Can I pay my credit card bill in parts?

With a credit card, you can choose to pay off part of the balance instead of repaying the total balance in one go. When making a partial payment, it could be the minimum amount listed on your credit card statement (usually around 3% of the total owed), or any amount above that minimum.

But if you make a part payment, the remaining portion of your credit card balance will usually attract interest charges – unless you have a card that offers a promotional 0% p.a. interest rate for your balance.

What is a part payment?

A partial or part payment is any repayment that is less than the total amount you owe.

With a credit card, making part payments means you can pay off your balance over time. So, when you get your monthly credit card bill, you have 3-4 main repayment options:

• Pay the card's closing balance in full. If you pay the total owed, you can usually avoid interest charges on your credit card thanks to interest-free days.
• Pay the minimum amount. The minimum repayment amount listed on your credit card statement is the smallest amount you can pay while keeping your account in good standing – usually around 3% of the total owed. Only paying the minimum increases the risk of higher costs and long-term debt.
• Pay another, partial amount of your choosing. Making a part payment is one way you can reduce your credit card balance more effectively than paying the minimum repayment.
• Set up an instalment plan. If your credit card offers instalment repayments, you could pay all or part of your balance off in fixed monthly amounts, over a set period of time. For example, if you owed $2,000 on your card, you might set up an instalment plan and pay $200 per month for 10 months. Sometimes you can also get a promotional interest rate on the balance.

How do part payments work?

A part payment allows you to keep using your card, and helps you avoid late fees or other penalties. When interest is charged on your outstanding balance, making a part payment will also help reduce the amount of interest you're charged.

You can make a part payment once, before the due date listed on your statement, or make several part payments throughout the month.

As credit card interest is charged daily, making more frequent payments will help you reduce your balance and interest charges for the next billing period. It also means you can plan repayments around your payday – whether it is weekly, fortnightly or monthly.

3 things to keep in mind when making part payments

1. Part payments don't stop you accruing interest on any remaining balance.
2. You'll usually lose the benefit of interest-free days for the next billing period if you don't pay the full amount by the statement due date.
3. If you continue carrying a balance and using your credit card for purchases, you could have a higher balance, higher minimum payment amount and more accrued interest on your next statement.

Finder survey: How stressed are Australians of different ages about their credit card debt?

Is making a part payment a good idea?

It depends. If you make part payments to fit in with your payday, it can help you repay the card's whole balance by the due date on each statement.

If it's not possible to pay off the whole balance, making a part payment could also give you some financial breathing space, while continuing to reduce your balance over time. This can make part payments a better option than only paying the minimum amount due on your statement – as you'll see in the example below.

How can I use part payments for multiple credit card debts?

Having debt on a few credit cards can make it more difficult to pay your whole balance off. Here are some strategies where you could use part payments to deal with multiple credit card debts.

• Pay the balance with the highest interest rate first. With this strategy, you pay as much as you can off the card that charges the highest interest rate and make minimum payments on the other cards. Once your part payments have cleared the balance on the card with the highest rate, you can focus on paying off the next one.
• Pay off the lowest balance first. Sometimes known as the "snowball method", this option sees you order your debts from smallest to largest amounts. You pay the minimum repayment on all debts except for the smallest, which you make part payments on until it is paid off. Once this debt is paid off, you can put part payments towards the second smallest debt, while continuing with minimum payments on your other debt. This method can help you keep track of your goals and progress, which can make it easier to stay motivated.
• Pay off the card you want to cancel first. If you have debt on a credit card that you no longer want to use, you could focus on paying it off so you can cancel it as quickly as possible.

With any of these options, you will still need to pay at least the minimum amount that's listed on each of your credit card statements. It's likely that every credit card will have a slightly different due date, which means you could end up making repayments at different times throughout the month.

You will also be charged interest on each credit card balance until it is paid off.

How can I save on interest charges while making part payments?

There are a few tips and strategies you can use if you want to keep credit card interest to a minimum while you pay off the balance. These include:

• Paying as much as you can off the balance. Even if you can't pay the full balance on your credit card, paying the highest amount that's affordable for you will help you reduce the debt and save on interest as a result. You can use a credit card repayment calculator to see how much different part payments will help you save.
• Consolidating your accounts. If you have more than one credit card, consolidating them into one account could help you save on both fees and interest charges. You can learn more about debt consolidation options in this guide.
• Setting up an instalment plan. Some credit cards may offer a promotional low or 0% interest rate if you set up an instalment plan for your balance. You can see if this option is available by logging in to your credit card account or by calling the number on your card or account statement.
• Getting a balance transfer card. Balance transfer credit cards offer an introductory low or 0% p.a. interest rate on debt that you transfer to the new account. The introductory period typically ranges from 6 to 26 months for a 0% p.a. balance transfer offer, but could be up to 30 months for a low rate balance transfer offer. This gives you a window of time when you can make part payments towards your balance with reduced or no interest charges.

Any part payment that is higher than the minimum amount listed on your credit card statement will help you reduce the balance and subsequent interest charges. But remember that paying more off your card will help you clear the debt faster and reduce interest charges.