How to pay off your credit cards

Paying off credit card debt can be tough, but it's a lot easier when you know your options. Even though you only get a statement once a month, you can make payments whenever and however you want – as long as you meet your monthly minimum repayments.

We'll cover the ways you can repay your credit card as well as a few tips to paying off your debt easier and faster.

Ways to make credit card repayments

Like any transaction these days, there are many ways to make your credit card repayments, which you'll find listed on your credit card statement. Some options may take a couple of business days to process – especially if it's by post – so ensure your payment is lodged a few days before it's due. You'll find the due date listed on your credit card statement as well.

• BPAY

BPAY payments can be made from an Australian transaction account using internet, mobile, or over-the-phone banking services. Enter the BPAY biller code, your credit card number and how much you want to pay.

• Internet banking

If you have a transaction or savings account with the same bank as your credit card, you may be able to use your Internet banking platform to make a one-off payment on your credit card.

This method is offered by many banks including ANZ, CommBank, NAB, Westpac, Bankwest, Bendigo Bank and Citi. You can check if your bank offers this type of repayment by calling or logging into your Internet banking account to view payment options.

• Australia Post

Present your credit card, statement and method of repayment (e.g. cash, cheque, debit card) at the post office. This is a relatively slow method of repayment and usually incurs an extra fee of a few dollars (the fee varies depending on your card provider).

• At a branch

Visit your bank and pay your credit card bill by cash, cheque or debit card.

Can you set up autopay for credit cards?

Most Australian credit card companies give you an automatic payment option that's known as autopay, AutoPay or another similar name.

No matter what your bank calls it, autopay is very similar to other recurring payments or direct debits: when you set it up with an Australian transaction or savings account, an automatic payment will be made to your credit card on a scheduled date each month.

You can set up credit card automatic payments to cover one of the following amounts:

• Your minimum credit card payment each month. This is usually around 2-3% of your balance, or a minimum dollar amount of $20-$30, depending on the card.
• The card's total closing balance for that statement. For example, if your credit card statement shows that you owe $1,500 then the autopay amount would be $1,500.
• A nominated dollar amount. You can request an auto payment for any amount that is higher than the minimum repayment amount. For example, you could set up an automatic payment for $250 per month.

To set up autopay for your credit card, you need to fill in a request form that's usually available on the bank or credit card company's website. You could also call them or visit a branch to get the form.

How much do I need to pay off my credit card bill?

Your monthly credit card bill will list your closing balance plus your minimum repayment amount. The minimum payment amount is usually around 2-3% of your closing balance, with a flat dollar amount of around $30-$50 depending on the card.

Technically, you only have to pay the minimum amount each month to avoid marks against your credit, but this won't reduce your debt significantly. Instead, you should figure out how much you can afford to pay each month (such as by using our credit card repayment calculator) and budget around it. This can shave years off the time taken to repay your debt, as well as save you a whole lot of money on interest in the long run.

When can I pay off my credit card?

Though statements are only issued monthly, you are entitled to make payments whenever you want. Weekly or fortnightly payments might suit you better, or align nicely with your paydays.

Just make sure that you've paid the minimum amount by the due date. If you're struggling to meet this deadline, here's a guide to what might happen and what you can do about it.

How to pay off credit cards faster

If you want to get rid of a debt on your credit card or cards, a simple first step is to look at how much you owe and what you can afford to regularly repay. You can use a credit card repayment calculator to help crunch these numbers.

Then, you can start paying off the card or cards at a pace that works for you. Here are key tips to help you pay off credit cards:

• Pay more than the minimum. Making minimum repayments means it will take years to clear your card's debt. Instead, look at how much you usually earn and spend so you can find a comfortable monthly payment level for you.
• Make a payment each time you get paid. For example, if your payday is weekly, transfer a payment amount that you can afford without sacrificing essentials before your next payday. The same approach works if you're paid fortnightly or monthly and can help you see progress on your account.
• Focus on paying off one card at a time. If you're paying off a few credit cards, you'll need to pay at least the minimum amount required for each account. Beyond that, you can pick the one with the smallest balance OR the highest interest rate and pay more off that card until the balance is $0. Close that account and then focus on the next one.
• Consolidate debt. Transferring all your debt to a new card with an introductory 0% interest rate for balance transfers can help reduce the amount you'll end up paying. But be aware that at the end of the 0% p.a. period, a higher interest rate is charged for any unpaid debt that is left on the card.
• Access financial hardship/payment plans. Check with your provider and see if they have any advice or payment plans you can access to help you manage your debt.
• Consider using savings. Credit card debt isn't static – it increases over time. Determine whether digging into savings now to reduce future interest will still leave you with enough money for any unexpected costs.

What if I can't afford repayments?

If you're experiencing financial difficulties, contact your credit card provider as soon as possible to explain the situation. This will help you and your provider work out a plan that is affordable based on your circumstances.

Another great option for anyone struggling with financial debt is to find a financial counsellor. These counsellors can provide free, confidential and independent suggestions on improving your current situation, accessing government assistance, and managing your finances.

The following list of contacts can help provide financial counsel:

Frequently asked questions

• Can I pay off a credit card in full?

  Yes, and it you can then you should. Paying off your credit card in full is a good thing because it means you'll save on interest charges and could even help you get interest-free days on future spending. It can also help improve your credit score.

• What's the difference between autopay and autosweep?

  Autopay is a recurring payment you can set up to manage your credit card repayments. Autosweep is a feature some banks offer when you have multiple accounts to help avoid declined payments.

  With autosweep, if you try to pay for something with one account but don't have enough money, the service will automatically check your linked accounts and transfer funds in real-time so that the payment goes ahead. It's sometimes also known as a "sweep facility" and usually links a savings and transaction account together to offer benefits for both accounts. You can learn more about automatic savings plans and features in this Finder guide.

• What if I need to make changes to my autopay?

  Make sure you let your bank know as soon as possible if you need to make changes to your autopay. Generally, you need to give at least 7 days notice to your bank if you want the changes made.