The minimum payment on a credit card statement is the smallest amount that keeps the account in good standing. It is set so that most of it goes to interest while the balance is high, which is why paying only the minimum can stretch a modest balance over decades. This page explains how issuers calculate the minimum, how long payoff takes at the minimum and at fixed payments, and what changes the result. It is one of our credit card basics guides.
How the minimum payment is calculated
The Financial Consumer Agency of Canada (FCAC) describes the two formulas Canadian issuers use. Your minimum payment will be “a flat dollar amount, usually $10, plus any interest and fees, or the higher of a dollar amount, typically $10, or a percentage of your outstanding balance, typically 3%.” Which one applies is in your cardholder agreement: “Your credit agreement will tell you which method your credit card issuer uses to calculate your minimum payment.”
Quebec sets its own floor. FCAC notes: “Since August 1st, 2025, the credit card minimum payment for Quebec residents is 5%.”
Both formulas shrink as the balance shrinks, so the payment falls month after month and each smaller payment repays less principal. That declining payment is what makes minimum-only payoff so slow.
Two related rules matter when a balance carries more than one rate. FCAC says “Typically, your minimum payment will apply to the portion of your balance with the lowest interest rate,” with anything above the minimum going either to the highest-rate portion or across the balance. A balance that mixes purchases with cash advances can therefore keep its most expensive part the longest when only the minimum is paid.
The statement’s payoff estimate
For a federally regulated issuer, FCAC says “your credit card statements must include the time required to pay off your balance by only paying the minimum amount.” That estimate on your own statement uses your actual rate and formula, so it is the most direct answer to “how long will this take?” for your card.
How long payoff takes: worked examples
$5,000 balance at 19.99%, no new purchases or fees. Interest is worked out monthly at the annual rate divided by 12 (issuers charge daily interest, so a real statement differs slightly).
| Payment approach | Time to pay off | Interest paid | Total paid |
|---|---|---|---|
| Minimum: 3% of the balance, $10 floor | 20 years 4 months | $5,773 | $10,773 |
| Minimum: $10 plus the month’s interest | 41 years 8 months | $20,865 | $25,865 |
| Minimum: 5% of the balance, $10 floor (Quebec’s rate) | 9 years 10 months | $2,385 | $7,385 |
| Fixed $150 a month | 4 years 2 months | $2,357 | $7,357 |
| Fixed $250 a month | 2 years 1 month | $1,132 | $6,132 |
| Fixed $500 a month | 1 year | $515 | $5,515 |
The first payment is the same $150 under the 3% formula and the fixed $150 plan. The difference is that the fixed payment stays at $150 while the percentage minimum falls with the balance, which turns a four-year payoff into a twenty-year one. Under the “$10 plus interest” formula, only $10 of principal is repaid each month, so payoff takes 500 months.
FCAC gives its own example with the same approach: a $2,000 balance at 18% paid at $60 a month takes 3 years and 11 months and costs $793 in interest, while paying $160 a month clears it in 1 year and 2 months with $231 in interest.
What changes the result
- The interest rate. At a higher rate, more of each payment goes to interest. How credit card interest works explains how the daily rate and the interest-free grace period apply, and what counts as a good interest rate compares card types.
- New purchases. Any new spending is added to the balance and stretches the payoff. FCAC notes that when the balance isn’t paid by the due date, “you’ll pay interest from the date you made the purchase.”
- Fees. Late fees and other credit card fees are added to the balance and, under the “$10 plus interest and fees” formula, to the minimum itself.
- A fixed payment. Holding the payment at today’s minimum instead of letting it fall is the single change that shortens payoff most in the examples above.
To run your own numbers with a fixed monthly payment across one or several debts, the debt payoff calculator shows the payoff date and interest for each.
If the minimum is hard to make
Paying less than the minimum, or paying late, has its own costs: FCAC lists a possible interest rate increase, damage to your credit score, the loss of a promotional rate and the risk of the issuer cancelling the card. What happens if you miss a credit card payment covers them in full.
For a plan to clear the balance, how to get out of credit card debt compares the options. Moving the balance to a lower rate is weighed in the balance transfer calculator, ordering several debts in debt avalanche vs snowball, replacing card debt with a loan in debt consolidation loans, and getting help with a repayment plan in credit counselling.