HSBC UK launches credit card instalments to help customers with repayments
The new feature, called ‘Instalment plans’, is available through the bank’s mobile app and enables eligible credit card customers to convert recent spend into bespoke instalment plans - dividing spend of at least £250 into 3, 6 or 12 equal monthly payments.
The feature is interest free and comes with a small monthly fee, which can be as little as £1.67 for a 3-month plan repaying £250. The amount of the instalments and fees will depend on the plan amount and period and it will be consistent each month customers have the plan. Purchases of at least £100 can be amalgamated to meet the £250 minimum, and customers can have up to 6 plans at one time.
This could help customers pay less with an instalment plan as it will reduce the amount of interest they pay on their card. For example - a customer on a typical APR of 21.9% could save £99.16 by repaying £1,500 on an instalment plan compared to repaying it over the same period without an instalment plan.
The feature is designed to help customers spread the cost in a simpler way that gives customers more control. They can use their existing credit card limit, do not need to apply for additional lending and choose to use their card as normal or opt to spread the cost at any time.
The simple process in the HSBC App will provide quotes for different instalment plans, helping customers agree repayment plans which can be automatically managed and it will also give customers the option to personalise plans to suit the customer needs. They can also enjoy all the existing credit card offers and features in the app.
Andrew Rankin, Head of Unsecured Products, HSBC UK said:
‘Customers have told us that they would welcome an option to repay their credit card spend in instalments and we are excited to launch these instalment plans. Enabling customers to spread larger payments into instalment plans and combine purchases made at different times will not only help them budget with a pre-defined monthly payment, they can also combine different items in one plan to help them understand their spend.
“For example, a customer may have a bought items of furniture from different shops, and combining them into one payment plan may make it easier for them.
“Customers may also find it helpful to pay for a higher cost individual item like a new laptop or phone. Splitting the cost into equal payments with a pre-determined end date and small fee may be preferable to them and gives them more flexibility.
“With clearly defined repayment terms, monthly and total costs, the instalment plan will help customers with their budget and give them more control of their finances.”
For more information, please visit: https://www.hsbc.co.uk/help/card-support/instalments/
Media enquiries to:
Steve Gracey, HSBC UK Media Relations | steve.gracey@hsbc.com | 020 7991 4118
Email: UKPressOffice@hsbc.co.uk
Note to editors:
Note: The examples are for illustrative purposes only. Actual saving may be more or less than the amount shown, depending on the plan term.
Costs of instalments vs no instalment plan
Indicative cost savings
| £2,000.00 | £1,500.00 | £1,000.00 | £500.00 | ||
|---|---|---|---|---|---|
| Instalment term / fee | 12m / 4.5% | £132.31 | £99.16 | £66.11 | £33.05 |
| 6m / 3% | £56.97 | £42.73 | £28.49 | £14.24 | |
| 3m / 2% | £26.11 | £19.59 | £13.06 | £6.53 | |
Repay £2,000 over a period of 12 months
| Instalment plan | No instalment plan |
| Fees | Interest |
| £90 Total monthly fees (4.5% of the plan amount) |
£222.31 Total interest on purchases (based on fixed monthly payments) |
| The equivalent annual interest rate to the fees is 8.2% | The simple annual rate used to work out interest is 20% This assumes the credit card APR is 21.9% |
| Monthly payment : £174.17 Including monthly fee |
Monthly payment : £185.19 Fixed payment including interest |
| Total amount to pay: £2,090.00 | Total amount to pay: £2,222.31 |
Using this example, you’d save £132.31 with an instalment plan.
Repay £1,500 over a period of 12 months
| Instalment plan | No instalment plan |
| Fees | Interest |
| £90 Total monthly fees (4.5% of the plan amount) |
£166.66 Total interest on purchases (based on fixed monthly payments) |
| The equivalent annual interest rate to the fees is 8.2% | The simple annual rate used to work out interest is 20% This assumes the credit card APR is 21.9% |
| Monthly payment : £130.63 Including monthly fee |
Monthly payment : £138.95 Fixed payment including interest |
| Total amount to pay: £1,567.50 | Total amount to pay: £1,666.66 |
Using this example, you’d save £99.16 with an instalment plan.
Repay £1,000 over a period of 6 months
| Instalment plan | No instalment plan |
| Fees | Interest |
| £30 Total monthly fees (3% of the plan amount) |
£58.51 Total interest on purchases (based on fixed monthly payments) |
| The equivalent annual interest rate to the fees is 10.2% | The simple annual rate used to work out interest is 20% This assumes the credit card APR is 21.9% |
| Monthly payment : £171.66 Including monthly fee |
Monthly payment : £176.42 Fixed payment including interest |
| Total amount to pay: £1,030.00 | Total amount to pay: £1,058.51 |
Using this example, you’d save £28.51 with an instalment plan.
Repay £500 over a period of 3 months
| Instalment plan | No instalment plan |
| Fees | Interest |
| £10 Total monthly fees (2% of the plan amount) |
£16.53 Total interest on purchases (based on fixed monthly payments) |
| The equivalent annual interest rate to the fees is 12.0% | The simple annual rate used to work out interest is 20% This assumes the credit card APR is 21.9% |
| Monthly payment : £170.00 Including monthly fee |
Monthly payment : £172.18 Fixed payment including interest |
| Total amount to pay: £510.00 | Total amount to pay: £516.53 |
Using this example, you’d save £6.53 with an instalment plan.
More information can be found on HSBC UK’s public website.
HSBC UK
HSBC UK serves around 14.5 million customers across the UK, supported by 32,000 colleagues. HSBC UK offers a complete range of retail banking and wealth management to personal and private banking customers, as well as commercial banking for small to medium businesses and large corporates.
HSBC Holdings plc
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 64 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,959bn at 31 March 2021, HSBC is one of the world’s largest banking and financial services organisations.