Minimum Payment on Credit Card in Canada

The minimum payment for a credit card is the bare minimum amount that you are required to pay by the due date every month as per your credit card agreement. Failing to pay the minimum amount can result in the following:

• You could get hit with late fees
• Your annual interest rate, also known as APR (Annual Percentage Rate), could increase
• Your account could get reported to the credit bureaus, and your credit score may take a hit

Paying off the minimum can save you from late fees; however, you would still have to pay interest on the remaining balance. The interest keeps racking up for every month that you choose to pay only the minimum, and in the long run, you may even end up paying more interest than the initial balance. Additionally, it could take you several years to pay off the balance.

The exact calculation formula varies depending on the financial institution that issued your credit card and the province of your residence. However, there are three main ways in which credit card minimum payment is calculated in Canada -

1. A flat dollar rate (usually $10) plus interest and fees
2. A percentage of your account balance (such as 3% or 5%)
3. The higher of a dollar amount or a percentage of your account balance

Most often, if your balance is less than the minimum, it needs to 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
1	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.
2	BMO	For non-Quebec residents: $10.00 + Interest Charges + Fees + Total monthly installment plan payments + Overdue / Overlimit amount For Quebec Residents: Minimum payment is the greater of: (A) 5% of your balance + Previous due amount; or (B) Overlimit amount; or (C) $10 For all residents: If the monthly balance is lower than $10, the minimum payment will be equal to the balance.
3	Canadian Tire Bank	For non-Quebec residents: The minimum payment is: (i) Interest and fees; plus (ii) The greater of any amount past due or any overlimit balance; plus (iii) The amount of any installment payment then due; plus (iv) $10.00 For Quebec residents: The minimum payment is: (i) The greater of (a) interest and fees shown on your statement + $10.00 or (b) 5% of the New Balance, excluding amounts on special payment plans; plus (ii) Any balance over your credit limit; plus (iii) Any amounts past due not included in (ii) above; plus (iv) The amount of any equal payments plan installments due. For all residents: Balances under $10 are due in full.
4	Capital One	For non-Quebec residents: The minimum payment is the greater of: (A) 1% of your new balance + Interest + 1/12th of your annual fee + Past due minimum payment amount Or (B) $10 + Past due minimum payment amount For Quebec residents: The minimum payment is the greater of: (A) 5% of your new balance + Past due minimum payment amount Or (B) $15 + Past due minimum payment amount For all residents: If the required minimum payment exceeds total balance, the total balance needs to be paid. Any overlimit amount exceeding the required minimum payment will have to be paid in full.
5	CIBC	For non-Quebec residents: (i) Interest Charges; plus (ii) Fees; plus (iii) Installment payments due; plus (iv) Greater of Overdue minimum payment or Overlimit amount; plus (v) Lesser of $10.00 or Amount due minus (i) to (iv) For Quebec residents: For accounts opened on or after August 1, 2019: (i) Greater of 5% of your balance (excluding installment payment) or $10, plus (ii) Installment payments due, plus (iii) Greater of Overdue minimum payment or Overlimit amount For all residents: If the monthly balance is lower than $10, the minimum payment will be equal to the balance.
6	Desjardins	The minimum payment required is: (i) The greater of 5% of the total balance or $10; plus (ii) Installments and previous due payments
7	HSBC	Past due unpaid amounts + Overlimit amount + Greatest of the following three - (i) 3% of the new balance (5% for Quebec Residents) rounded to the next dollar; or (ii) $10; or (iii) Interest charges owing on account statement rounded to the next dollar If the new balance is lower than $10, the minimum payment will be equal to the balance.
8	Manulife Bank	For non-Quebec residents: $10 + Interest + Fees + Overlimit amount + Previous due unpaid minimum amount For Quebec residents: After August 1, 2019 (for accounts opened after June 10, 2019): The Minimum Payment is the greater of: (A) 5% of the new balance shown on your statement; or (B) $10. After August 1, 2019 (for accounts opened prior to June 10, 2019) The Minimum Payment is the greater of: (A) As Per the date of the statement- - 3.5% of your New Balance starting August 1, 2022 - 4% of your New Balance starting August 1, 2023 - 4.5% of your New Balance starting August 1, 2024 - 5% of your New Balance starting August 1, 2025; Or (B) $10 The Minimum Payment also includes any amount by which the new balance exceeds your credit limit, and any amount past due from the prior month. For all residents: Balances under $10 are payable in full.
9	MBNA	For non-Quebec residents: $10 + Interest + Fees + Overdue minimum payments + Overlimit amount For Quebec residents: For accounts opened on or after August 1, 2019: (i) Greater of 5% of your balance (excluding installment payment) or $10, plus (ii) Overdue minimum amount, plus (iii) Overlimit amount For all residents: If the new balance is lower than $10, the minimum payment will be equal to the balance.
10	Meridian	2% of the new balance or $10, whichever is greater. If the new balance is less than $10, the minimum payment is equal to the new balance. *Meridian Products and Services are not available in Quebec at this time
11	National Bank	For non-Quebec residents: 2.5% of account balance + Previous due amount For Quebec residents: 5% of account balance + Previous due amount For all residents: If the monthly balance is lower than $10, the minimum payment will be equal to the balance. If the minimum payment calculation is less than $10, the minimum payment will be $10.
12	Neo	The minimum payment is: (i) The greater of $10 or 2% (5% for Quebec residents) of the balance; plus (ii) Interest and Fees; plus (iii) The greater of Overdue or Overlimit amount If the monthly balance is lower than $10, the minimum payment will be equal to the balance.
13	PC Financial	The minimum payment is any past amount due plus the greater of: (A) $10; Or (B) 2.2% of statement balance (5% for new accounts issued to Quebec residents on or after August 1, 2019, and for all other accounts held by Quebec residents: 3.5% effective on August 1, 2022, 4% effective on August 1, 2023, 4.5% effective on August 1, 2024, and 5% effective on August 1, 2025); Or (C) The interest charges and fees billed on the current statement plus $1. If the statement balance is less than $10, then the minimum payment is the statement balance plus any past-due amount.
14	RBC	For non-Quebec residents: $10.00 + Interest Charges + Fees + Total Monthly Plan Payments For Quebec residents: For accounts created on or after August 1, 2019: The minimum payment is the greater of (A) Total Monthly Payments + 5% of the outstanding new balance on the statement; or (B) $10 For accounts created before August 1, 2019: The minimum payment is the greater of (A) Total Monthly Plan Payments, plus: - 3.5% of your New Balance starting August 1, 2022 - 4% of your New Balance starting August 1, 2023 - 4.5% of your New Balance starting August 1, 2024 - 5% of your New Balance starting August 1, 2025; Or (B) $10 For all residents: The monthly payment equals new balance if it (i) consists only of Total Monthly Plan Payments; or (ii) is less than $10. All minimum payments also include any previously unpaid Minimum Payments.
15	Scotiabank	For non-Quebec residents: $10.00 + Interest Charges + Fees + Overdue / Overlimit amount For Quebec residents: The minimum payment is: (i) Greater of 5% of the outstanding new balance on the statement or $10.00; plus (ii) Overdue / Overlimit amount For all residents: If the monthly balance is lower than the above, the minimum payment will be equal to the balance.
16	Simplii Financial	The Minimum Payment is: (i) Interest; plus (ii) Fees; plus (iii) The greater of either any amount that exceeds your credit limit or any past due amount; plus (iv) The lesser of either $10 or your Balance minus (i) to (iii). If the new balance is less than $10, the minimum payment is equal to the new balance. *Simplii Financial Products and Services are not available in Quebec at this time
17	Tangerine	For non-Quebec residents: $10 + Interest + Fees For Quebec residents: For accounts opened on or after August 1, 2019: The greater of 5% of the outstanding new balance or $10 For accounts opened before August 1, 2019: The greater of (A) As Per date of statement- - 3.5% of your New Balance starting August 1, 2022 - 4% of your New Balance starting August 1, 2023 - 4.5% of your New Balance starting August 1, 2024 - 5% of your New Balance starting August 1, 2025; Or (B) $10 For all residents: The minimum payment will include any past due or overlimit amounts. If the new balance is less than $10, the minimum required payment will be equal to the balance.
18	TD Bank	For non-Quebec residents: $10.00 + Interest Charges + Fees + Previously billed unpaid minimum balance + Overlimit amount For Quebec residents: The Minimum Payment is: (i) The greater of 5% of your balance or $10; plus (ii) Previously billed unpaid minimum balance; plus (iii) Overlimit amount For all residents: If the monthly balance is lower than the $10, the minimum payment will be equal to the balance.

While paying the minimum might seem like an easier option, it can, however, cost you much more if you make it a routine. 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 again incur interest in the following month. You could end up paying a lot extra in interest and might remain in debt for years if you keep paying only the minimum. Paying off even a little bit extra every month can save you a lot of money and help clear your debt faster.

Paying off only the minimum could also have an impact on your credit score. Even though your account would not be reported to credit bureaus for missing a payment, if you keep paying only the minimum amount, your credit utilization might remain high. It is recommended to keep your credit utilization under 30% of the credit limit to help maintain a good credit score, and higher credit utilization can have a negative impact on your credit score. If your debt was higher than the recommended credit utilization, paying only the minimum would not reduce the balance much, and your credit utilization would continue to remain high, which could hurt your credit score.

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.