What is a minimum payment on credit card?

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Paying only the minimum payment on your credit card is like delaying your financial duties. In Canada, it’s often a fixed amount like $10 or around 2-3% of the balance. For a $2,000 debt, a 3% minimum means paying $60. Regulations can vary, so always check your card terms. In Quebec, prepare for a minimum hike to 5% by 2025, affecting your budget. Reach out via phone, text, or live chat if you have questions.

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What A Minimum Payment On Credit Card Is Question Question

What is a minimum payment on credit card? I got my first credit card statement and saw “minimum payment” but don’t know how they calculate it, so I want to understand what that really means.

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

What A Minimum Payment On Credit Card Is Question Answer

Paying the minimum on your credit card is like hitting the snooze button on financial obligations. It’s the least you need to pay every month to keep your account on track and avoid those sneaky late fees. In Canada, this usually means coughing up a fixed amount, like $10, or a slice of your outstanding balance—think 2% to 3%. So, if you’re staring at a $2,000 balance, get ready to shell out $60 if your minimum rate is 3%. But here’s the catch: if the percentage calculation is lower than the fixed rate, it’ll default to that fixed amount. Always keep an eye on your credit card terms, as the rules can play by their own book depending on your issuer and card type. And for our friends in Quebec, don’t snooze on this! By August 2025, the minimum payment leaps to 5%, which might make you rethink your budgeting game. If you’re struggling with credit card debts, you might want to explore different options like a Consumer Proposal.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

The minimum payment on a credit card is typically calculated as a percentage of your outstanding balance plus any interest and fees, or it may be a fixed dollar amount, whichever is greater. This calculation method is not specifically detailed in federal legislation but is commonly derived from industry practices guided by the Bank Act and the Credit Business Practices Regulations. For specific percentages or fixed amounts, refer to your credit card issuer’s policy, as these can vary by lender. Be sure to review your credit card terms for the exact formula they use for calculating the minimum payment.

From: OSB Helper

Related Questions to Minimum Payment On Credit Card

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

What is the minimum payment on a credit card?

The minimum payment on a credit card is the least amount you must pay to remain in good standing, which in Quebec will be at least 5% of the statement balance starting August 1, 2025[2][4].

How is the minimum payment on a credit card calculated?

The minimum payment is typically calculated as a percentage of the statement balance, such as 5% for new credit cards in Quebec, or it may include a fixed amount plus interest and fees[2][5].

Why is the minimum payment on credit cards increasing?

The minimum payment is increasing to help consumers repay their debt faster and reduce overall credit card debt, particularly to avoid consumer over-indebtedness[1][2].

Do all credit cards have the same minimum payment requirements?

No, minimum payment requirements can vary; in Quebec, new credit cards opened after August 1, 2019, require a 5% minimum payment, while older contracts are being phased in to this rate[2][3].

How will the new minimum payment rules affect my credit card payments?

Starting August 1, 2025, all credit card holders in Quebec will need to make minimum payments of at least 5% of their statement balance, which may increase the monthly payment amount significantly[2][4].

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

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