and you’ll likely have to suffer high transaction fees and terrible exchange rates as well. If you get your hands on a prepaid travel card or a credit card with travel benefits, you can avoid going broke in New Zealand.
Many people feel overwhelmed by the minutiae of travel, and they can get sloppy when transferring their funds. Don’t make that mistake when visiting New Zealand. Avoid predatory currency conversion services, and plan for expenses in advance. That way, you can enjoy the country to its fullest without burning a hole through your wallet.
I’m Jenny and I whilst I love being an expat in Auckland I could not find any reliable advice or guides online from someone who had actually made the move to New Zealand. So I decided to create this blog which offers free advice for expats by an expat. Hopefully you will find everything you’re looking for (and what I wish I knew before) here but if you can’t please do contact us.