Every Canadian credit card statement shows a minimum payment — the smallest amount you must pay to keep your account in good standing. Paying only this amount is legal, convenient, and financially devastating.
How Minimum Payments Are Calculated in Canada
The Financial Consumer Agency of Canada (FCAC) requires that minimum payments cover at least:
- All interest charged in the billing period
- All fees charged in the billing period
- Plus 1%–3% of the principal balance (or $10, whichever is greater)
Different issuers use different formulas. Common structures:
| Issuer | Minimum Payment Formula |
|---|---|
| TD | Greater of $10, interest + fees + 1% of balance |
| RBC | Greater of $10, or 2% of balance + interest + fees |
| Scotiabank | Greater of $10 or 3% of new balance |
| BMO | Greater of $10 or 2% of balance + interest + fees |
| Amex | Greater of $35 or 2% of balance (if no interest) |
| CIBC | Greater of $10 or 3% of new balance |
On a $3,000 balance at 19.99%, the minimum payment is typically around $75–$90/month — covering mostly interest with a tiny slice of principal.
The True Cost of Paying the Minimum
| Balance | Rate | Min Only | Time to Pay Off | Total Interest Paid |
|---|---|---|---|---|
| $1,000 | 19.99% | ~$25 | ~7 years | ~$820 |
| $3,000 | 19.99% | ~$75 | ~14 years | ~$4,100 |
| $5,000 | 19.99% | ~$125 | ~20 years | ~$8,400 |
| $10,000 | 19.99% | ~$250 | ~30+ years | ~$20,000+ |
A $3,000 balance paid at the minimum only will cost more than double in total interest before it’s eliminated — and take 14 years.
Why the Minimum Payment Trap Works
On a $3,000 balance at 19.99%:
- Monthly interest = ~$50
- Principal in minimum payment = ~$25
- Net debt reduction per month = ~$25
At $25/month reduction, it takes over 10 years just to make a meaningful dent. The card issuer earns interest every single month in the meantime.
FCAC Regulatory Statement on Statements
Since 2019, Canadian credit card statements are required by FCAC to show an interest cost disclosure box that illustrates how long it will take to pay off your balance if you pay only the minimum — and how much total interest you’ll pay. This regulation was explicitly designed to show Canadians the real cost of minimum-only payments.
What to Pay Instead
| Payment Amount | Time to Pay Off $3,000 | Total Interest |
|---|---|---|
| Minimum only (~$75) | ~14 years | ~$4,100 |
| $150/month | ~2 years 2 months | ~$740 |
| $200/month | ~18 months | ~$565 |
| $300/month | ~11 months | ~$315 |
| Full balance ($3,000) | Immediately | $0 |
The goal is always to pay the full statement balance. If you can’t, pay as much above the minimum as possible.
Late Payments vs. Minimum Payments
Missing a payment entirely: Triggers a late fee ($25–$45), may result in a penalty interest rate (up to 24.99%), and is reported to credit bureaus after 30 days — damaging your credit score.
Paying the minimum: Keeps the account current. No late fee. No credit score impact — but interest compounds every month.
Set up autopay for the minimum as a safety net — this prevents missed payments. Then manually pay more each month when possible.
Related Articles
- How to Read Your Credit Card Statement
- How Credit Card Interest Works in Canada
- Best Balance Transfer Credit Cards in Canada
- Best Low-Interest Credit Cards in Canada
- Credit Card Basics — Canada Guide
Minimum payment formulas vary by issuer and can change. Refer to your cardholder agreement for your specific minimum payment calculation. See our Advertiser Disclosure.