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How does a credit card work?

Two girls talking; Image for HSBC Credit card application

A credit card works by letting you borrow money from the credit card issuer to buy goods and services.

You then pay the amount you’ve borrowed back either in full, or in monthly instalments. If you don’t repay in full, you’ll also be paying interest.

You’re able to spend up to a certain amount on the credit card. This amount is your credit limit. Every month your credit card issuer will send you a statement that shows all your transactions.

Your repayment options include a minimum payment amount or a full payment, and as applicable, options for a  fixed payment. 

Why use a credit card?

Spread the cost of large or expensive purchases

Want to book a holiday or buy a new couch? You can make a purchase and then repay the balance over the course of several months.

Build your credit rating

Having no credit history means that banks are unable to assess how well you can manage debt. A credit card can help you build up a good track record of paying off debt, as long as you make at least the minimum payment each month and stay within your credit limit. When it comes to applying for larger loans like a mortgage, this can help prove you're responsible.

Your credit standing may be harmed if you don’t keep to the terms of your credit card agreement.

Prepare for emergencies

A credit card can help cover repairs, or unexpected expenses.

HSBC Platinum Visa Rebate Credit Card Rewards

Don’t have a card yet?

Earn 5% rebate on shopping and travel transactions, 1% on insurance and 0.50% on all of your other transactions with a new HSBC Platinum Visa Rebate Credit Card. Apply for one today.

Already an HSBC credit cardholder? Discover latest credit card articles here.

How does credit card instalment work?

You can enjoy instalment deals of up to 36 months to pay with your HSBC Credit Card.

With your HSBC Credit Card, you can purchase high-ticket items like gadgets, appliances, airplane tickets and so much more at 0% interest on instalment payable up to 36 months at selected merchants. Click here to know more.

What are credit card fees and charges?

Credit Cards may apply fees and charges to different types of transactions. You can also find the interest rates that apply to you in your statements.

How do credit card payments work?

Every month you’ll receive a statement showing the minimum payment you’ll need to pay for the month and your due date.

The minimum payment is the lowest amount you can pay from the total of what you owe for goods, services, cash withdrawals, and applicable interest and fees.

If you have an instalment plan, you’ll see the total amount you must pay in your statement, which could include any ongoing installment transactions and any unpaid fees and charges from previous instalment transactions.

You can pay more than the minimum payment due and this will minimize the amount of interest you have to pay in the longer term.

Visit this link for computation details.

What is interest?

Credit card interest is the amount you’re charged if you don’t pay off your credit card balance in full after receiving your statement each month. The interest will be calculated as a percentage of the amount you owe. 

There are some transactions which you may still be charged interest on, even if you repay your balance in full each month. These can include quasi-cash*, and cash advance transactions from the date of the transaction until the payment. Always check your credit card terms and conditions to see what types of transactions you will be charged interest on.

*Quasi-cash transactions refer to a purchase of foreign currency or items (including but not limited to, gaming chips, money orders and lottery tickets) which may be convertible to cash; the transfer of funds under a wire transfer money order, the funding of accounts including electronic or virtual wallets and such other transactions as determined by the relevant card association from time to time.

How we calculate your interest

We charge interest starting from the date of the statement cut-off date and is calculated each day until such amount is paid off. If you make a transaction after a statement being issued, it will be reflected on the following statement. We work out interest on a daily basis and add it to the account on your monthly statement date.

Fees and charges will incur from the date that each transaction is charged to your account until such amount is paid off.

If you only pay the minimum payment, or less than that, by the due date, we will charge you fees, charges and taxes. Check our Fee Schedule here for fees and charges applied to each transaction.

If you don’t have any cash advances and pay the full amount you owe us immediately by the due date, you won’t be charged any interest.

How do you apply for a credit card?

Explore our range of HSBC Philippines credit cards and apply for a credit card online

Eligibility for an HSBC Credit Card:

You can also drop by at any HSBC branch near you to apply.