Credit Card Minimum Payments in Canada: What They Really Cost

The minimum payment on your credit card statement is the smallest amount you can pay to keep your account in good standing. It feels manageable, and that’s the problem. Paying only the minimum keeps you in debt for years and can more than double what you end up paying.

Here’s how minimum payments work in Canada, what they really cost, and a simple way to get out from under them.

How your minimum payment is calculated

Each card issuer sets its own formula, which you’ll find in your cardholder agreement. Common approaches in Canada include a small percentage of your balance (often around 2% to 3%), or the interest charged that month plus a small percentage of the balance, with a floor of about $10. Because the minimum is tied to your balance, it shrinks as your balance shrinks. That’s why it takes so long to reach zero.

What paying only the minimum really costs

Paying off $3,000 at 20.99%: time and interest

Interest paid

Minimum only (3% or $10) · 18 yrs 2 mos$3,750

$100 a month · 3 yrs 7 mos$1,290

$150 a month · 2 yrs 1 mo$724

$300 a month · 1 yr$327

The difference comes from one simple change: paying a fixed amount instead of the shrinking minimum. With a fixed payment, every dollar you pay above the monthly interest goes to the balance, and that share grows every month.

The grace period: how to pay zero interest

Canadian cards from federally regulated financial institutions must give you an interest-free grace period of at least 21 days on new purchases. If you pay your full statement balance by the due date, you won’t pay any interest on those purchases. Carry even part of the balance past the due date, and interest applies. Cash advances are different: they usually start charging interest right away, with no grace period.

How to break the minimum-payment cycle

A simple plan

1. Know your number

   Plug your balance and rate into our credit card payoff calculator and choose a monthly payment that gets you out on a timeline you can live with.

2. Automate it

   Set up an automatic payment for that fixed amount, not the minimum, a few days before the due date.

3. Freeze new spending on that card

   Use debit or cash for day-to-day purchases while you pay it down.

4. Cut the rate if you can

   Ask your issuer for a lower rate, or look at a low-rate card or balance transfer offer if the numbers work.

5. Put windfalls to work

   Tax refunds, bonuses and side income make excellent lump-sum payments.

This article is general information, not financial advice. Minimum payment formulas vary by issuer; check your cardholder agreement. Examples are illustrative and rounded. Last reviewed September 2026.