What Your Credit Card Balance Actually Costs

The minimum payment shrinks as you pay it

This is the mechanism, and almost no calculator models it. Your minimum is a percentage of the balance, so every payment reduces the balance, which reduces the next payment, which reduces how fast the balance falls.

On $5,000 at 19.99% the first minimum is about $150.00. By the time the balance is halved the required payment is halved too. Anything that models a flat minimum will tell you the debt clears years earlier than it does.

Quebec is the only province with a legal floor

Since 1 August 2025, Quebec has required a minimum payment of at least 5% of the balance. Bill 134 phased it in from 2%, half a point a year; cards opened after August 2019 started at 5% immediately.

Everywhere else the minimum is whatever the cardholder agreement says, typically 2% to 3% or $10. On identical debt at an identical rate, that single difference is 10 years 11 months and $3,541.

There is no cliff at 30% utilisation

Utilisation — your balance against your limit — is the second largest input to a Canadian credit score after payment history. The advice to "keep it under 30%" is repeated everywhere and there is no threshold behind it.

Scoring models treat utilisation continuously. Going from 31% to 29% does not trip a switch; going from 60% to 40% helps, and so does going from 25% to 15%. Lower is better all the way down, and the only level that is unambiguously bad is over your limit.

The date you pay matters as much as the amount

Your utilisation is reported to the bureaus on your statement date, not your due date. Whatever the balance happens to be on that day is the number that gets recorded.

Someone who charges $900 on a $1,000 limit and clears it in full every month is never late and pays no interest — and can still show 90% utilisation, because the statement snapshot lands before the payment. Paying before the statement closes, rather than before the due date, changes the reported figure without changing a dollar of what you spend.

Avalanche or snowball: the gap is smaller than you think

The avalanche pays the highest interest rate first and always costs the least. The snowball pays the smallest balance first, so cards disappear sooner and each one that clears frees its minimum for the next. The internet treats this as settled in the avalanche's favour.

On the three cards this calculator opens with — $8,100 across a Visa, a store card and a line of credit — the avalanche costs $1,140 and the snowball $1,277. The whole argument is worth $136.56. Paying the minimums instead would cost $9,222.

So the choice between strategies is worth $136.56 and the choice to have one at all is worth $8,082. Pick whichever you will actually keep up.

Keep a cleared card open

This part is not a matter of preference. Closing a paid-off card removes its limit from your total available credit, so the debt you still carry becomes a larger share of a smaller total — your utilisation rises without you borrowing a penny more.

The exception is an annual fee you cannot justify. Otherwise the limit is worth more to you sitting unused than the card is gone.