hsbc travel credit card uk

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Premier World Elite Mastercard

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We're currently updating our credit card application process. This means you can’t apply for new or supplementary cards at the moment. We're sorry for the inconvenience and we're working hard to bring this back as soon as possible.

An exclusive card designed for the dedicated traveller

Our Premier World Elite Mastercard offers cardholders a wide range of rewards and benefits, including access to over 750 premium airport lounges around the world. Plus, earn reward points when you spend to redeem on shopping and travel, as part of our exclusive Premier World Elite Rewards programme.

Representative example

Representative 59.3% APR

Purchase rate 18.9% pa

Based on an assumed credit limit of GBP 1,200

Annual fee GBP 195

Why choose a Premier World Elite Mastercard

Bonus reward points

Get 80,000 extra points when you meet our first 3 and 12 month spending criteria. T&Cs apply.

Access exclusive offers

Enjoy travel benefits and earn rewards.

Premium lounge access

Access 750 premium airport lounges on your travels around the world with Priority Pass.

Premier World Elite Rewards Programme

Earn points when you spend to redeem on shopping or travel. T&Cs apply .

• Earn 2 points for every GBP 1 spent in sterling in the UK, offshore and overseas, and earn 4 points for every GBP 1 you spend in eligible non-sterling currency
• Redeem against vouchers for top retailers or travel
• View our Premier Credit Card Rewards programme  

Travel benefits

Access discounts on hotels and Priority Pass airport lounge access.

• 10% discount on selected hotels booked with your card through Expedia
• 12 months complimentary Expedia+ Gold membership
• 10% discount on over 180,000 hotels booked with your card through Agoda
• Access to over 750 airport lounges worldwide with Priority Pass

Online account management

Suit yourself with round-the-clock online or phone access.

• Manage your account day to day - check real-time statements, report a lost or stolen card or block it temporarily, activate cards, make payments
• Redeem Premier Points
• Register and add your card to Global View to see your global HSBC accounts in one place
• Register for online banking  

Things to know

Who can apply.

You can apply for a World Elite Premier Credit Card if you:

• are aged 18 or over
• maintain a minimum relationship balance of GBP 50,000 or have a sole salary of GBP 100,000

HSBC Premier customers in other countries qualify.

All credit applications are subject to status, our lending criteria and an assessment of the circumstances of the applicant. Maximum credit limit subject to status.

Interest rates, fees and charges 

Apr (annual percentage rate), interest free period.

Up to 56 days on purchases if you pay your whole balance in full and on time.

Interest charging information

You will not pay interest on purchases if you pay your balance in full and on time each month. Otherwise, the period over which interest is charged will be as detailed in the table below. For cash advances and balance transfers any interest charge for the period from the previous statement to the date of full repayment will be debited the following month. Interest will not be charged on default charges.

Allocation of payments

Your payment is allocated in the following order:

• Cash advances
• Standard rate balance transfers
• Promotional rate purchases and balance transfers

For further details, please refer to your credit card terms and conditions.

Minimum monthly payment

Interest, default charges and any payment protection insurance premium plus 1% of the principal, or 2.5% of the balance or GBP 5 whichever is highest, or your statement balance if less than GBP 5.

Amount of credit

• Minimum credit limit - GBP 500
• Maximum credit limit - subject to status
• Primary card - GBP 195 (annual fee)
• Additional card - GBP 60 per additional card (annual fee)
• Cash fee - 2.99% handling fee, minimum GBP 3 (includes cash withdrawals, purchases of foreign currency and travellers cheques, but does not apply to gambling transactions)
• Balance transfers - 2.9% of each amount transferred, minimum GBP 5

Foreign usage

• Payment Scheme Exchange Rate - to find out more, visit the Mastercard Rates website

Depending which type of transaction you undertake, one or more of the following will apply:

• non-sterling transaction fee - 2.99% of the sterling amount of the transaction
• cash fee - 2.99% of the amount advanced, minimum GBP 3

Important documents 

• World Elite Mastercard Terms & Conditions (PDF) World Elite Mastercard Terms & Conditions (PDF) Download

Ready to apply?

Already with expat.

Download and complete an application form and send it to:

HSBC Expat HSBC House Esplanade, St Helier Jersey, JE1 1HS

Temporarily not available.

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You can apply for a Premier World Elite Credit Card once you've opened an HSBC Expat Bank Account with us.

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HSBC Credit Card

The HSBC Credit Card is a GBP card accepted at over 24 million locations around the world. 

Additional information

Disclaimer .

Credit cards are provided by HSBC Bank plc, which is authorised by the Prudential Regulatory Authority and regulated by Financial Conduct Authority and the Prudential Regulatory Authority. HSBC Bank plc, Card Services, PO Box 6001, Coventry, CV3 9FP, United Kingdom.

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Using Your HSBC Credit Card Abroad in 2023: Fees, Benefits, and Alternatives

Monito's Managing Editor, Byron has spent several years writing extensively about financial- and migration-related topics.

Links on this page, including products and brands featured on ‘Sponsored’ content, may earn us an affiliate commission. This does not affect the opinions and recommendations of our editors.

Are you planning to use your HSBC credit card on your next trip abroad? Well, get ready for a few potential headaches: many HSBC customers have reported unexpectedly high fees on their statements after using their credit cards while travelling overseas.

Fortunately for you, there are a few alternatives to choose from if you prefer low-cost holiday spending. In this post, we walk you through the fees and exchange rates you'll meet when using your HSBC credit card abroad and offer savvier alternatives to use instead. So, whether you're planning a weekend getaway, a business trip, or a dream vacation, read on to learn how to make the most of your card spending while abroad!

HSBC's credit cards can be pricey to use abroad due to the high charges. Instead, we recommend Wise for non-GBP transactions or Starling Bank as the best complete bank alternative to HSBC.

Key Facts: HSBC Credit Cards Abroad

Using your hsbc credit card abroad.

• 01. How to use your HSBC credit card abroad scroll down
• 02. Fees for using your HSBC credit card abroad scroll down
• 03. Best travel card alternatives scroll down
• 04. FAQ about using your HSBC credit card abroad scroll down

Heading abroad soon? Don't forget to check the following list before you travel:

• 💳 Eager to dodge high FX fees? See our picks for the best travel cards in 2023.
• 🛂 Need a visa? Let iVisa take care of it for you.
• ✈ Looking for flights? Compare on Skyscanner !
• 💬 Want to learn the local language? Babbel and italki are two excellent apps to think about.
• 💻 Want a VPN? ExpressVPN is the market leader for anonymous and secure browsing.

It should go without saying that credit cards are versatile tools that you can use to handle all kinds of financial transactions while on holiday abroad. This is no different with HSBC's range of credit cards, all of which enable you to:

• Pay at point-of-sale machines in foreign countries,
• Withdraw local cash banknotes from foreign ATMs,
• Book or handle deposits for car rental agencies, hotels, or flights.

In addition, some credit cards also let you take advantage of travel insurance, rewards, cashback, and other exclusive benefits while travelling abroad. It's always a good idea to check with HSBC what benefits might apply to you before you travel so that you know what you can and cannot expect to take advantage of.

HSBC Credit Card Fees Abroad

Although they're easy and convenient to use abroad, HSBC credit cards come with some costs you should consider before travelling abroad. We've summarised them below (ignoring non-travel-related costs like annual fees, cash advance, and interest charges):

Verified: 3/3/2023

All told, these costs can lead to an unnecessarily pricey trip abroad. Let's break them down with a typical example:

Point of Sales Transactions

Suppose, for example, you're on holiday in Paris and decide to spend €100 on a boutique fashion item you like. You pay with your HSBC credit card. The first thing that happens behind the scenes will be the conversion of your pounds into euros. Fortunately, this occurs at the Visa or MasterCard exchange rate (which is generally within a few points of a percent of the actual mid-market exchange rate) without HSBC charging its own exchange rate on top of that. This means you won't pay much for exchanging currency, and you'd be paying 87.75 (at Visa or MasterCard's rate) instead of £87.91 (at the mid-market rate) on the final statement at the time of writing. Not a big deal, right?

However, it doesn't end there. Next, HSBC will hit you with a 0.0299 foreign exchange fee. This fee is rather high and leaves the final cost on your bank statement at £90.70 (approximately 0.0317 higher than a fair exchange). This may not sound like a lot, but consider that you'll be hit with this fee every time you tap your credit card, so it all stacks up quite quickly.

Cash Withdrawals

The costs are even more profound when using your HSBC credit card to withdraw cash. Sticking with our example, suppose you next wanted to withdraw €1,000 to get you through a few more days of Parisian spending. Here, you would again pay the Visa or MasterCard exchange rate plus the 0.0299 foreign exchange fee (this time amounting to £26.28). On top of this, you'd then pay an additional 0.0299 on the remaining amount (or £27.07 in this case).

After factoring in all these fees combined, the conversion on your bank statement would be a whopping £932.42 (that's 0.0622 or £54.62 higher than a fair exchange).

Better Alternatives

Fortunately, there are much more affordable ways to spend your pounds while travelling to Paris or anywhere else in the world. Below, we suggest two world-class UK-based alternatives for you to consider depending on your individual needs and preferences:

Wise: Best for Tapping Your Card Abroad

Wise's fee-free debit card is an excellent way to spend money while abroad from the UK because it allows you to pay in foreign currencies with no hidden fees and offers competitive exchange rates. It's almost always a far better deal than HSBC for overseas spending, and you can use it next to your HSBC current account whenever you leave the UK.

• Trust & Credibility 9.3
• Service & Quality 8.9
• Fees & Exchange Rates 7.6
• Customer Satisfaction 9.6
• Multi-currency balances: Yes (available in 56 currencies)
• Foreign exchange margin: 0%
• Foreign exchange fee: 0.2% - 1%
• ATM withdrawal fee: 0.0175
• Best for: Card payments in a foreign currency

Starling Bank: Best Complete Bank Alternative

Starling Bank is a first-class online bank whose debit MasterCard is an excellent way to spend money abroad because it offers no fees whatsoever on any foreign currency spending. It also provides an excellent current account which we've ranked as the best online bank in the UK .

• Service & Quality 8.5
• Fees & Exchange Rates 10
• Customer Satisfaction 9.3
• Multi-currency balances: No
• Foreign exchange: 0%
• ATM withdrawal fee: 0%
• Best for: A complete bank account alternative to HSBC

FAQ About HSBC Credit Card Abroad

Yes, you can most certainly use your HSBC credit card abroad! Being cards issued by Visa or Mastercard and offered by one of the UK's largest banks. HSBC credit cards are accepted worldwide, and you can use them to make purchases or withdraw cash from ATMs. However, you may be charged a fee for using your card abroad, so it's best to compare your options online before you decide to use your HSBC credit card on your next holiday.

You can consider using a travel card to avoid fees when using your HSBC credit card abroad. There are excellent options out there like Wise and Revolut , which charge incredibly competitive fees and exchange rates when travelling abroad, as well as multi-currency balances to help you dodge conversion fees altogether when tapping your card or withdrawing cash.

See Other UK Travel and Money Transfer Topics

Using Other Banks' Credit Cards Abroad

Wondering how other UK bank credit cards stack up against HSBC's? Take a look at our list below:

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Best prepaid travel money cards 2024

In this article

Which prepaid travel card do you need?

The best multi-currency prepaid cards, the best sterling prepaid cards, what exchange rate do you pay.

• Fees and charges to watch out for

Alternatives to prepaid travel cards

Is it worth getting a prepaid card, prepaid travel cards faqs.

Prepaid travel cards, also known as 'currency cards', allow you to load money in pounds and spend in another currency.

They typically come with no foreign exchange fees on spending or cash withdrawals and usually allow you to lock in competitive exchange rates, saving you money compared with using your everyday debit or credit card.

Here are the different types of prepaid travel cards to consider packing for your next trip:

• Multi-currency prepaid cards allow you to load several currencies onto one card, ideal for visiting multiple destinations. For example, you could have £100, $200 and €300 stored on one card in different 'wallets'. You can lock in rates by converting when you load the cash, or store some money in pounds to convert later.
• Sterling prepaid cards  offer the most flexibility, as you can load your card with pounds and spend in dozens of different currencies. Each time you spend or withdraw cash, the pounds are converted to the required currency at the exchange rate on the day. This may make it harder to forecast how much money you'll have available in any given destination.

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Multi-currency prepaid cards allow you to load a variety of major currencies in one place.

We've analysed the main providers of multi-currency prepaid cards including the type of currency offered, load fees (loading money onto the card), fees for withdrawing cash, and inactivity fees that could catch you out. 

Please note the table is ordered alphabetically, not ranked in order of features.

The Post Office Travel Money Card can load the most currencies, however, charges apply for cash withdrawals at an ATM - so if you're planning on doing this during your holiday, you might be better off with a different card.

Sainsbury's, Travelex and Asda had similar offers with free ATM withdrawals and £500 limits. Nectar cardholders can get better exchange rates at Sainsbury's, so this may be worth considering. 

All the cards allow you to load money that is immediately converted to a foreign currency free of charge. However, more than half of the providers charge a fee of up to 2% for topping up your wallet with pounds to convert at a later date. So if you plan on doing this often you may be better off with one that doesn't charge. 

Sterling prepaid cards offer the most flexible option for travellers and our analysis shows they can be as competitive as single and multi-currency deals.

We looked at the exchange rates offered, as well as the fees you'll pay and maximum balances. 

These cards are convenient as it means you can load as much currency as you want into your account, however, you'll need to download an app to use them.

The Revolut card is free and you will incur no fees on the exchange rate if you convert money Monday to Friday - therefore it's worth loading up and exchanging before the weekend. You'll be charged fees if you withdraw more than £200 a month.

The Wise card uses the interbank exchange rate but charges a smaller 0.45% fee every day of the week. It also has two fee-free cash withdrawals of up to £200 each month. 

Both Wise and Revolut are regulated by the Financial Conduct Authority and operate under e-money licenses. This means your money is not protected by the FSCS, however, your money is held in ring-fenced client accounts with a bank which means your money can't be lent out. 

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Prepaid card providers offer different exchange rates.

Some use the 'interbank rate' (the rate banks charge one another) and others may use Mastercard or Visa's exchange rates.

In some cases, a provider may pick one of these rates, then apply a percentage on top, usually between 1% and 2.5%.

When picking a prepaid travel card you should compare the exchange rates offered as well as the card's fees.

Fees and charges to watch out for 

Prepaid cards designed for spending abroad are usually cheaper than spending on your everyday debit or credit card.

However, almost all prepaid cards currently on the market come with a variety of fees and charges. Common charges to watch out for include:

• Application fees - some providers apply a one-off charge to open the account ranging from £5 to £10, though most will offset this if you load a certain amount.
• Monthly fees - the worst prepaid cards will charge an ongoing fee just for holding the card. It can range from £2 to £5 a month, which can be hugely expensive over a year.
• Top-up fees  - if you're using a credit card to top up your prepaid card you could be charged a fee by your prepaid card provider. Plus as it counts as a 'cash transaction' your credit card provider could charge you a fee and interest. So it's usually best to use a debit card to top-up your account.
• UK and foreign ATM withdrawal fees - some prepaid cards charge for using ATMs abroad, usually £1.50 to £2 per withdrawal. Some providers will waive the fee if you withdraw a certain amount. You can minimise the risk of being hit with fees by planning how much you want to spend before you travel and taking out cash in one lump sum.
• Cross border fees - if you use your prepaid card for a transaction that's not in your card's currency, you could be charged a fee of around 2.75%.
• Inactivity fees - if you don't use your card you could also face a penalty. Some providers will charge around £2 a month if you haven't spent on the card within 12 months.
• Replacement fees - prepaid cards, like credit and debit cards, come with an expiry date, which can range between one and five years after opening. You'll normally have to pay a renewal fee of around £5 if you want to continue to use the account.
• Redemption fees  - some providers charge a fee to get any money you haven't used back. This can be up to £10 so it's wise to only load what you plan to spend and nothing more.

Prepaid cards also often come with limits on loading and transactions, which could leave you in a tricky situation if you aren't aware of them. 

Prepaid cards are a safe way to carry cash overseas. But you won't be able to spend from your main current accounts or borrow money in an emergency.

A credit card with low fees on overseas spending can work out as the best option for purchases made abroad, as long as the bill is paid off in full each month. For a credit card with low overseas spending fees, check out the best travel credit cards .

Alternatively, many banks offer debit cards with fee-free overseas spending. We round up your options in our guide to the  best debit cards to use abroad .

That said, applying for a credit card or current account for a debit card requires a credit check, whereas applying for a prepaid card doesn't. So if you have a poor or no credit history it will be easier for you to get a prepaid card.

Currensea has launched what it calls the 'first UK direct debit travel card'. This card is linked to your bank account which means you do not need to top up the card, as long as you have money in your account.

It provides a layer over your existing bank account that will allow you to spend in all 180 currencies without charges. It uses the interbank exchange rate for 16 major currencies and Mastercard rates for all other available currencies.

Currensea doesn't charge any non-sterling transaction fees or dormancy fees. For personal accounts, there is a 0.5% markup on the exchange rate. ATM withdrawals are free under a limit of £500 a month. After this, a 2% fee will be applied.

If you're considering getting a prepaid travel card, here are the pros and cons to weigh up.

Each card provider will have its own terms and conditions, so read them carefully before you sign up.

What are the pros of getting a prepaid card?

• Widely accepted around the world.
• Comes with chargeback protection.
• Can help you budget and avoid overspending.
• Could be cheaper for overseas spending and withdrawals.

What are the disadvantages of getting a prepaid card?

• Not accepted for pre-authorised transactions such as hiring a car.
• No Section 75 protection on purchases over £100.
• Low withdrawal limits and no way to borrow money in an emergency.
• Come with a variety of fees including charges for lack of use.

Still have questions about prepaid travel cards? Take a look at our FAQs to see if we have the answer.

Are prepaid cards secure?

Prepaid cards offer a secure way to carry cash when abroad.

They come with the same security features as credit and debit cards, so you need a Pin to withdraw cash or use them in person. However, many are now contactless so you may not need a Pin for smaller purchases.

It's also worth bearing in mind that prepaid cards offer no protection for losses under Section 75 of the Consumer Credit Act .

However, redress may be possible under the MasterCard or Visa chargeback scheme.

What if the prepaid card provider goes bust?

The Financial Services Compensation Scheme does not cover deposits onto prepaid cards.

Most prepaid providers will deposit customers' cash in a ring-fenced account held in a bank or building society. So, if the prepaid company goes bust, your money should be protected by the bank holding your cash.

However, if the bank or building society fails, your cash won't be protected. So you should never store lots of money on a prepaid card, just what you need to spend in the near future.

Where can I use a prepaid travel card?

Prepaid cards are usually issued by major card networks like Visa or Mastercard, meaning they can be used in millions of places around the world, as well as online, just like a debit or credit card.

You should be able to use your card at most ATMs abroad, and at most retailers that accept card payments.

However, there are some notable exceptions to this, including car hire firms, hotels and petrol stations that require pre-authorisation.

Should I pay in pounds or in the local currency?

When abroad you will sometimes be asked if you want to pay or withdraw cash in sterling or the local currency. This is called dynamic currency conversion and is usually best avoided.

With a specialist prepaid card you'll get a better rate paying in the foreign currency rather than in sterling. In fact, you might be charged a fee for paying in sterling if you don't have a multi-currency card.

What happens if my prepaid card is lost or stolen?

Like travellers cheques , your money is safe and will be replaced if the prepaid card is lost or stolen.

However, you might be charged for calling the customer helpline and for emergency card replacement by courier.

As long as you contact the provider of your prepaid card and get it blocked, you shouldn't lose out on any money, though you may have to pay up to £10 for a replacement card.

Bear in mind that if your prepaid card is contactless it could be used for a series of small, fraudulent transactions, so always alert your card provider as soon as possible. It's also worth alerting local police or security services if there's been a theft - you may need an incident number to claim losses back on your travel insurance.

Why can't I use it for car hire or a hotel room?

Most prepaid cards don't allow you to make pre-authorised transactions. These are often required when you have to pay for something where the final cost hasn't been decided, or where you use the service before paying.

As such, you may not be able to use your prepaid car to pay for petrol at the pump, hire a car, or pay for a hotel room.

What if I have an emergency or run out of money overseas?

You'll be able to load more money onto your prepaid card after you've activated it, usually through the provider website or app.

Most cards have daily withdrawal limits, so make sure you can withdraw enough cash to cover your spending for the full day.

Keep in mind that prepaid cards don't have a borrowing facility, so you won't be able to rely on it for emergency funds. For this reason, it can be wise to bring a travel credit card overseas with you, in case you need to buy flights home or pay for out-of-pocket medical expenses.

More on this

• Best travel credit cards 2024
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• Buying travel money online
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European stocks were mixed on Wednesday amidst caution ahead of the Fed, with luxury stocks on the defensive. The Euro Stoxx 50 index fell 0.2%. The German DAX index edged up 0.2%, outperforming France’s CAC index, which lost 0.5%. In the UK, the FTSE 100 flat lined.

European government bonds were range-bound, shrugging off latest comments from ECB president Lagarde. 10-year German yields edged down 2bp to 2.43%, as 10-year French yields were also down 2bp to 2.87%. Peripheral bonds traded sideways. Meanwhile, UK 10-year gilt yields fell 5bp to 4.01%, aided by a downward surprise in UK inflation data

Major Asian stock markets tracked US stocks’ overnight gains on Wednesday before the Fed’s policy decision. Chinese equities gained modestly, with earnings releases in focus after the PBoC left the benchmark lending rates unchanged. Hong Kong’s Hang Seng and China’s Shanghai Composite rose 0.1% and 0.6%, respectively. India’s Sensex edged up 0.1%, with Korea’s Kospi rebounding 1.3% after declining on Tuesday. Elsewhere, Japan’s stock market was closed for a public holiday. 

Crude oil prices retreated on Wednesday after recent rallies, as investors continued to assess the demand outlook following the sharper-than-expected drops in US weekly oil and gasoline inventory data. WTI crude for April delivery settled 2.1% lower at USD81.7 a barrel.

Key Data Releases and Events

At its March meeting, the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) left the target range for the federal funds rate unchanged at 5.25-5.50%, in line with market expectations. It remained open to cutting by 75bp in total during 2024, despite revising up its near-term inflation forecast and presenting a more positive growth outlook. The projections for policy rate in 2025 and over the longer run were nudged up. Chair Powell indicated that the Fed still thinks inflation is on an improving trend, but the path would be “bumpy” and greater confidence in the disinflation path would be needed before rates could be cut. He also highlighted that there are risks from easing policy too late as well as moving too soon or too fast. On the balance sheet, Powell indicated that the pace of run-off would be tapered “fairly soon”.

In the UK, headline CPI inflation slowed to 3.4% yoy in February, from 4.0% yoy in January, below the market consensus, largely due to favourable base effects.

COPOM, Brazil ’s central bank, maintained its gradual easing stance by lowering the policy rate 50bp as anticipated to 10.75% at its March meeting.

Releases due today (21 March 2024)

India’s Composite PMI should remain high in March, reflecting continued positive sentiment.

The Eurozone PMIs have improved in recent months but remain consistent with stagnant growth.

In the UK , the BoE is unlikely to cut interest rates in its March meeting due to persistent service sector inflation.

In the US , the S&P Global Composite Index have lately risen but remain below typical levels.

In Mexico , Banxico may cut interest rates to 11.00% in March, from 11.25% in February, led by lower core inflation.

Related Insights

Investment Outlook: HSBC Perspectives Q2 2024  

Investment Monthly: A stronger case for equities on improved fundamentals and positive growth  

Special Coverage: Fed begins to pivot to discuss rate cuts  

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HSBC Advance switch deal: Get up to £220 (2024)

Discover what hoops you need to jump through to pocket £100 now and a bonus £120 later for switching to an hsbc advance account..

In this guide

How much will you get?

Who can get this deal.

• How can you get the maximum £220 switching bonus?

The exclusions

When the offer ends.

Current accounts with

Current accounts

We compare the following banking apps

HSBC is offering up to £220 to switch to its Advance Account using the Current Account Switch Service. But there are quite a few steps to take before you get the cash!

If you’re happy to jump through all the hoops, this is the biggest deal on the market. However, keep in mind that you won’t receive the full amount for at least 12 months due to how the deal is broken down.

For a full list of switching deals on the market, you can visit our switching deals guide .

Overall, you can pocket £220 for switching to HSBC’s Advance account – but this is broken down into 2 parts.

You’ll get £100 when you make the initial switch. Then you can get £10 a month for up to 12 months, taking the total to £220. We explain what you need to do in the next section, but the requirements include depositing a minimum of £50 into the HSBC Online Bonus Saver account each month. This account’s rate is currently 4% AER, meaning that if you deposit the minimum amount of £50 each month, you’ll earn £13 in interest from your deposits after a year. The HSBC Advance Account also gives you access to HSBC’s Regular Saver at 5% AER. If you save the maximum amount of £250 a month into this account, after a year, you’ll have £81.25 in interest.

Overall, you could earn nearly £318 from this offer, but not until month 13.

This deal is available for UK residents aged 18+.

You can’t qualify if you’ve held an HSBC or first direct current account since 1 January 2019.

How can you get the maximum £220 switching bonus?

The deal is broken down into 2 parts. To get the initial £100, you need to switch an existing current account to an HSBC Advance Account using the Current Account Switch Service. You’ll also need to switch over 2 direct debits or standing orders within 30 days, pay in £1,500 within 60 days, make over 20 debit card payments, log in to the mobile banking app and deposit £50 into a new Online Bonus Saver account.

The additional £120 is paid as £10 per month for up to 12 months. To get this, you’ll need to do the following every single month: pay in £1,500, make 20 debit card payments, log in to the mobile app and deposit £50 into your Online Bonus Saver account.

You won’t receive the bonus if you’ve held an HSBC or first direct current account since 1 January 2019.

There’s no end date listed on the HSBC site, but it may be withdrawn at any time.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use . When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

Kate Steere

Kate Steere is an editor at Finder, specialising in fintech, banking and cryptocurrency. She has previously written for The Motley Fool UK and Fitch Solutions, where she covered a wide range of personal finance topics and kept a close eye on market trends. Kate has a Bachelor of Arts in Modern History from the University of East Anglia. When not working, she can usually be found curled up with a good book or heading out for a run.

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We look at switching bonuses, what they are, how they work and which banks offer the best ones. If you’re fed up with your current bank, you could switch accounts and get a nice little cash bonus as an extra perk.

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How does a credit card work?

PayPal Editorial Staff

29 December 2023

There were almost 378 million credit card transactions made in the UK in August 2023, with cardholders spending a total of £20.6 billion. 1 That's a glimpse of how embedded credit cards are in the financial lives of many people in this country.

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

In this guide, explore what credit cards are, their potential benefits and drawbacks, and some important financial considerations around interest charges, responsible credit use, and credit scores.

How a credit card works

A credit card allows people to buy goods or services up to a predetermined credit limit. When people use credit cards, they are borrowing money. The credit card provider will usually provide a monthly statement which shows their transaction history, a minimum payment that must be made and a payment due date (as well as other information). The customer can typically choose to pay off the full amount they have borrowed by the due date to avoid being charged interest or make a payment of a lower amount and carry the remaining balance over and potentially incur interest charges on the remaining debt.

• Paying off credit cards: Paying off a credit card involves settling the outstanding balance accrued through purchases. If people do not pay the full balance, the remaining amount carries over to the next month, and they may incur interest on that outstanding sum.
• Interest-free period:  Some credit cards offer an interest-free period, typically between 20 to 60 days. During this time, if people pay the full amount by the due date, no interest is charged. However, it's important to be aware of the specific terms and conditions as they may vary between cards.
• Interest:  With credit cards, the interest rate may be high, which can be an expensive way to borrow money over time. Failure to make at least the minimum payment each month may also lead to late fees and can negatively affect credit scores.

People who own a credit card will usually receive a paper or digital statement monthly. These statements typically contain:

• Transaction history: covering what was bought, for how much, and when.
• Minimum payment:  outlining the smallest amount cardholders must pay by the payment due date.
• Payment due date:  stating when the minimum repayment must be made.
• Total balance:  detailing what the total amount owing, including what the interest is.
• Credit limit:  which is the amount of credit available to the customer. This will usually also show the available credit limit that the customer can spend.

Potential pros and cons of credit cards

Credit cards could help people manage their finances. On the other hand, there are potential downfalls.

Potential benefits of credit cards

Here are some possible advantages to using credit cards:

• Convenience: Credit cards may offer a convenient way to make purchases, whether in store or online, eliminating the need for carrying large amounts of cash.
• Credit history: Responsible use of a credit card, such as making timely payments, could help build credit history. Credit history may be considered during future applications for financial products and other services.
• Emergency needs: Credit cards could serve as a financial safety net during emergencies, providing quick access to funds when needed for unexpected expenses. These can then be repaid flexibly, over time.
• Card rewards:  Some credit cards include rewards programs, which provide cardholders with points that could be redeemed for future purchases.

Potential risks and things to look out for

Consider some of the potential drawbacks to using credit cards:

• Interest charges: When people carry a balance on a credit card, they may accrue interest charges, which can accumulate quickly and lead to additional costs over time.
• Overspending: Access to credit may tempt some individuals to spend beyond their means, leading to increased debt that could be challenging to manage.
• Fees and charges: Credit cards may come with various fees, such as annual fees or late payment penalties, which may contribute to the overall cost of using credit.
• Credit scores:  Mismanagement of credit cards through overspending, late payments, or high credit use could negatively affect people's credit scores. This may make access to other financial products more difficult or more expensive.

What can a credit card be used for?

Choosing a credit card may boil down to how people intend to use it. Here are some examples:

Credit purchases

Buying on credit involves using a credit card to buy goods or services, with an understanding that the amount spent will be paid back later. A potential benefit is the flexibility to make immediate purchases. However, this could bring a risk of accumulating interest if the full amount isn't paid by the due date.

Balance transfers

Balance transfers entail moving existing credit card debt to a new card, typically with a lower interest rate. This may help individuals potentially save on interest payments. However, there may be transfer fees involved and a temptation to continue accruing debt on the original card.

Cash transactions

Cash transactions involve withdrawing money from an ATM using a credit card. Some providers allow credit card cash withdrawals. However, there may be high-interest rates and potential cash advance fees associated with these transactions, making it an expensive form of borrowing.

How could credit cards affect your credit score?

Making timely payments, keeping balances low relative to credit limits, and having a mix of credit types may improve a credit score .

Mismanagement of credit cards through overspending, late payments, or high credit use could negatively affect people's credit scores. This may make access to other financial products more difficult or more expensive.

Deciding if a credit card is suitable

Credit cards may offer convenience and the potential to build credit when used responsibly. But they also come with drawbacks such as interest charges and a risk of overspending. The suitability of a credit card often depends on an individual's personal financial habits and needs.

In addition to credit cards, there are other forms of credit people can access, such as buy now, pay later . This payment method splits purchases across a number of repayable instalments but may be associated with fees, interest charges, and other potential risks.

Learn more about PayPal Credit .

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