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Tips for paying off your credit card

Paying off your credit card in a smart way can reduce the amount of interest you pay, save you money and help you manage your debt.

Here are some tips to help you get started. 

Pay more than just the minimum payment

With a credit card, you can decide how much you repay each month. For example:

  • the minimum payment amount set by the credit card provider

  • the monthly credit card balance in full; or

  • a set amount of your choice (over the minimum payment amount)

Ideally, you should aim to pay off your balance in full every month to avoid paying interest on purchases. If you can’t, aim to pay as much as you can. This way, you’ll clear your balance quicker and pay less in interest. If it helps, you can stagger your repayments through the month so you chip away at the debt.

Use our credit card repayment calculator to show how you could reduce the interest and pay the balance faster by increasing your monthly payment.

Work out how much you can afford to repay

Use our helpful credit card repayment calculator to see the potential impact of increasing your monthly repayments.

Creating a budget can help you work out how much you can afford to repay each month. It can also help you manage your spending – so you can avoid having to rely on your credit card between paydays and adding to any debt you may have.  

If you’re an HSBC customer with mobile banking, you may be able to use our Balance After Bills tool. This helps you plan ahead by showing you how much you’ll have available once your regular standing orders and Direct Debits have left your account. 

Pay by Direct Debit

Setting up a Direct Debit for credit card repayments can help you avoid fees and give you one less thing to worry about. Set up a recurring monthly payment for as much as you can afford to pay off (at least the minimum repayment).

You can still make other payments throughout the month so you can clear the debt faster. But you’ll need to make sure you have enough money in your account to cover the Direct Debit and avoid going into your overdraft. 

If you have an HSBC credit card, we can send you reminders and alerts when your payments are almost due or you’re approaching your credit limit.

Use your savings to repay debt

If you have money left over each month, you may consider using it to build up your savings or repay debt. If the interest you’re charged on a credit card is greater than the interest you’ll earn through savings, you may want to pay off your debt first.   

Credit cards and overdrafts are seen as short-term borrowing options. Ideally, you should try and pay off your credit card as quickly as possible, especially if you’re charged interest.

Consider a 0% balance transfer credit card

If you’re being charged interest on your credit card, a 0% balance transfer credit card could save you money. It allows you to move debt onto a card that offers an interest-free period on the money transferred. Not only can this give you more time to pay off your debt without being charged interest, it can help you pay it off quicker and cheaper. 

Paying off your credit card when you have multiple debts

You may have another credit card, overdraft or loan to pay too. Having multiple debts can feel overwhelming at times, but you’re not alone. 

There are things you can do to help you feel in control of your finances:

Prioritise your debts

A cost effective option may be to repay the debt with the highest interest rate first, as it’s charging you the most to borrow the money. Alternatively, you may decide to pay the smallest debt off first to reduce the number of debts you need to think about. Remember, you’ll still have to meet the minimum repayments on all.

Explore: How to prioritise your debts

Consider debt consolidation

Debt consolidation is when you merge existing debts, at different financial institutions, into a single loan. It can help you simplify repayments and reduce stress. 

Explore: How does debt consolidation work?

Reach out for support

If your debts do feel too much, or you just need someone to talk to, there is support available to help you get back on track.    

If you’re with HSBC, you can call us on 0345 850 0622 for a helping hand.

Explore: Where to go for assistance