A post on X in October 2026 mocked a 31-year-old American for still paying by debit card. The replies, rounded up by BuzzFeed, made the US case for credit. It builds your score, it’s safer if the card is stolen and it pays rewards.
Each point holds up in the US. myFICO, the consumer arm of credit scorer FICO, says banks generally don’t report debit card activity to the credit bureaus, so a debit card does nothing for a FICO score. The US Federal Trade Commission says the most a cardholder owes for a stolen credit card is US$50, while a debit cardholder who reports a theft late can lose up to US$500, or everything taken once 60 days have passed since the statement.
Rewards are the third leg. A 2023 Federal Reserve Board discussion paper by Sumit Agarwal and colleagues estimated that rewards cards move about US$15 billion a year from naive cardholders to sophisticated ones, whatever their income. Rewards cards led naive users to spend more and carry bigger unpaid balances, the authors found.
How the New Zealand rules compare
New Zealand credit files have carried monthly repayment history since April 2012, when the Privacy Commissioner amended the Credit Reporting Privacy Code. The Commissioner’s guidance at the time said paying or missing a credit card, mortgage or utilities bill would show on a credit report. It also said people who’d never held credit could still build a good record by paying utilities on time.
Fraud cover doesn’t hinge on the card type either. The New Zealand Banking Association’s Code of Banking Practice says banks will compensate a loss from an unauthorised card or electronic banking payment if the customer wasn’t dishonest or negligent, took reasonable steps and cooperated quickly. The Banking Ombudsman Scheme says chargebacks are available on credit and debit cards used through Visa or Mastercard, though not on payments processed through EFTPOS.
New Zealanders use both kinds of card. The Commerce Commission’s monitoring shows 3 in 4 payments now run on Mastercard and Visa, up from 43% in 2019, as EFTPOS loses ground to contactless, phone and online payments. Its 2025 decision paper also noted credit is more common here than in similar-sized European countries.
What each tap costs the business
Since 1 December 2025, the Commission has capped interchange, the fee a business’s bank pays the cardholder’s bank, at 0% for an inserted Visa or Mastercard debit card, 0.2% for contactless debit and 0.6% for debit online. Personal credit cards are capped at 0.3% in person and 0.7% online. EFTPOS charges a monthly fee for unlimited payments instead of a percentage on each sale.
The Commission’s 2024 consultation paper found that where a business applies one blanket surcharge, debit card users subsidise credit card users. Commercial credit cards, which businesses issue to staff for work spending, get their own caps from 22 April 2027, saving businesses about $40 million a year. Commerce Commissioner Bryan Chapple says the perks on those cards flow through to retail prices, “where everyone pays for benefits only some people receive”.
The counterpoint is real. The Commission accepted that lower caps are likely to trim rewards for some cardholders, and ASB and Mastercard argued in submissions that the cuts shift costs onto those least able to afford them. Credit card arrears sit near historic lows at 3.7%, according to Centrix’s September 2026 Credit Indicator, though credit cards still account for 33% of accounts in financial hardship.
The promised ban on in-store surcharges hasn’t arrived. The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill was reported back from select committee in November 2025 but hasn’t had its second reading. ACT leader David Seymour told interest.co.nz in March 2026 that his party had pulled its support, and Commerce and Consumer Affairs Minister Cameron Brewer said in July that National still backed the ban but parliamentary time was short.
Until a ban passes, surcharging stays legal. The Commission’s advice to businesses is to review their merchant service fee arrangements and ask their payment provider how the new caps change their costs.
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