Credit Card Minimum Payment Calculator

The minimum payment for a credit card is the smallest amount you must pay for your credit card bill. Failing to pay the minimum amount can result in the following:

• You could get hit with late fees.
• Your APR (Annual Percentage Rate) may increase.
• Your credit score may decrease significantly.

Paying off the minimum can help you avoid the negative consequences of not paying your debt obligations, but it will not help you avoid interest charges that may become large over time. The interest keeps adding up every month, proportional to your remaining balance. You may even pay more interest than the initial balance if you keep contributing the minimum required amount only. Additionally, it could take you several years to pay off the balance.

You can always find the credit card minimum payment on your credit card statement. You do not need to calculate your own minimum payment unless it is for a hypothetical scenario.

Your minimum payment is calculated based on your lender and provincial laws. Most provinces and lenders have similar credit card minimum payment rules. Only Quebec has different laws that affect credit card minimum payments in the province. Generally, Quebec residents have higher minimum payment requirements, which saves them a lot in interest compared to other provinces.

The following calculations are often used to identify the minimum payment required:

• Most of Canada: A flat dollar rate (usually $10) plus interest and fees.
• Quebec Residents: 3% to 5% of your account balance.
• The higher of a dollar amount or a percentage of your account balance.
• If your balance is less than the flat dollar amount, it must be paid in full.

The minimum payment calculation information can be found on your cardholder’s agreement or a disclosure statement. When you start a credit card application online, you are prompted with the cardholder's agreement or disclosure statement for review before proceeding to enter your details.

If you already have a credit card, you can find the agreement by logging into your account online or in the information leaflet that you received with your credit card. You can also contact your credit card issuer through a customer service phone number or chat portal for this information.

Listed below are the credit card minimum payment criteria for the major credit card issuers in Canada for your reference.

Company/Bank

Minimum Payment

Amex

For non-Quebec residents: $10 + Interest + Fees + Previously billed unpaid minimum balance + Installments if applicable For Quebec Residents: For accounts opened on or after August 1, 2019: 5% of the remaining balance owing that month August 1, 2022 – 3.5% August 1, 2023 – 4% August 1, 2024 – 4.5% August 1, 2025 – 5% Any previously billed unpaid minimum amount and any applicable installments would be added to the minimum payment. For all residents: If the monthly balance is lower than the above, the minimum payment will be equal to the balance.

The less you pay towards your balance, the more interest you will pay in the future. When you pay only the minimum, most of the payment goes towards paying off the interest and very little gets subtracted from the balance owed. The remaining balance will incur interest in the following month, which must be paid off. You may pay close to double your principal on a $1000 credit card balance that is being covered only with the minimum payments. Credit card debt at major financial institutions in Canada has increased from $84 billion in 2019 to $102 billion in 2024. Paying off even a little bit extra every month can save you a lot of money and help clear your debt much faster.

Paying off only the minimum amount may also impact your credit score. Even though your account would not be reported to credit bureaus for credit card minimum payment your credit utilization may remain high for a long time.

You should keep your credit utilization under 30% of the credit limit to help maintain a good credit score. High credit utilization lowers your credit score until it drops to an acceptable limit. Paying the minimum required amount does not significantly reduce the balance, so your credit utilization remains high and hurts your credit score. Your credit score will recover from high utilization once you pay off most of your balance.

Apart from the balance, the interest and fees, there may be some other factors that affect your minimum payment.

1. Overlimit amount: If you spent more than your credit limit in a particular cycle, your credit card company might require you to pay the overlimit amount along with your minimum payment. You may also be charged an overlimit fee for going above your credit limit.
2. Overdue amount: If you failed to pay any previously due amount, you might also be required to pay that off along with the minimum payment.
3. Installments: If you have opted for an installment plan to pay off your balances, the installments are usually added to the minimum payment, and you are required to pay off the installments due every month.

Here are some strategies you could use to pay off your credit card debt.

1. Transfer your balance to another credit card: Some credit cards offer a promotional balance transfer rate and a low interest for a certain period of time. By transferring your balance to such a card, you could start paying off the principal balance without having to pay a lot of interest. If you expect to be paying off the balance for a long time, you could transfer the balance to a low-interest credit card so that you could reduce the interest amount that you pay.
2. Pay off the credit card with the highest interest balance first: This is applicable if you have debt on more than one credit card. By paying off the highest interest balance first, you can reduce the interest accrual and would ultimately end up paying less. Once the card with the highest interest is paid off, move to the card with the next highest interest rate. This method is known as the avalanche method. Be sure to keep paying at least the minimum amount on other cards while you are paying off the highest-interest credit card.
3. Pay off the credit card with the least amount of balance first: The smallest balance might be the easiest to pay off completely, and paying it off may be a psychologically encouraging factor in your debt repayment journey. Paying off the smaller debts completely can make you feel like you have made progress as opposed to having paid off only a small portion of bigger debt amounts which might be discouraging. This method is known as the snowball method. However, it is noteworthy that you would likely end up paying more interest than the avalanche method.
4. Consolidate your debt with a loan or line of credit: If you have multiple high-interest debts, you could consolidate all of them into one loan. You could apply for a debt consolidation loan or tap into your home equity through a home equity line of credit (HELOC) to start paying off the loan. Doing so can help you get organized and keep track of your debt repayment.
5. Opt for an installment plan: If your credit card issuer offers an installment plan on your credit card, it may be worthwhile to consider the same. This can help you spread out the payments, and you may also end up paying less interest.

The minimum credit card payment option can be useful during tough times, such as when you are in between jobs or when you are faced with an emergency. In an emergency situation, it may also be worthwhile to find out if you have balance insurance. However, it is not advisable to make it a habit to pay just the minimum. Paying even a little extra could save you thousands of dollars in interest and help pay off your debt much faster. The best option is to always pay off your credit card balance in full by the due date indicated on the statement.