Air New Zealand is a quality brand. I like their in-flight snacks, don’t mind paying slightly more for their reputation of reliability compared to their domestic route competitor JetStar, and I appreciate their creative safety videos and the fact they are slightly more interesting to watch multiple times.
Then there is POLi. POLi sounds friendly.
If you can use POLi, it saves you from Air New Zealand’s excessive credit card surcharge fees by letting you use a bank transfer to pay for flights. You can’t use it if you’re in New Zealand and have a Mac. This rules me out. Apparently the Australian POLi now works with Macs fine.
Interestingly, Air New Zealand isn’t even listed in that Stuff article, even though they’re likely the biggest company using POLi in New Zealand, and are featured on POLi’s website.
Providing your log in details to a third party will be in violation of the internet banking terms and conditions you’ve agreed to, and potentially opens you up to being liable for losses.
There is the possibility of an additional motive going on here: banks sell credit and debit cards, and those cards make them money. POLi is quite an attractive alternative because it saves you something like $8 on a return domestic flight.
Air New Zealand’s Surcharging
This surcharging is extortive, misleading, and unlike airplanes that come on time, Peter Jackson spoofs, and free-but-not-really-free cookies, doesn’t endear Air New Zealand to me. Especially on domestic flights.
It’s presented as a transaction charge to recover costs (“Air New Zealand needs to recover this cost”), but it gets charged multiple times in the same card transaction. When I pointed this out to Air New Zealand they ignored me.
Air New Zealand pay something to accept credit cards, but that is not $4 per person flying, per direction they are flying. Instead of passing on the percentage they are actually charged, which Bernard Hickey’s industry experts say would be less than 1%, they charge a fixed fee multiple times in the same card transaction.
A group booking shows how ridiculous this gets. I once flew with a dozen or so people, and each person was charged $4 there, and $4 back, even though the flights were booked over just two transactions. To their credit Air New Zealand refunded close to $100 of fees after I called them.
Air New Zealand even issued a press release in 2008 chastising Pacific Blue for, among other things, their $4 per sector card surcharge because Pacific Blue offered no alternative payment. Kind of like what Air New Zealand does to Mac users. Or what they do to anyone following the advice of banks. (I’m ignoring Airpoints and Travelcard as payment methods because they aren’t accessible forms of payment for a lot of people.)
The ComCom have “investigated” the matter, concluding that the “card payment fee is used to recover all of the direct and indirect costs associated with credit cards payments.” The key word here being indirect, I think.
To be fair to Air New Zealand, JetStar charges $5 per flight for card transactions, but let’s be honest, JetStar are a hot mess, and Australian, and you shouldn’t be booking with them anyway.
Either way, it’s interesting to see these surcharges creep up over time, for cost recovery purposes, I’m sure. Are the airlines poor negotiators when it comes to their merchant agreements? I wouldn’t think so.
Last month I posted about what I hate about banks. I mentioned ASB was trying to convert me to a tertiary account. Here’s some clarification around that, courtesy of ASB:
Tertiary accounts are available to anyone going past normal schooling to study, regardless of whether they are over 18.
Headstart (youth) and the Tertiary account have the same fees – both have no transaction fees.
When you turn 19 a Headstart account migrates to a Streamline account that has more fees. The reason for the campaign is to direct students to a Tertiary account if they’re eligible for one.
Damien Leng, Head of Transactions says “We try to outline the full services of the tertiary account so that you know these are available to you when you are 18” and “I think we could be clearer with what is available to under and over 18’s”, which is great.
Here is a New Zealand Herald article that contains some shitty and some good advice about money.
Buying over renting
Buy property young, preferably in your 20s. Move heaven and earth to get the deposit. Rent is wasted money.
Buying a house is not for everyone. Sometimes it doesn’t make financial sense for a particular person. Insurance, rates, money spent on repairs (~$5k~ a year) etc. sometimes make renting a better choice. Run the numbers.
It’s moronic to incur fines. Like the maniac driver in a big red American-style pickup truck who overtook me on State Highway 2 on December 17, just to be pulled over and fined.
Yes, you shouldn’t speed etc. etc., but this doesn’t contain any useful advice if you do get a fine. Actual advice would be to set up an automatic payment account to a ‘Stupid mistakes’ savings account so you have money to pay inevitable fines.
NEVER SPEND MONEY EVAAAA
Every dollar is precious. Think before you spend it.
I regret frittering money on coffees and unnecessary eating out. It would be better to direct that money towards savings.
Needs and wants are often confused. This is perhaps the biggest financial mistake that people make.
If you enjoy a coffee a day, buy a coffee a day. If you enjoy eating out, eat out. There’s no point earning money if you don’t spend it on stuff you love. Cut back on the stuff you don’t care about, optimize existing spending (subscriptions and phone/internet/TV/power etc. plans) and/or earn more money.
Track your spending. You can’t budget if you don’t know what you’re spending.
Perhaps the most popular piece of financial advice ever given out. How many people who write this actually do in it in practice, I’m not sure. Tracking your spending by typing into a spreadsheet or basically anything with mainly manual entry is doomed to fail. Xero with BNZ and ASB by itself both offer spending tracking services within online banking. Or, Xero allows the import of other bank’s transactions. Do mainly electronic transactions (because they can automatically coded into categories) and use these.
Credit cards make you look rich. Anyone can live well for a few years, but the debt catches up.
Credit cards with benefits that are automatically paid off each month are excellent.
People are too quick to judge others’ financial decisions, me included.
1) No one wants unsolicited advice. 2) You have your own problems to worry about.
Pay your taxes on time. The IRD has a big stick.
Pay all bills on time. Automate them. The IRD and other companies are always up for negotiation around deadlines.
Spending money on experiences is good spending. I am eternally grateful that I sold all but one of my shares at age 22 (by coincidence in August 1987) and went backpacking through Latin America. It’s good spending if the experience enriches life.
Yes. Also, give experiences as presents instead of physical things.
Save for things. Automatically.
Save before you buy. A bit of a radical concept in 2011, but it can change people’s financial future.
Enter into interest-free deals cautiously
Interest-free hire purchase deals are for suckers. You still pay ad establishment fee and the majority of people fail to clear the debt on time and pay interest anyway.
These places invariably have great clauses such as charging you if you pay anything over the set monthly amount. Once you’ve finished paying the item off you get mailed offers from the company for ever and ever.
Interest payments on personal loans, credit cards and HP are “idiot tax”. Why throw money away unnecessarily?
Work out how much something will really cost when interest is added before jumping into these. There’s calculators online that will help.
KiwiSaver is good.
Get in it.
Take your advice from people who have been through several cycles. Johnny-come-latelies going through their first financial cycle underestimate the risks.
Ask older people what they would have liked to have known at your age. What would they save for if they could turn back the clock?
Read a book
You can learn more about money. The easiest and cheapest way to improve your knowledge is to get a book out of the library.
Update 28 September 2012: This post was written before I started working for a bank (who I love dearly), and at least some views expressed in this post have changed since then (eg. case-insensitive passwords (and ASB isn’t the only bank that does this) are irrelevant when users are locked out after three incorrect login attempts–Facebook does something similar to this, accepting the actual password, the password with the first letter capitalized (to account for automatic capitalization on mobile devices), and the password with the case of letters reversed (to account for the caps lock key being on), and that a charge for a bank cheque is not so unreasonable in the context of a lot of bank cheques being for a large amount). Also some bank policies have changed since this post was published (eg. ASB no longer charges $2 for automatic payments added/amended online–progress!) There is, however, no way of getting around ASB’s $0.20 fee for a Netcode over-$500-transfer-authorization if you don’t have a token–it is charged even if you call the 0800 number and ask them to release the payment. Except for a note regarding the previous sentence, this post hasn’t been edited from the original form.
And useful (see: next day bank transfers).
I’m with ASB and they are great, however no one is perfect. Here’s some things that I hate about banks in New Zealand. Many of these problems are shared by the entire industry.
Or the fact that ASB keeps trying to convert me to one even though I’m not allowed one.
Here’s mailer number one, received the week of my 17th birthday:
And mailer two, from today:
Irrelevant: check. Impersonal: check. You know how to make a guy feel special ASB. (Case in point: I’m not 18 so they couldn’t give me my own credit card even if they really really wanted to).
This is upsetting because I have a feeling tertiary accounts have less fees than youth accounts. At least, it isn’t emphasized that service fees apply to tertiary accounts like it is for youth accounts on ASB’s fee exemption page. Service fees apply for everyone, see comment from ASB below.
Stupid bank fees
ASB isn’t the only bank that charges stupid fees, but here are some examples of theirs:
$2 to set up or amend an automatic payment or add a person you might want to transfer money to again (like the power company, or mum). Online. On the internet. Changing an entry in a database. By yourself.
20 cents for each time you use Netcode, ASB’s text verification service, which you can choose to happen on login. Google, who isn’t even in New Zealand doesn’t charge for this (see below). Probably get charged 20 cents again by your mobile service provider for receiving the text. Some sort of verification is required for some transactions that take you over a $500 daily transfer limit, or if you’re sending money overseas. Alternatively, you can ring their call center to get transactions verified for [email protected]!! I wonder if the time of the person you speak to on the phone is worth less than 20 cents?See update at top of post–20 cents is charged even if you call the 0800 number.
Alternatively you can pay $12 a year for a physical Netcode token, which you’d need if you are regularly out of cellphone reception and probably if you travel overseas. RaboDirect provides these for free. BNZ provides the NetGuard card for free.
5 cents for each email alert. For the virtual stamp. Or the person who licks it. Or something.
20 cents for text alerts and text banking. I think they charge you when they receive a text banking message from you. Plus you probably get charged to send texts to them by your service provider. In contrast, Westpac provides a certain number of text alerts free per month as long as you log in to online banking that month.
$5 for bank cheques. Plus because you probably have an “electronic” account, and if you’re not a youth/student, a fee of $3 because that’s a manual transaction.
“Please note, your password must be eight characters long, and contain at least two letters (a-z) and at least two numbers (0-9). For example, redbus73 and 8cube224 are valid passwords.”
This is ASB’s. I assume other banks are as ridiculous. Would you like a nine character password? YOU CAN’T. MUST BE EIGHT.
Microsoft’s (now defunct) password checker says both of their examples are weak. ASB lets you use both of their examples as real passwords, because security.
Here’s an entry form I picked up from BNZ’s tent at The Show:
Note the classy clause at the bottom: “By providing your details, you consent to use contacting you about our products, services and promotions, from time to time (including via text message without an unsubscribe facility).”
Once you’re in, they have you.
I guess if you rang them they’d remove you from their text messaging scheme, but really, why not let people unsubscribe via text using common keywords like stop, or unsubscribe?
Visa Debit cards
And their annual fees. $10 a year for having the card. National Bank got half of the memo and isn’t charging the annual fee if you have their Freedom account. But you have to be earning $30k+ a year and pumping it into that account. Anyway, I like the image they’re using in their ads for it (see top image).
Sure, debit cards are great if you are under 18 or don’t trust yourself with a credit card. But really, if you can, you should just get a credit card.
Banks (looking at you Westpac and BNZ) seem to love converting people to these debit cards, even if the person already has a credit card with the bank. I don’t understand. Family members have received Visa Debit cards in the mail from Westpac, even though they have a credit card with Westpac. If you already have a Visa or credit card, why would you want a Visa Debit?
It’s a bit of a have, because people naturally think this is their replacement EFTPOS card and start using it, probably not realizing that once they start using it they’re going to be charged an annual fee. If they’re lucky, maybe the fee will be waived for a year or two!
When you go into BNZ to request an EFTPOS card, the tellers like to order you in a Visa Debit card instead*, because, you know, they know best.
*May have happened just once.
Lack of security
That’s Google’s 2-step verification programme.
There’s a number of ways to use it. I have the Google Authenticator application on a couple of devices (it works without needing an internet connection), I can get a code sent to me by text (for [email protected]@) if the application isn’t working, I can use the backup codes if I have to, and I can tell Google that it doesn’t need to ask me for a verification code on the computer I’m using for another 30 days if I trust it.
It works, it’s good, it’s free. And it’s not even protecting my money.
Side note: security has to actually be built-in by design and be compulsory for it to be useful. Kerry Thompson points out that security conscious people probably have limited use for 2-factor authentication systems, because they already take precautions. The people who aren’t security conscious are also the people who don’t think they need 2-factor authentication, they think they’ll be covered by the bank, or won’t use it because of the cost (hi ASB’s 20 cent per text charge).
See also: Google doesn’t have an eight character password policy and Google gives a detailed account of recent account activity (ASB shows the last time I logged in, but I rarely look at it, and out of context it’s kind of useless).
How about encouraging people to set up an automatic payment to a savings account every pay period and sign up for Kiwisaver?
Also, you would think an application that consists of one button would be easy to set up, but Westpac’s Impulse Saver requires you to apply to use it, and makes you wait for a callback from a customer service person.
Phone banking on mobiles
Westpac and BNZ seem to be the only two banks who try to ban calls from mobile phones to their phone banking numbers. It’s trivial to get around this with Westpac, just call their main 0800 number and press one to get to phone banking. On BNZ it seems like that works too, at least after their call center hours.
Visa and MasterCard undermining credit card PINs
Visa and MasterCard aren’t banks, but whatever.
McDonald’s, in association with Visa and MasterCard has the policy of not requiring a PIN or signature for credit card transactions under $35.
How they can guarantee security, I’m not sure, because they just took away the only security of a PIN or signature. I’m not sure why Visa and MasterCard don’t make this opt-in or opt-out.
Zero liability can’t apply if you don’t realize there’s a fraudulent charge on your statement, so good luck everyone.
Next day bank transfers
Or please stop relying on a cron job for transfers.
10 years after one-off payments were introduced, they still take up to the next business day to go through to accounts at other banks. I realize this might require some consultation with the People In Charge Of The Money, but can we please get rid of this? Thanks. Also, could we please do transfers on non-business days to accounts at other banks and get rid of the 10pm cut off for not-my-bank transfers?