How do you pay off a credit card?

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How you could pay off your credit card debt faster

Making purchases on a credit card can come with many advantages. You might get some money back as cashback each year, some air miles towards a dream holiday, or loyalty points with your favourite retailer.

But if your spending gets ahead of you and your balance starts to add up, credit cards can quickly go from being an added benefit, to a mountain of stress and debt.

Keeping on top of your credit card payments will make sure you and your bank balance will stay happy and healthy. In this guide, we'll share some of top tips on how you can pay off your credit card, what you should look out for when managing your card, how making or missing payments might affect your credit score, and all about the "debt avalanche" method.


If you're looking to get into the habit of saving and want a bank that can help you manage your finances better, then you'll love our Monzo current accounts.

If you’re Full Monzo, on payday you can use Salary Sorter to sort your money between spending, bills and savings, as soon as it arrives in your account, leaving you with the money you're free to enjoy - or you could look into our savings pots or ISAs!


How do you pay your credit card bill?

Every month, usually your bank will send a statement that shows you how much you owe. Most credit card companies give you anywhere from 20 to 45 days after getting the statement to make a payment. You can make a payment through a monthly Direct Debit, one-off debit card payments, and in some cases a bank transfer, with your card number as the payment reference.

There'll be two amounts on the statement:

  1. Your balance in full

  2. The minimum monthly payment.

You usually need to make the minimum payment on your card bill each month. If you don't, the credit card company may charge you extra fees, or take further action against you.

You can usually choose to pay back as much as you want every month (as long as you pay back at least the minimum monthly payment). But we recommend you pay off your balance in full when you can. Here's why.

Should I pay my credit card in full?

You might find it helpful to pay off their credit card in full. Doing this could help you pay little to no interest on the amount you owe.

Here's an example:

Let's say you have a balance of £5,000 on your card, with a 20.9% APR. If you only paid back £100 a month, it'd take you 8 years and 5 months to pay off your balance. During that time, you'd pay £5,070 in interest - more than the amount you borrowed in the first place!

That's why it can be cheaper to pay off the full balance on your statement whenever you can.

What is the smartest way to pay off credit cards?

Setting up a Direct Debit can help make sure you never miss a payment that's due.


If you're Full Monzo, you can create specific Bill Pots for your credit cards, which let you automatically set aside the money you owe each month.

You can pay your Direct Debit straight from the Pot, and they'll help make sure you don't accidentally spend it!


If you've got a card that came with a special introductory rate, like 0% on purchases or a balance transfer offer, keep a close eye on when that rate expires.

You'll usually be able to borrow a certain amount of money, at this special introductory rate. It can be helpful to pay off the amount you have at the special introductory rate before the offer ends so you avoid paying interest.

Your card statement should tell you when the rate expires, what the new rate will be, and how much of your balance is assigned to this rate.

Fortunately, most credit cards put your payments towards the balance with the highest interest rate first. But if you've decided to pay your card off in full every month, you probably won't need to worry about that!

Is it bad to pay your credit card bill early?

Your credit card company won't charge or penalise you if you pay your credit card bill early.

You could pay off your debt as soon as the statement comes in, or even straight after you've made a purchase. Some people find it helpful to be proactive with managing their finances! But keep in mind you won't get any 'extra credit' (pun intended) for paying it off sooner.

If you're keeping the money you're planning to use to pay off your credit card in a savings account, it can be useful to keep as much money in your savings account as possible, to earn as much interest as you can.

If you're doing this, it could be better to only pay your credit card bill on the day it's actually due, so you can keep more money in your savings account for as long as you can. You could try setting up a Direct Debit to pay your credit card bill on the date it's due, so you can maximise your savings without the risk of missing a payment

How can I pay off my credit cards faster with other bills I still have to pay?

It can sometimes be difficult to pay off your credit card debt when you have other bills that are due at the same time. Some of these bills are essential, such as your rent, mortgage or phone bill!

This is where the debt avalanche method might come in handy.

What is the debt avalanche method?

The debt avalanche method is a useful way to pay off debt. It involves making minimum payments on all your debt first. Then, with any extra money you have left (after you've paid for essentials like rent, bills, food or travel), pay off the debt with the highest interest rate.

The debt with the highest rate will grow fastest, meaning it'll cost you the most. So by paying it off first, you could be saving yourself money or making your debt less expensive.

What is the debt snowball method?

The debt snowball method is a different way to deal with debt to the debt avalanche method. It's important to find a way that suits you best!

The difference here is that the debt snowball method involves paying off the smallest debts first, before moving onto the bigger ones. The idea is that you get some momentum going by settling your smallest balance first, move onto your next smallest debt, pay that off, until you're on a roll.

Both methods for paying off debt have their merits, but if we were only going to recommend one: we'd go with the debt avalanche technique.

Are there any other options?

You could also consider a balance transfer card with a 0% interest offer.

It might sound odd to pay off your credit card debt by getting another credit card. But a balance transfer card with a 0% interest offer can be a useful way to avoid paying more interest on the money you owe. It can help you save money and make your debt more manageable.

These can last anywhere from 6 to 24 months, and will let you move your credit card balance over to the new card (after you pay a typical transfer fee of 1-3%). They can be a good short-term fix. But keep in mind that if you're still relying on them when your rate ends, you may not be eligible for new credit.

Find out more about how to get into a healthy habit of budgeting here.

What happens if I just stop paying my credit cards?

Sometimes debt can make you so stressed it can be tempting to ignore it! And we also know life doesn't always go according to plan, and that you might be struggling to afford your repayments

If you're struggling to pay back your debt, it can be a good idea to talk to your credit card company. Most card companies will be willing to work out an arrangement with you to help you get back on track towards making yourself debt-free. Other organisations like the National Debt Line are on hand to help you if you're struggling with debt.

Should I use a personal loan to pay off credit card debt?

Taking out a personal loan can be a useful strategy to manage your credit card debt.

If you can take out a loan at a lower interest rate, and use that to pay your credit card debt and any other outstanding balances you may have, you could save money in the long run.

Will paying my credit card balance every month help my credit score?

A common misconception is that leaving a small amount of money on your credit card every month can help improve your credit score. But this is definitely a money myth!

Leaving a balance on your credit card does nothing to help your credit score. If you find yourself with an outstanding balance on your credit card, make sure you look into how much interest this is costing you.

There are two important factors that help your credit score.

1. The first is your payment history.

You don't have to pay off the full amount each time. But keep it regular, and never late.

2. The second is your balance-to-credit limit ratio, otherwise known as your "utilisation rate".

This is the difference between the balance that's on your card and your maximum credit limit. The bigger the difference, and therefore the smaller the balance you have on your card, the better it is for your credit score.


If you're looking for a bank account that can help manage all your budgeting for you, try a Monzo account today.

In our latest survey, 98% of our users said they'd recommend making Monzo their main bank account to their friend. So, what are you waiting for?

You can also read more about Monzo and loans here.


Not sure a credit card is for you? Check out Monzo Flex to spread the cost of pretty much anything. You can use Flex online or in-store, and just like a credit card you get section 75 protection for eligible purchases with your virtual card. Choose whether to spread your payments over 3 instalments interest free, or take more time with 6 and 12 instalments at 19% APR representative (variable). It's easy to keep track of your repayments in the Monzo app.