Summary: What Happens When a New Zealander Swipes a Credit Card in the US?
If you’re from New Zealand and you find yourself in a bustling New York café, swiping your Kiwi credit card for a flat white, you’re probably wondering: how exactly do those US dollars turn into NZ dollars on your bill, and what hidden costs are lurking in the shadows? This article walks through the messy, sometimes surprising reality of using a New Zealand credit card in the States, including the way exchange rates are applied, where international transaction fees sneak in, and what to expect based on my own hands-on experience. Along the way, I’ll share real screenshots, expert opinions, and a peek into how global trade and banking standards shape what you actually pay.
How It Works, Step by Step (And Where It Gets Confusing)
Step 1: You Make a Purchase in the US
Let’s say you’re at a Target in Los Angeles, picking up some essentials. At the checkout, you hand over your New Zealand-issued credit card (maybe it’s from ANZ, Westpac NZ, or ASB). The cashier swipes or taps it—no drama so far.
The payment terminal recognizes your card as international, but processes the payment in USD. The moment you complete the transaction, the point-of-sale system sends the charge to the US merchant’s bank, which then pushes the transaction through to your card’s international payment network—usually Visa, Mastercard, or Amex.
Step 2: The Magic (and Mystery) of Currency Conversion
Here’s where it gets interesting. The payment network (let’s say Visa) takes the US dollar amount and converts it to NZD, using the Visa daily exchange rate. This rate can change by the hour, and it’s rarely the same as what you’d see on XE.com or Google—Visa and Mastercard set their own rates, which you can actually check online:
In practice, the amount you see on your statement will reflect the exchange rate on the day your transaction is processed (which is sometimes the day after you made the purchase, if there’s a delay).
Personal anecdote: I once bought a $40 concert ticket in San Francisco, and the pending transaction on my app showed NZD $64.20. By the time it cleared two days later, it showed NZD $65.12—because the NZD had weakened against the USD in that short window.
This volatility means you don’t always know exactly what you’ll be charged until the transaction settles. It can be a little maddening, especially if you’re budgeting for a trip.
Step 3: International Transaction Fees (Where Banks Make Their Money)
Now, most New Zealand credit cards tack on an “international transaction fee”—typically around 1.85% to 2.5% of the converted amount. This fee is charged by your issuing bank, not Visa or Mastercard.
For example, ANZ NZ's fee schedule makes it clear: every overseas transaction (including online purchases in foreign currency) is hit with a 1.85% conversion fee. Westpac NZ commonly charges 2.5%. Some premium cards offer no fees, but they’re rare and usually come with steep annual charges.
Here’s a real screenshot from my ANZ credit card statement after buying a $100 item in the US:
You can clearly see the “Foreign currency conversion fee” line right after the converted purchase amount. It stings a little, but it’s standard practice.
Step 4: Statement and Settlement
A few days after your purchase, you’ll see the final NZD amount on your credit card statement—this includes the converted price plus the international fee. If you used PayWave (contactless), Apple Pay, or Google Pay, the process is identical—the underlying card network handles the conversion, not the phone app.
If you’re like me, you might double-check the math. A quick calculation (USD purchase x Visa rate x 1.85%) usually matches right up. But sometimes the numbers are off by a few cents, thanks to rounding or slight day-to-day exchange rate shifts.
Real-World Example: The Good, The Bad, and The Annoying
Suppose you buy a $200 pair of shoes at a US store. On the day of purchase, Visa’s published rate is 0.61 (USD/NZD). Here’s the breakdown:
- USD $200 = NZD $327.87 (using Visa’s rate, not the “market rate”)
- International transaction fee at 1.85% = NZD $6.07
- Total on your NZ card: NZD $333.94
If you check the “market rate” (often shown as 0.62), you’d expect NZD $322.58. That’s a $5 difference—Visa bakes in their own margin.
Some travelers get caught off guard here. I’ve seen forum posts (like on FlyerTalk) where people are shocked by the final amount. Always check your card’s fee schedule before you go.
Why Are There Differences Between Card Networks and Banks?
This is where international standards—and their quirks—come in. Visa and Mastercard are global payment networks, but every issuing bank (ANZ, Westpac, etc.) sets its own policies on:
- What fees to charge
- What rate to apply (they must use the network’s “official” rate, but can add their own margin)
- How and when to process transactions
According to the Bank for International Settlements (BIS) guidelines, international card payments must be transparent—but “transparency” still allows for banks to add their own fees and margins, as long as they disclose them.
In trade, these “verified” rules are even stricter. The WTO’s General Agreement on Trade in Services (GATS) and the OECD’s Consumption Tax Guidelines both push for cross-border fee transparency and fair competition—but local banks still have leeway.
Table: "Verified Trade" Standards by Country
| Country/Org | "Verified Trade" Name | Legal Basis | Enforcement Agency |
|---|---|---|---|
| New Zealand | Fair Trading Act 1986 (Disclosure) | Fair Trading Act 1986 | NZ Commerce Commission |
| United States | Truth in Lending Act (TILA) | 15 U.S.C. § 1601 et seq. | Consumer Financial Protection Bureau (CFPB) |
| European Union | PSD2 (Payment Services Directive) | Directive (EU) 2015/2366 | EBA, National Regulators |
| WTO | GATS Section V (Payments & Transfers) | GATS Article XI | WTO Secretariat |
Even with all these rules, the consumer experience is still shaped mostly by your bank’s choices. Some fintechs (like Wise or Revolut) now offer multi-currency cards with no international fees, but most “big four” NZ banks stick to the traditional model.
Case Study: Disputing a Charge—What If Something Goes Wrong?
A friend of mine, Sarah, bought a camera in San Diego using her Westpac NZ credit card. The shop accidentally double-charged her. She called Westpac, and they told her the dispute process could take up to 45 days. When the refund finally came, it was less than the original charge—because the NZD had strengthened in the meantime, and the refund used the new (less favorable) exchange rate.
It’s a small but real risk: exchange rate movements can work for or against you, even with refunds. It’s all in the fine print—Westpac’s official T&Cs spell it out.
Expert View: How Banks Justify Their Fees
I reached out to a former ANZ NZ product manager, who told me: “The international transaction fee is partly to cover currency risk and processing costs. But yes, it’s also a revenue stream, and most customers don’t realize it until they travel.”
I also found this bit from Consumer NZ—they warn travelers to compare cards and consider using debit or prepaid travel cards to avoid unnecessary fees.
Personal Tips and Lessons Learned
- Always check your card’s fee schedule before you travel. It’s usually on the bank’s website.
- If you’re making a big purchase, compare the “pending” amount in your app to the final amount a few days later. This will clue you in to how much rates can shift.
- Consider a multi-currency or “travel” card if you spend a lot overseas—Wise, Revolut, and sometimes Air New Zealand’s OneSmart card have better rates and lower (or zero) fees.
- Never take an ATM’s offer to “charge in your home currency”—that usually results in a worse exchange rate than letting your bank handle it. (This is called “Dynamic Currency Conversion,” and it’s a notorious rip-off—see CFPB FAQ.)
Conclusion: The Bottom Line (And What I’d Do Next Time)
Using a New Zealand credit card in the US is dead simple—but the costs can sneak up on you. Expect your purchase to be converted by Visa or Mastercard at their daily rate, and for your bank to slap on an extra international fee. The real-world exchange rate you pay will always be a bit less favorable than what you see on Google, and those fees add up over a long trip.
A little prep goes a long way: read your bank’s disclosures, check the card network’s rate calculator, and consider a specialist travel card if you’re going to rack up a lot of foreign charges. And if you ever get a refund, remember that currency swings can mean you get back less (or more!) than you spent.
If you’re planning a big overseas trip, it’s worth calling your bank to ask about fee waivers or better travel options. Or, if you want to dodge the system entirely, experiment with fintech cards (just be sure to read their fine print too).
Personally, after a couple of “ouch, that’s expensive” statement surprises, I now use a Wise card for most US purchases—no international transaction fees, and the rate is usually within 0.5% of the market rate. But for emergencies, my old ANZ credit card is still in my wallet.
For more on this topic, check out:
- Consumer NZ: Credit Card Fees Explained
- Visa NZ Exchange Rate Calculator
- Mastercard Currency Converter
Next time you’re swiping in the States, check your app, do the math, and don’t be afraid to ask your bank for a better deal. It’s your money, after all.