August 9, 2022

The Queens County Citizen

Complete Canadian News World

Higher minimum payment on credit cards: Here’s how long it will take you to pay off your debt

Higher minimum payment on credit cards: Here's how long it will take you to pay off your debt

A percentage increase required for the minimum payment on credit cards in Quebec, effective Monday, is aimed particularly at reducing household debt.

• Also Read: The minimum payment on your credit card will be higher by Monday

By making a higher minimum payment, consumers pay less interest because the balance is reduced more quickly.

The high interest rates on these credit cards, typically between 19.99% and 22.99%, take years to pay off the full balance.

But if the minimum repayment percentage increases from 3% to 3.5%, the number of years required for repayment will decrease significantly.

So here’s how many years it would take to pay off a credit card balance in full at a rate of 19.99% and make a monthly minimum payment of 3.5%:

– Balance $1000 : 8 years 11 months

– Balance 5000$ : 16 years 2 months

– Balance $10,000 : 19 years 4 months

– Balance $20,000 : 22 years 5 months

Source: Financial Consumer Agency of Canada

How many years would it take to pay off a credit card balance in full at 19.99%, but with a minimum monthly payment of 3%:

– Balance $1000 : 10 years 11 months

– Balance 5000$ : 20 years 2 months

– Balance $10,000 : 25 years 3 months

– Balance $20,000 : 29 years 6 months

Source: Financial Consumer Agency of Canada

READ  FitzGibbon is open to QST reduction on Quebec products