More currency, banking and credit card investigations
One of the challenges we are going to face is how to get money to and from New Zealand easily. We definitely will need a New Zealand bank account (National Bank) and a currency exchange company (HiFx), but the last piece of the puzzle is US bank accounts. There are a lot of issues surrounding US based and foreign based bank accounts and credit cards. Some of these are tax based, for instance the US Government wants you to report any foreign bank accounts that total $10,000 or more to them since they often have no way of finding out about these due to secrecy laws. They are very big on cracking down on offshore transactions in recent years and will aggresively pursue you if they find out about some money you have stashed somewhere and may not be reporting. I will write up a big entry on taxes soon.
We have a large number of accounts at various places like Citibank and our brokerage firm. We have decided to keep the brokerage account which we will have any US based consulting income direct deposited into or mailed to our financial advisor to deposit for us. A lot of these checks will originate in the US and getting them over to New Zealand is a hassle and will incur currency exchange rate fees. We also don't necsesarily want all our money in NZD. We also have a NetBank account (www.netbank.com) which is used as a US based checking account with a money market savings account attached. This is a nice way to easily manage short term expenses with a great internet enabled site. It is easy to transfer money to other accounts from this account and we also have a Visa check card that we can use anywhere in the world. One word of caution regarding credit cards overseas. Many of them charge hidden convienence fees of 3-5% and some don't even itemize these on your bills. This fee combined with the fact that they don't always give you the exchange rate published in the papers, make it difficult to use most credit cards overseas in an effective way.
We also have a PayPal account that one of our businesses (www.cardshark.com) gets most of its money into. We can use our PayPal mastercard and only get charged a 1% cross border fee and actually get close to the published exchange rate also. We also get 1.5% cash back on purchases due to being in their preferred debit card program. I think they lowered the rate to 1% for new people, but we got it a long time ago. This makes it so that we get about .5% cash back whenever we use the card overseas. We will probably use this for credit card purchases most of the time and experiment with the NetBank card to see how much we really get charged. Since neither are credit cards, but rather debit or check cards, they feed from our balance and also may have different fee structures than full credit cards.
The last piece of the puzzle is to get some spending money for the first few weeks we are there. Almost all banks offer some sort of program for a small fee to get cash in any currency for their customers. NetBank partners with another site that will send you currency to your house (usually in 1-2 days). They usually charge about .04-.05 off the published exchange rate which is about 3-4% or more. Since it is just a small amount of money it is not a bad idea to do this until we can get a bank account set up and get HiFx to transfer a larger amount of money into our local Auckland bank account.
Matthew
We have a large number of accounts at various places like Citibank and our brokerage firm. We have decided to keep the brokerage account which we will have any US based consulting income direct deposited into or mailed to our financial advisor to deposit for us. A lot of these checks will originate in the US and getting them over to New Zealand is a hassle and will incur currency exchange rate fees. We also don't necsesarily want all our money in NZD. We also have a NetBank account (www.netbank.com) which is used as a US based checking account with a money market savings account attached. This is a nice way to easily manage short term expenses with a great internet enabled site. It is easy to transfer money to other accounts from this account and we also have a Visa check card that we can use anywhere in the world. One word of caution regarding credit cards overseas. Many of them charge hidden convienence fees of 3-5% and some don't even itemize these on your bills. This fee combined with the fact that they don't always give you the exchange rate published in the papers, make it difficult to use most credit cards overseas in an effective way.
We also have a PayPal account that one of our businesses (www.cardshark.com) gets most of its money into. We can use our PayPal mastercard and only get charged a 1% cross border fee and actually get close to the published exchange rate also. We also get 1.5% cash back on purchases due to being in their preferred debit card program. I think they lowered the rate to 1% for new people, but we got it a long time ago. This makes it so that we get about .5% cash back whenever we use the card overseas. We will probably use this for credit card purchases most of the time and experiment with the NetBank card to see how much we really get charged. Since neither are credit cards, but rather debit or check cards, they feed from our balance and also may have different fee structures than full credit cards.
The last piece of the puzzle is to get some spending money for the first few weeks we are there. Almost all banks offer some sort of program for a small fee to get cash in any currency for their customers. NetBank partners with another site that will send you currency to your house (usually in 1-2 days). They usually charge about .04-.05 off the published exchange rate which is about 3-4% or more. Since it is just a small amount of money it is not a bad idea to do this until we can get a bank account set up and get HiFx to transfer a larger amount of money into our local Auckland bank account.
Matthew
Labels: banking, credit cards, currency exchange, finance, money, new zealand
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