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 reimburse 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% of the balance (minimum payment)

$3,001 in credit charges, over nearly 26 years

50% of the balance

$34 in credit charges, over 8 months

100% of the balance

$0 in credit charges

Try it out yourself

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

If you entered into your contract on or after August 1, 2019, the minimum payment provided for in your contract cannot be less than 5% of the balance owing.

If you entered into your contract before August 1, 2019, the credit card issuer cannot charge a minimum payment that is lower than the following percentage of the balance owing:

  • 2%, as of August 1, 2019;
  • 2.5%, as of August 1, 2020;
  • 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.

Check your contract if you entered into it before August 1, 2019. If it provides for a minimum payment of 2% or more of the balance owing, the issuer must charge you the percentage provided for in the contract. Otherwise, a minimum payment of 2% must be charged.

The purpose of this change is to prevent debt problems. By reimbursing more of your debt each month, you will pay less interest.

To find out more (in French only)

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
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! As of August 1, 2019, 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?

Find out more about credit cards

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

Solutions

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)