Before you leave
Get travel insurance
It’s a good idea to look into travel insurance before you book your flights. That way you can check your destination isn’t excluded from insurance protection.
As soon as you have confirmed your flights, we suggest you buy travel insurance. That way, you’ll have cover immediately for any unexpected events that could affect your trip. You might even be eligible for travel insurance through your credit card cover if you purchase your flights with the card. Check with your bank for details on how to activate complimentary travel insurance.
Travel insurance companies will often ask you to disclose any existing medical conditions. Honesty is the best approach here. In some situations, non-disclosure may invalidate your entire policy. In other words, you will have no cover at all.
It pays to read the policy carefully so you know what types of activities are excluded. For example, you may need additional cover if you intend to ride a motorscooter, go skiing, or take part in watersports.
Inform your bank
Tell your bank you are going on holiday. Give the departure and return dates and the countries you intend visiting. That way, when foreign transactions start appearing in your bank’s systems, it won’t freeze your card to protect you from what it might think are unauthorised transactions. Make a note of your bank’s emergency contact number just in case something does go wrong and you need to make contact urgently.
SafeTravel is the official source of travel advice for New Zealanders, with advisories for specific destinations. Checking SafeTravel helps you avoid travel blackspots.
On SafeTravel you can also register your details and travel plans. If a crisis occurs overseas, MFAT will contact New Zealanders who have enrolled to check on their safety and well-being.
Sort your money options
Deciding how you hold your money is an entirely personal decision and there are pros and cons with each option. It is always useful to have at least a small amount of cash. Some people prefer currency cards or credit cards.
Make sure you are aware of the fees for each option before you make your decision because they can add up. Your bank should be able to provide you with this information. Some websites offer fee comparisons.
If you intend taking a large amount of cash (such as the bulk of your spending money), you can often convert it into the local currency before you go. The bank will charge you a fee for conversion (usually between $5 and $10), which will probably be uneconomical if the amount is small. Note that the bank also builds a margin into the conversion rate. It is worth comparing the bank’s conversion rate (and fees) with those offered by specialist companies such as Travel Money NZ and Travelex.
Credit and debit cards
Using a credit or debit card overseas potentially incurs two kinds of fees. The first is a currency conversion fee, which usually ranges from between 1.85 per cent and 2.5 per cent of the transaction amount. The second is an overseas ATM fee, which may be charged by your bank. The fee charged by your bank can range from between $2 and $7.50. Note that the foreign bank whose ATM you use may also charge an ATM fee.
The main benefit of ‘prepaid’ currency cards is you can buy the currency (or currencies) you want before you go. This means you can load your card when the exchange rate is good. It also removes the element of surprise about the exchange rate: you don’t have to wait until your credit card statement arrives to see what exchange rate the card company applied to your purchases or withdrawals. However, any funds you have loaded on to the card could be at risk if you lose it or it is stolen and used in a paywave transaction. It is worth checking with your bank on what protections exist for this scenario and whether you can freeze the card if it gets lost.
The drawback of currency cards is the conversion rate. It is often slightly worse than the rate Visa and Mastercard use for debit and credit card transactions. Also, it takes time for money you reload while away to come through, so you need to factor this delay into your planning.
While you are away
Have a back-up
Accidents and thefts can happen while you’re overseas, so don’t rely on just one source for money. Have a back-up in case your wallet is lost or stolen. Keep your back-up separate from your primary card. If your card is stolen or lost, contact your bank immediately.
Home currency and local currency
When you withdraw money from an ATM or make a card purchase overseas, you will commonly be asked whether you want to withdraw in the local currency or your home currency.
It might be tempting to use your home currency (New Zealand dollars) because it’s what you’re familiar with. However, it’s often more economical to select the local currency.
For example, if you were to select New Zealand dollars, your bank may charge you currency conversion and international transaction fees. And secondly, the shop, restaurant or hotel where you present your card will probably use an unfavourable exchange rate to calculate your bill.
If you are using a travel card and have more than one currency ‘wallet’ loaded on your card (eg US dollars and Euro), you can tell merchants which currency you would like to pay in. But it pays to know your balances in advance so you can ensure you have the right currencies available for purchases you wish to make.
Merchants holding funds
Sometimes accommodation providers and vehicle rental agencies will hold funds on your card as a “deposit” or “bond”. If a merchant requires your card for this purpose, we suggest providing your credit card details. If you use a debit card, the merchant may freeze your available funds for up to 30 days, meaning you will no longer have access to that money. By providing a credit card, you still have access to money up to the limit on your card.
If something goes wrong while you are away, you want to be prepared. Have access to your insurance company’s number so you can contact it, should that be necessary. You will need to keep receipts for doctors visits, emergency flights or anything else you will want to claim under your insurance.
Be alert for scams
Travellers can be the target of scams, so exercise care. Here are some of the more common scams:
- Always carefully count what the teller gives you when exchanging money at a foreign currency booth. It is not uncommon for tellers to switch notes at the last minute, taking advantage of the fact the currency has denominations that are similar in colour and design.
- Don’t accept torn, worn or damaged notes if possible. These can be difficult to get rid of later.
- Take photos of rental cars and scooters and check thoroughly for existing damage, showing the hire operator before you leave. This prevents the company from charging you later for damage you did not cause.
- If it seems too good to be true, it probably is. Make sure you buy tickets, souvenirs and transport fares from authorised sellers to avoid being sold a fake.
- Look for ATMs with plastic casing around the slot where you insert your card. These are designed to stop scammers from “skimming” your card details when you withdraw money.
If you become aware you’ve been scammed while overseas, contact your bank immediately. Check out our quick guide on scams for more information.
Bank unaware of scam and unable to give warning
Jamie began corresponding with Sarah through an online dating site. After several months, Sarah told him she was moving to Ghana. Later, she emailed him to say her bag and laptop had been stolen when she arrived in Ghana. She asked him to buy a laptop for her. He did so, and sent it to the address Sarah had given.CASE 2
Woman divulged PIN during ruse by thief
Kiri took a phone call at work from someone saying she had won a $1,000 gift voucher. The caller asked for a four-digit password to redeem her voucher. She gave three, each of which the caller said was already taken. The caller gave her a random password to use and hung up. Unknown to her, her handbag containing two eftpos cards had been stolen from work. The so-called voucher was merely a ruse to try to get the PINs for her cards.CASE 3
Mule scam victim gets compensation over false allegation
Hamish was a beneficiary who did casual work. A man who owed Hamish money asked if he could transfer some money into his account. Hamish would withdraw this amount for him, minus what he was owed and an extra payment for agreeing to help. The man transferred $2,000 into Hamish’s account. Hamish withdrew $1,800 and gave it to him. A short time later, the bank contacted Hamish and told him he was the victim of a mule scam and that the $2,000 was stolen from another bank customer.
By default, money loaded on to New Zealand-issued cards is New Zealand dollars. It can then be converted to the foreign currency or currencies you need on your travels. Most cards let you have funds in several currencies at once. You can generally load money on to a travel card at a branch or online. Processing loads done via internet banking may take two or more days.
If you bought your travel c…
Updated March 2022