Canadian borrowing guide
Canadian credit-card repayment planning
Understand how your balance, interest rate and monthly payment affect the time and interest needed to repay a card.
In short
Paying more than the minimum can reduce both the interest charged and the time needed to clear a credit-card balance. Avoiding further spending is usually essential for a repayment plan to work.
Why the repayment amount matters
Interest is normally charged on the outstanding balance. When the monthly payment is only slightly above that interest, very little of the balance is reduced. A larger regular payment reduces the balance sooner, which can reduce future interest too.
How to use a repayment estimate
Start with the balance currently owed and the annual percentage rate shown on the account. Enter the total amount you expect to pay each month, then test an extra amount that is realistic for your budget. Compare the estimated payoff time and interest before deciding what you can sustain.
Keep the plan realistic
A repayment estimate assumes the balance, interest rate and payment stay the same. New card spending, cash advances, fees, missed payments, promotional-rate expiry and interest-rate changes can all alter the result. Keep an emergency buffer where possible rather than committing to a payment you may not be able to maintain.
Use the credit-card repayment calculator to compare a planned monthly payment with an extra-payment scenario. It is a planning estimate, not debt, financial or legal advice.