A $5,000 credit card balance at 19.99% interest. You make the minimum payment every month. You never miss one. You never add to the balance.
How long until it is paid off?
Thirty years. More than thirty, actually.
By the time you are done, you will have paid approximately $12,700. That is $7,700 in interest on a $5,000 balance. You will have paid back more than double what you borrowed.
And the whole time, the number on your monthly statement looked perfectly manageable.
How minimum payments work in Canada
Most major Canadian credit cards charge around 19.99% interest. Your monthly statement shows a minimum payment, usually 2% to 3% of your outstanding balance, or a fixed amount like $10, whichever is greater. On a $5,000 balance, that might start at around $100. It feels affordable. It is designed to.
But here is what that number hides. At 19.99%, nearly all of your minimum payment goes to interest. The portion that actually reduces your balance is tiny. And as the balance slowly shrinks, so does the minimum payment. You are paying less and less each month, which means the debt barely moves. It is a treadmill designed to keep you on it.
What one small change can do
Same $5,000 balance. Same 19.99% rate. But instead of paying the minimum, you pay $150 per month.
You are debt-free in roughly four years. Your total interest drops to about $2,100. That is $5,600 saved and 26 years of your life back. Not by doubling your income. Not by some dramatic sacrifice. By paying $50 to $75 more per month than the minimum.
That is the gap between the minimum payment and a fixed payment you choose. One keeps you in debt for decades. The other gets you out in years.
Why no one explains this clearly
Your credit card statement in Canada is required to show you how long it will take to pay off your balance at the minimum payment. It is right there, in the disclosure box. But most people skip past it. And the number is abstract until you see the math laid out, month by month, watching your payments split between interest and principal.
That is what Credit Bright's Credit Calculator does. Enter your balance and your rate. See the minimum payment path. Then drag the payment slider. Watch the timeline shrink. See exactly how much time and interest you save with every extra dollar.
The takeaway
The minimum payment is not your friend. It is the most expensive way to repay credit card debt, and it is the default. The single most powerful thing you can do if you are carrying a credit card balance is decide on a fixed monthly payment above the minimum, and stick to it.
If you want to see what that looks like with your actual numbers, the Credit Calculator is built for exactly that.