Leslie Massey
New Zealand has one of the most widespread uses of electronic payments in the world, and it is not advisable to use US dollars as currency there. While it is possible to use Australian dollars in some places in New Zealand, it is not recommended as the exchange rate will be worse than at a bank. It is better to exchange money at a currency exchange outlet in a major city, or to withdraw New Zealand dollars directly from an ATM.
| Characteristics | Values |
|---|---|
| Official currency in New Zealand | New Zealand Dollars (NZD) |
| Can Australian dollars be used in New Zealand? | No, but some places may accept it with a worse exchange rate than at the bank |
| Best way to get New Zealand dollars | Using an ATM in New Zealand, using a debit card with no international fees, or exchanging Australian dollars in New Zealand |
| Dynamic Currency Conversion | A scheme that encourages merchants to offer international customers the option to pay in their home currency, but it is not beneficial for the customer |
| Credit cards | May incur fees on foreign transactions, including a currency conversion fee of 2-3% as well as big ATM withdrawal fees |
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What You'll Learn
Where to exchange Australian dollars for New Zealand dollars
While New Zealand Dollars (NZD) are the official currency of New Zealand, Australian Dollars (AUD) are widely accepted in the country. However, if you're looking to exchange AUD for NZD, there are several options available to you.
Currency Exchange Outlets
Currency exchange outlets can be found in all major cities in Australia, even in suburban areas. Inner-city outlets typically offer better exchange rates than those in suburban areas or at the airport. You can also exchange currency at a bank, but expect to pay a higher fee, typically around 2.5% above the market exchange rate.
New Zealand
Once you arrive in New Zealand, you can exchange AUD at the airport or in major city centres like Auckland, Christchurch, Wellington, and Queenstown. While it is possible to exchange currency at the airport, keep in mind that exchange bureaus in airports are known for offering poor exchange rates and high fees.
Online Exchange
One convenient option is to order your foreign currency online before your trip. This way, you can either have it delivered to your home or pick it up from a nearby location. Online exchange providers like S Money offer the mid-market rate, which can be beneficial.
ATMs
Using an ATM is another option to obtain local currency in New Zealand. ATMs are readily available at banks, main shopping streets, and malls. However, using a debit or credit card for withdrawals may incur additional fees, including currency conversion fees and ATM withdrawal fees.
Credit Cards
Major credit cards like Visa and Mastercard are widely accepted in New Zealand and can be used at various amenities, including hotels, restaurants, and shops. However, be aware of potential foreign transaction fees and surcharges for credit card usage, which can range from 1.5% to 2.5%.
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Using credit cards in New Zealand
Credit cards are widely accepted in New Zealand. Visa and Mastercard are the most commonly used, but American Express, Diners Club, and Bankcard are also recognised. Credit cards are best for larger purchases, such as car rental deposits, and can be used in most shops and restaurants.
It is worth noting that some retailers will pass on a surcharge for credit card use, usually between 1.5% and 2.5%. This is to cover the currency conversion fee of 2-3% that your credit card company may charge. Some retailers will also ask if you would like to pay in Australian or New Zealand dollars. Be sure to know what currency you are being charged in, as your credit card company may still charge you a conversion fee if you are charged in Australian dollars.
If you are travelling to New Zealand, it is a good idea to inform your bank that you plan to use your card abroad. This will help to avoid any issues with your card being blocked due to suspicious activity.
ATMs are widely available in New Zealand, and you can use international credit cards to withdraw cash as long as your card has a four-digit PIN. Debit cards are also accepted at most ATMs, and it is worth carrying some local currency on you at all times.
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Dynamic Currency Conversion in New Zealand
Dynamic Currency Conversion (DCC) is a financial service that allows customers to pay in their home currency instead of a foreign currency. In New Zealand, some retailers may offer international customers the option to pay in their home currency. This is not always beneficial for the customer, as they may still be charged a conversion fee by their credit card company.
DCC can save customers money in certain circumstances, but this is not always the case. The margin applied to the DCC exchange rate is set by the financial institution processing the charge and can vary from merchant to merchant. In some cases, the DCC exchange rate may be favourable to the customer, but in other cases, the margin applied could result in a worse exchange rate than the one charged by the card issuer directly.
When using DCC, customers are essentially paying for the convenience of not having to calculate the final transaction amount in the foreign currency. However, some customers may not find this convenience worth the potential additional cost.
In New Zealand, all goods and services are subject to a Goods and Services Tax (GST) of 15%, which is included in the displayed price. This tax cannot be claimed back by visitors. Additionally, due to the discontinuation of 1c, 2c, and 5c pieces, purchases in New Zealand are subject to "rounding" where amounts are rounded up or down to the nearest multiple of 10c.
It is important to note that Dynamic Currency Conversion is different from the currency conversion methods prescribed by New Zealand's Income Tax Act 2007 and Goods and Services Tax Act. These Acts require foreign currency amounts to be converted to New Zealand dollars for certain purposes, such as calculating a taxpayer's income tax liability or converting the consideration for a supply.
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Where to get New Zealand dollars before leaving Australia
If you're planning a trip to New Zealand from Australia, it's a good idea to have some local currency with you before you leave. Here are some options for getting New Zealand Dollars (NZD) before departing Australia:
- Currency Exchange Outlets: You can find currency exchange outlets in most major Australian cities and suburban areas. Inner-city outlets typically offer better exchange rates than those in suburban or rural areas.
- Banks: Visit an Australian bank to exchange your Australian Dollars (AUD) for NZD. Banks may charge a fee, and their exchange rates might not be as competitive as those offered by specialised currency exchange providers.
- Online Currency Exchange: Ordering your foreign currency online is a convenient option. You can compare exchange rates from different providers, such as Wise or S Money, and often get the mid-market rate. You can either have the NZD delivered to your home or pick it up from a nearby location.
- Airport Exchange Bureaus: While not typically recommended due to their poor exchange rates and high fees, airport exchange bureaus can be a last resort if you need to exchange money before your flight.
- ATMs in New Zealand: If you don't mind waiting until you arrive in New Zealand, using ATMs with your debit card is a convenient and often cost-effective way to withdraw NZD. Just be mindful of any international transaction fees or foreign ATM fees charged by your bank.
Remember to carry a mix of denominations, including smaller notes ($5, $10, and $20) for convenience when making smaller purchases or using public transportation upon your arrival in New Zealand. Additionally, be cautious of Dynamic Currency Conversion (DCC), where merchants offer to charge you in your home currency. It's usually more advantageous to pay in the local currency (NZD) to avoid hidden markups and extra fees.
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Using ATMs in New Zealand
New Zealand is well-equipped when it comes to card payments, meaning you shouldn't have a problem if your card is from a major network. Your card is likely to work whether it's from the US, Australia, Europe, or anywhere else. If you have a foreign credit or debit card, check what network it's on and use one of the locators to find an ATM near you. ATMs in New Zealand accept Visa, Mastercard, Cirrus, Plus, UnionPay, and Amex cards. Most places won't accept JCB, Diners, Discover, or Rupay cards.
There are over 1,800 bank-owned ATMs in New Zealand, along with numerous others operated by independent networks. The best ATMs for foreigners to use in New Zealand are those owned by popular banks such as ANZ, ASB, Westpac, BNZ, and TSB. These banks have ATMs that happily accept international debit and credit cards.
With a number of New Zealand banks, in addition to a normal limit of $2000 max withdrawal per transaction, there are limits on how much cash you can take out of ATMs each day. For instance, Westpac has a daily limit of $3,000 for domestic withdrawals, and ANZ has a daily limit of $2,000. Your own international bank might set its own limit on how much cash you can take out each day when you're abroad. So before you travel to New Zealand, check with your bank to see how much cash you'll be able to withdraw. It's always a good idea to notify your bank if you're travelling abroad. That way, when you use your card abroad, they won't assume it's been stolen and accidentally block it.
Many of the charges you'll face at a New Zealand ATM won't be from New Zealand banks. Your home bank may charge you every time you use your card abroad, even if it's just to withdraw cash. Before you travel to New Zealand, check what you'll be charged by your home bank for each ATM withdrawal abroad. They may take a percentage of the amount as well as a flat fee. If you have a New Zealand bank account, your bank might charge you if you use another New Zealand bank's ATM rather than one of theirs. However, charges are less common from the ATM-owning bank itself.
It's worth noting that some ATMs keep your card inside while you're doing your transaction, so make sure you don't forget to grab it back after you've withdrawn your cash. ATMs also give you the option to choose currency conversion, either by accepting or declining it. It's usually a good idea to choose 'Without Conversion' or 'Decline Conversion' to avoid any additional fees.
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Frequently asked questions
No, New Zealand only accepts New Zealand dollars (NZD). However, some places in New Zealand may ask if you would like to pay in Australian dollars, but you will get a worse exchange rate than at a bank.
You can exchange your money at currency exchange outlets in major cities and suburban outlets. Inner-city outlets usually offer better rates. You can also exchange your money at an airport, but the rates are often poor.
Yes, credit cards are widely accepted in New Zealand. However, some retailers may pass on a surcharge for credit card use, usually between 1.5-2.5%.
The official currency in New Zealand is the New Zealand dollar (NZD). You can exchange your Australian dollars for NZD before your trip or withdraw NZD from an ATM once you arrive.
