Minimum Payment: Maximum Interest Minimum Payment: Maximum Interest

MAKING THE MINIMUM PAYMENT ON YOUR CREDIT CARD BALANCE CAN BE VERY EXPENSIVE

The minimum payment is the portion of your credit card balance you have to pay every month.

If you only pay that amount, you're in "good standing." Over time, however, it gets very expensive! You'll be reimbursing that debt for a long time. You'll pay a high cost in credit charges, including a lot of interest.

EXAMPLE OF CREDIT CHARGES PAID

A $1,000 purchase using a credit card at 19.9% with a monthly payment of:

2.5% of the balance (minimum payment)

$1,444 in credit charges, over more than 14 years

50% of the balance

$34 in credit charges, over 8 months

100% of the balance

$0 in credit charges

Are you having trouble making the minimum payment?

There are solutions.

Start by contacting the credit card company. You may be able to work out an agreement.

You can also turn to consumer protection organizations. They offer budget consultation services free of charge: tips on managing your personal finances, settling your debts, etc.

Find a consumer association (in French only)

How much will it cost? Try it out

1- Credit card purchases

TOTAL PURCHASES:
$0

2- Terms of the credit contract

Credit rate  :  %

Minimum payment  :  %  or  $ 

3- Consequences of only making the minimum payment...

The credit charges add up to $0. It will take 0 months to fully reimburse your balance.

In total, the purchases will have cost $0. Show details

Period Amount to Reimburse Minimum Payment Credit Charges Balance Owing After Making a Minimum Payment

4- Solutions to pay less in credit charges

Reimbursing your balance more quickly

I want to reimburse everything in months, with equal payments.

Your monthly payment will be $0.

The credit charges will add up to $0.

Making higher payments

I will make payment of $ per month.

It will take 0 months to reimburse everything.

The credit charges will add up to $0.

Increase in the minimum payment

The increase in the minimum payment aims to prevent debt problems. By reimbursing more of your debt each month, you pay less in credit charges.

Contract entered into on or after August 1, 2019

The minimum payment provided for in your contract may not be less than 5% of the balance owing.

Contract entered into before August 1, 2019

If the minimum payment percentage for your credit card was set at less than 2.5%, as of August 1, 2020, the minimum payment to be made every month must correspond to 2.5% of the balance owing.

The credit card issuer may charge more than 2.5% if the contract already provided for that possibility, but not if they amended the contract so as to charge more than 2.5% without your consent.

Over the coming years, credit card issuers will have to charge a minimum payment that corresponds to at least the following percentage of the balance owing:

  • 3%, as of August 1, 2021;
  • 3.5%, as of August 1, 2022;
  • 4%, as of August 1, 2023;
  • 4.5%, as of August 1, 2024;
  • 5%, as of August 1, 2025.

To find out more

Paying less in credit charges

Here is how the amount of the minimum payment affects the credit charges you have to pay.

A $1,000 purchase with a credit card at 19.9%

Minimum Payment (percentage of balance) Total Credit Charges Time Required to Fully Reimburse
2% $3,001 Nearly 26 years
2.5% $1,444 More than 14 years
3% $980 Nearly 11 years
5% $442 6 years

What if you only make the minimum payment? If it is set at 5% (rather than 2%) of your credit card balance, you will save $2,559 in credit charges!

Reading your account statement

Take a look at your account statement! You will see an estimate of the time it will take to reimburse everything, if you only make the minimum payment. You will also find your card's credit rate. Do you know how high it is?

To find our more on the account statement

Find out more about credit cards

Consult other resources offered by the Office de la protection du consommateur: