What is the credit card minimum payment?

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In Canada, credit card minimum payments are typically set at 2-3% of your balance or a fixed amount plus any accrued charges. Quebec stands out with a rising rate starting at 4.5% in 2024. Keep an eye on these variations to manage your payments effectively. Stay informed and empowered, and reach out via phone, text, or live chat if you have any questions!

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Credit Card Minimum Payment Question

What is the credit card minimum payment? DEBT INSIDERS I’ve been making minimum payments on my credit card but want to understand how they are calculated.

From: Anonymous Question
Location: Abbotsford, British Columbia (BC)
Category: debt management plan

Credit Card Minimum Payment Answer

In Canada, credit card minimum payments are usually determined in one of two straightforward ways. The first approach is a flat percentage of what you owe, typically between 2-3%. So, if you owe $2,000, you’re looking at a minimum payment of $60 if the rate is 3%. The second method combines a fixed amount, often around $10, plus any interest and fees that have piled up. This way, even if you have a smaller balance, let’s say $100, you’ll still need to pay at least $10, even though a 2% of that would normally be less. Fun twist: Quebec likes to march to its own beat when it comes to minimum payments. As of August 2024, they start at 4.5% and will increase to 5% in 2025, setting themselves apart from the rest of Canada with credit card debt solutions!

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

In Canada, credit card issuers must disclose the minimum payment calculation in accordance with the guidelines provided under the Cost of Borrowing Regulations (C.R.C., c. 369). Specifically, Section 5 outlines that the minimum payment must include either the interest accrued on the outstanding balance or a percentage of that balance, typically around 2% to 5%. For a precise calculation, refer to your credit card issuer’s terms and conditions.

From: OSB Helper

Related Questions to Credit Card Minimum Payment

Here are the top 5 most frequently asked questions related to credit card minimum payments in Canada, along with brief answers:

1. How is the credit card minimum payment calculated?

The minimum payment is typically calculated as a flat dollar amount (usually $10) plus any interest and fees, or as a percentage of the outstanding balance, usually 2% to 5%, whichever is greater[1][3][5].

2. What happens if I only pay the minimum credit card payment?

Paying only the minimum payment means it will take longer to pay off the balance, and you will pay more interest over time[3][5].

3. How does the minimum payment differ for residents of Quebec?

For Quebec residents, the minimum payment is never less than 5% of the balance owing, as per provincial regulations[1][3][5].

4. What are the consequences of not paying the minimum credit card payment?

Not paying the minimum payment can result in late fees, increased interest rates, negative impacts on your credit score, and potential cancellation of your credit card[3][5].

5. How can paying more than the minimum credit card payment benefit me?

Paying more than the minimum payment can significantly reduce the time it takes to pay off the balance and lower the total amount of interest paid[3][5].

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

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