The increase in minimum credit card payments: where do we stand today?

In summary:

• Since 2025, the minimum payment on credit cards in Quebec has been set at 5% of the outstanding balance, a reform introduced to reduce the cost of consumer debt.
• A higher minimum payment helps consumers repay debt more quickly and pay less interest, but it can also place additional pressure on household budgets.
• To avoid accumulating interest charges, it is best to pay the balance in full whenever possible and seek assistance as soon as payments become difficult to manage.

Since 2025, all credit cards issued in Quebec have been subject to a minimum payment requirement of 5% of the outstanding balance. This measure marks the culmination of a reform launched in August 2019 to better protect consumers from the high costs associated with debt.

Looking back at the changes of recent years

In 2018, the Quebec government amended the Consumer Protection Act to reduce the negative consequences of low minimum payments on credit cards.

At the time, many consumers paid only the required minimum payment, which was often set at 2% or 3% of the balance. While these payments appeared affordable, they significantly extended repayment periods—sometimes over several decades—and dramatically increased interest costs.

The reform introduced two key measures:

• All credit cards issued on or after August 1, 2019, were required to have a minimum payment of 5% of the balance.
• For cards issued before that date, the minimum payment was gradually increased by 0.5% per year until reaching 5% in 2025.

This transition period has now ended, and the same rule applies to all affected credit cards.

For example: Let’s consider a balance of $5,000.

With a minimum payment of 5%, the required monthly payment is now $250, compared to $150 before the phased increases were introduced. Although this amount is higher than before, it also helps reduce the principal balance more quickly and limits interest charges.

For many households, however, this increase comes at a time when essential expenses, such as housing, food, insurance, and utilities, already consume a significant portion of the budget. As a result, some consumers struggle to meet the higher minimum payment and may even resort to other forms of credit to do so. Additionally, the change creates further financial strain for individuals with variable-rate lines of credit or mortgages.

Why increase the minimum payment?

The objective of this reform was straightforward: to help consumers pay off their debts more quickly and reduce the amount of interest they pay.

When the minimum payment was only 2%, it was not uncommon for credit card debt to take several decades to repay. In some cases, the total interest paid exceeded the amount originally borrowed.

By requiring higher minimum payments, the government sought to reduce situations where a debt of only a few thousand dollars could ultimately cost twice as much—or even more.

For example, in 2018, a $1,000 credit card debt repaid through minimum payments of 2% could generate more than $2,000 in interest charges alone—twice the original balance. It created the illusion that a $1,000 purchase could be easily repaid at $20 per month, while many consumers failed to appreciate the enormous interest costs associated with that approach. For the same $1,000 balance, a 5% minimum payment reduces the total interest cost to approximately $442.

When minimum payments were 2%, repayment estimates could sometimes stretch beyond 80 years. For all these reasons, the Office de la protection du consommateur (OPC) required financial institutions to increase minimum payments, thereby reducing excessive interest charges.

The true cost of a credit card

Credit cards remain one of the most expensive forms of financing available. Standard interest rates are still generally around 20%, and some cards carry even higher rates.

When used as a payment tool and paid off in full each month, a credit card can be convenient and secure. However, when it is used to finance everyday expenses, interest charges can accumulate very quickly.

We encourage consumers to use a credit card cost calculator to better understand the long-term impact of carrying a balance.

Why are credit cards so popular?

So why do so many people rely on them? For many consumers, including the author of these lines, credit cards are a convenient and secure method of payment. However, when the statement arrives, consumers often face a choice: tighten their budget and pay the balance in full or make only the minimum payment. Frequently, people choose the second option, telling themselves they will deal with the remaining balance next month. Unfortunately, this is often the beginning of mounting interest charges, and many do not realize how much the debt will ultimately cost.

For some individuals, a credit card is also their only access to credit. Yet these consumers are often already vulnerable due to lower incomes or poor credit histories. Providing access to high-interest credit can increase their risk of excessive indebtedness.

What should you do if the minimum payment becomes difficult to afford?

If you struggle to make the minimum payment on your credit card each month, it is important to act quickly rather than allowing the situation to worsen.

A few strategies can make a significant difference:

• Establish a realistic budget.
• Limit new purchases made on credit.
• Prioritize repayment of the most expensive debts.
• Determine whether a line of credit or loan with a lower interest rate could reduce borrowing costs.
• Seek professional advice before payments become impossible to manage.

Our advisors and Licensed Insolvency Trustees see it every day: the sooner action is taken, the more options are available.

A reform that remains relevant?

The gradual increase in minimum payments is now complete, but the reasons behind the reform remain as relevant as ever.

A 5% minimum payment helps reduce interest costs and shortens repayment periods. However, in an environment where many households continue to face a high cost of living, this requirement can also place significant pressure on monthly budgets.

Regardless of economic conditions, the best way to use a credit card remains the same: pay the balance in full whenever possible. If debt begins to accumulate, it is best to seek advice promptly to prevent interest charges from taking over.

By Pierre Fortin
Jean Fortin & Associés
Personal Finance Advisor
Licensed Insolvency Trustee