Credit card debt in Canada: your options and next steps
Quick summary
If you cannot pay your credit card in full, interest is charged from the purchase date, and paying only the minimum can take years. In the Government of Canada's example, a $2,000 balance at 18% takes nearly 4 years at the minimum but about 1 year with $100 extra a month. Your options include paying extra, a balance transfer, a consolidation loan, a debt management plan and a consumer proposal. See the avalanche vs snowball payoff guide for how to order your payments.
Checked November 4, 2026. Main source: FCAC: Paying off your credit card (modified Oct. 15, 2025). See all 4 sources.
Key facts
- Minimum payment
- Often a flat amount (usually $10) plus interest and fees, or the higher of about $10 or about 3% of the balance
- Source: FCAC, modified Oct. 15, 2025
- Quebec minimum payment
- 5% of the balance since August 1, 2025
- Source: FCAC, modified Oct. 15, 2025
- FCAC example
- $2,000 at 18%: about 4 years and $793 interest at the minimum, about 1 year and $231 with $100 extra a month
- Source: FCAC, modified Oct. 15, 2025
- Balance transfer promo
- Low or 0% rate, usually about 6 to 18 months, with a fee
- Source: FCAC, modified Oct. 14, 2025
- Credit counselling
- Talking to a counsellor does not affect your credit score
- Source: FCAC, modified Oct. 14, 2025
Why the minimum payment is slow
Your issuer sets the minimum either as a flat amount (usually $10) plus interest and fees, or as the higher of a dollar amount (typically $10) or a percentage of the balance (typically 3%). Your credit agreement says which one applies. Quebec cardholders have had a 5% minimum since August 1, 2025.
If you do not pay the full balance by the due date, interest is charged from the purchase date. Cash advances often carry higher rates than purchases.
The FCAC gives this example: a $2,000 balance at 18% takes nearly 4 years and costs about $793 in interest at the minimum payment. Paying $100 extra each month cuts that to about 1 year and $231 in interest. This is the FCAC's example, not a quote for your card.
Where your extra payment goes
The FCAC says your minimum payment typically goes to the lowest-rate part of your balance. Extra payments typically go to the highest-rate part, or are split across the whole balance. Check your agreement or ask your issuer, because it differs by card.
What can happen if you fall behind
- Your interest rate can go up.
- Your credit score can drop.
- You can lose a promotional rate.
- Your card can be cancelled.
These are the FCAC's listed effects of missed or late payments. We did not find an official page with a fixed late fee amount, so we do not state one. Your agreement lists your fees. For how long late payments stay on your report, see our late payments guide.
Your options
| Option | What the FCAC says |
|---|---|
| Pay more than the minimum | Shortens the payoff time and cuts interest. |
| Balance transfer | Moves balances to a card with a low or 0% promotional rate, usually about 6 to 18 months. Missing a payment can cancel the rate, and you usually pay a fee, often a percentage of the amount transferred. |
| Consolidation loan | A personal, debt consolidation or home equity loan with regular payments and a set repayment period. It can cost more over time if it stretches out repayment, and with weak credit the rate may be higher than your current debts. |
| Line of credit | Borrow up to a limit and pay interest on what you use. Payments often cover only the interest, and rates are usually variable. |
| Debt management plan | A counsellor asks your creditors to combine your debts into one monthly payment, and you usually repay the full amount. Creditors may lower interest or fees, but some may decline. Compare the agency's fees with the interest you would save. |
| Consumer proposal | A legal process for repaying debt, arranged through a licensed insolvency trustee. Trustees typically give a free first assessment. |
Getting help from a credit counsellor
The FCAC says talking to a counsellor will not affect your credit score. Check that the agency belongs to a recognized association and has no serious unresolved complaints. Reputable agencies do not charge for the first meeting. Be wary of any claim to erase debt quickly or fix your credit fast.
A debt management plan does not usually cover secured debts such as mortgages and car loans. You must list all your debts, pay on time and avoid new credit. Missed payments can cancel the plan.
Steps to get back on track
- List every card with its balance, interest rate and minimum payment.
- Set up automatic minimum payments so none is missed.
- Put any extra money on one card. Avalanche means the highest rate first. Snowball means the smallest balance first.
- Call your issuer and ask what help it offers if you are having trouble paying.
- Get help if you can only afford the minimums, use one card to pay another, or collectors are calling.
What we could not confirm
- A fixed late fee amount. The FCAC pages we read do not give one.
- How long until an account goes to collections. The FCAC pages we read do not give a number.
- How much your score drops. It depends on your report.
Questions people ask
What is the minimum payment on a credit card in Canada?
The FCAC says it is often a flat amount (usually $10) plus interest and fees, or the higher of about $10 or about 3% of the balance. Quebec has a 5% minimum since August 1, 2025. Your agreement states yours.
Does credit counselling hurt my credit score?
The FCAC says simply talking to a counsellor will not affect your credit score. A debt management plan may be noted by lenders, so ask the agency how it is reported.
Is a balance transfer a good idea?
It can pause interest for about 6 to 18 months, but you usually pay a fee and missing a payment can cancel the rate. It helps only if you can pay the balance down in that time.
What is a consumer proposal?
A legal process for repaying debt, arranged through a licensed insolvency trustee. Trustees typically give a free first assessment.
Try it with your numbers
Does your province have its own rules?
Who licenses collectors, how much of your pay can be taken and which agencies can help are set by each province. Pick yours to see where to look. We remember your choice on this device only.