What is a minimum credit card payment?

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Think of the minimum credit card payment as the least you need to avoid fees and keep your account in good standing. It’s usually higher between a fixed amount or a percentage of your balance—typically 1% to 3%. In Quebec, this will rise to a mandatory 5% starting August 1, 2025. Stick to the minimum, and you might face dragged-out debts and higher interest. Have questions? Reach out via phone, text, or live chat!

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Minimum Credit Card Payment Question

What is a minimum credit card payment? I see a minimum payment on my credit card statement and wonder how it’s calculated. I want to learn what factors go into that number.

From: Anonymous Question
Location: London, Ontario (ON)
Category: debt management plan

Minimum Credit Card Payment Answer

The minimum credit card payment is the bare minimum amount you need to shell out by the due date to dodge any annoying fees and keep your account in good standing. It’s usually calculated as the higher of a fixed amount (often around $10) or a slice of your outstanding balance, typically between 1% and 3%. So, if you’re looking at a balance of $2,000 and your minimum is 3%, you’ll need to pay at least $60, as long as this tops the fixed $10. Now, a little heads-up for Quebec residents: come August 1, 2025, expect the minimum payment to bump up to a mandatory 5% of the balance or $10, whichever is more, and it applies to all contracts, whether they were signed before or after 2019.

A bunch of factors can tweak your minimum payment, like your outstanding balance, the percentage rate used, any fixed minimums your issuer sets, and other bits like interest and fees. Bank policies can be all over the map, too, plus there are regional rules like Quebec’s. Now, paying just the minimum might sound tempting but watch out—it can drag out your debt payoff and hike up those interest charges, not to mention potentially bruising your credit score a little. Got questions? Give us a shout via phone, text, or live chat!

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

The minimum credit card payment is typically calculated based on a percentage of the current balance or a fixed dollar amount, whichever is higher. This calculation may include factors such as the interest charges accrued during the billing cycle and any fees associated with the account. Commonly, the formula takes into account the total outstanding balance, the interest rate, and other fees, according to the credit agreement. Specific regulations governing these practices can be found in the Bank Act and its related regulations, particularly in sections addressing credit terms and disclosures. For precise details, refer to the Bank Act (RSC 1970, c. B-3) and the relevant financial consumer protection regulations.

From: OSB Helper

Related Questions to Minimum Credit Card Payment

Here are the top 5 most frequently asked questions related to minimum credit card payments, based on current trends and concerns:

What is the minimum credit card payment in Quebec?

• The minimum credit card payment in Quebec will be at least 5% of the statement balance starting August 1, 2025[3][4].

How is the minimum credit card payment calculated?

• The minimum payment is typically a percentage of the statement balance, which can vary but is set by regulations or the credit card company’s policy[3].

Why are minimum credit card payments increasing?

• The increase is aimed at reducing credit card debt and avoiding consumer over-indebtedness by requiring higher monthly repayments[2][4].

Do all credit cards have the same minimum payment percentage?

• No, the minimum payment percentage can differ depending on when the credit card was opened and the specific regulations in place, such as the 5% rule for cards opened after August 1, 2019, in Quebec[2][3].

How does the minimum payment affect my credit card debt repayment?

• Paying a higher minimum payment reduces the time it takes to pay off the full balance and saves on interest and other credit fees[3][4].

If you have a question about debt see our debt questions or ask your own debt related question.

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