August 19, 2022

The Queens County Citizen

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Credit card minimum payment increases to 3.5% of balance

Credit card minimum payment increases to 3.5% of balance

The minimum amount payable on credit cards in Quebec will rise to 3.5% of the balance as of 1er August

Beginning in August, Quebecers will see their credit card require a minimum periodic payment of 3.5% of its balance, or half a percentage point higher than currently.
This amount will gradually increase each year until it reaches 5% of the balance in 2025.

The change is one of the measures approved by the National Assembly in 2017 to “prevent debt problems”. From 1er As of August 2019, any new credit card agreement must also provide for a minimum payment of no less than 5% of the balance.

Pay attention to the minimum payment

However, tax specialist Raymond Chabot cautions credit card holders about the minimum payment, which, according to them, is not a medium-term solution.

When you limit yourself to paying back the minimum amount on your credit card, the company says, you’re putting off reimbursement for your purchases. And we end up paying them more because of the interest. Making it a habit risks increasing debt and subsequently having a high debt-to-equity ratio, which can scare away lenders.

Also, repaying more than the minimum payment on a credit card can allow you to save significantly on your credit costs, the Advisors Network estimates. The company adds that the increase in the minimum amount to be reimbursed will allow credit card users to know their true repayment capacity.