Higher Minimum Payments on Credit Cards: Here’s How Long It Will Take to Pay Off Your Debt

The increase in the percentage required for the minimum payment on credit cards in Quebec, effective Monday, is aimed in particular at reducing family debt.

• Read also: The minimum payment on your credit card will be higher as of Monday

By paying a higher minimum, consumers must pay less interest because the balance will decline more quickly.

The high interest rates on these credit cards, usually between 19.99% and 22.99%, mean that it takes several years to pay off the entire balance.

But if the minimum payment percentage increases from 3% to 3.5%, the number of years required to make the repayment will decrease significantly.

So here’s how many years it would now take to pay off the entire credit card balance at 19.99% and make a minimum monthly payment of 3.5%:

– Balance of 1000 dollars : 8 years and 11 months

– Balance of 5000 dollars 16 years and 2 months

– Balance of $10,000 : 19 years and 4 months

– Balance of $20,000 : 22 years and 5 months

–Source: Canadian Financial Consumer Agency

Here’s how many years it took to pay off the entire credit card balance at 19.99%, with a minimum monthly payment of 3%:

– Balance of 1000 dollars : 10 years and 11 months

– Balance of 5000 dollars : 20 years and 2 months

– Balance of $10,000 : 25 years and 3 months

– Balance of $20,000 : 29 years and 6 months

–Source: Canadian Financial Consumer Agency