How much do you have to pay?

You can pay off a credit card over several months or even years, but you always have to repay at least the minimum amount set by your provider each month.

If you do not pay this, you will be charged around 12, and the missed payment will show on your credit record.

You can find the minimum payment amount on your monthly statement. It will be at least 1% of the amount you owe plus any interest and charges. There may also be a specific sterling amount too (usually between 5 and 25).

Although you will not be charged a fee if you pay just the minimum amount, it could take years to repay what you owe and you will pay more interest.

How much should you repay?

You can choose the amount you repay on your card from the following:

  • The minimum payment amount

  • The full statement balance

  • Another amount of your choice

If you pay your bill in full every month, you will not pay any interest on your credit card.

However, if you want to use your card to borrow and pay off the balance over time, you should pay back as much as you can without leaving yourself short of cash for the month.

Paying back more each month means you will clear the balance quicker and pay less interest on your credit card.

How to set up repayments

Pay by direct debit

If you pay by direct debit, your bank will automatically pay your credit card bill for you each month straight from your bank account, so you will not forget to pay it.

You can choose for it to pay the full amount due, the minimum payment or a specific amount of your choice each month.

You can set up a direct debit when you fill out your application form. Alternatively, you can:

  • Complete a form that comes with your card

  • Phone your card provider

  • Log into your online account

How else can you repay?

If you would prefer to pay each bill when it arrives, you can:

  • Use your debit card to pay by phone or online

  • Pay in person if your provider has a nearby branch

  • Send a cheque to your credit card provider, making sure you quote your credit card number and send it several days before the payment is due

  • Sign in to your bank account's online banking and transfer money to your credit card provider

Repaying an outstanding balance

If you owe money on a card already, here is how to pay it off:

Work out how much you owe

First, find out exactly how much you need to pay back on every card you have. Check their balances by:

  • Signing in to your online account

  • Looking at a statement

  • Using a cash machine

  • Phoning your provider

Work out how much they cost

Your outstanding balances could be costing you money in interest and fees, so work out what each one costs each month.

If you have more than one card, you could save money if you pay off your most expensive one first.

You can also work out how to avoid fees; for example, if you are being charged for missing payments on a card, just setting up a direct debit for the minimum amount could save you 12 a month.

If you are not sure what interest and other fees you are being charged each month, ask your provider.

Pay them off

Decide how much to pay back each month and how you want to make the repayments.

You can make one off payments as well as monthly repayments. You can use these to clear part of the balance or even all of it, if you can afford it.

Some mortgages and loans have restrictions and charges on paying off the balance early, but these do not apply to credit cards.

Save money on your repayments

You may be able to cut the interest you pay by clearing your balance in the following ways:

Use your savings

If you have savings as well as an outstanding credit card balance, the interest you pay on your credit card will be more than what you make on your savings.

If you owed 2,000 on a card with an APR of 17%, this would cost 340 in interest each year.

If you also had 2,000 in a savings account paying 1.25%, it would only earn you 20 in interest (after 20% tax).

Using your 2,000 savings to pay off your credit card would save you 320 in interest in this example (although you could be left without money when you need it if these savings are your emergency fund).

Decide which card to pay off first

If you have two or more credit cards, pay as much as possible towards the card that is charging you the highest rate of interest. This will clear your most expensive debts more quickly and save you money.

Make the minimum payments on your other cards so you are not charged fees.

Using a balance transfer to save money

You could move what you owe on a credit card to a new, cheaper card with a balance transfer.

Many of these deals offer a 0% interest period that can last more than three years. You can use this time to repay the balance without paying any interest at all.

Many come with a fee for making the transfer, but this will usually come to much less than the interest you would pay.

If you are paying off several balances, you can consolidate using balance transfers to one of your existing credit cards or a new card.

You could save money if the card you use has a low interest rate and there will be less paperwork to keep track of and only one monthly repayment to make.

Paying off a credit card with a loan

Some personal loans offer lower interest rates than most credit cards, so it could be cheaper to get a loan to pay off your credit card balance and then repay the loan instead.

However, a balance transfer is usually a cheaper option, so compare the costs before you take out a loan.

Use our loan calculator to work out the overall cost and how much you would have to repay each month. You can then make sure you could afford the loan and that it would be cheaper than keeping your credit card.

Debt consolidation loans allow you to pay off credit cards and other debts over a long term. Although this keeps the monthly repayments low, the total cost can be high and many will need to be secured against your home.

Can you make a repayment before you get your bill?

Yes, you can make additional repayments whenever you like. For example, if your credit card bill is due to be paid on the 24th but you want to pay off some or all of what you have spent before then, you can do this.

However, it is usually not worth paying early, because your balance will be interest free until the due date.

The exception is if you take out cash on your credit card, when it is worth repaying the amount you have withdrawn as quickly as possible instead of waiting for your statement. This is because you will be charged interest from the day you withdraw it until you pay it back.