Credit Card Payoff Calculator: how it works in 2026, with a worked example

Questions people ask

How long does it take to pay off a credit card paying only the minimum?

Decades. On $8,000 at 20.99% with a 3% minimum, about 24 years and more than $10,000 of interest, because the minimum shrinks as the balance falls and the last few hundred dollars take years. Quebec requires a 5% minimum, which roughly halves that. Your statement must show this figure, and any fixed payment above the minimum changes the picture completely.

What is the minimum payment on a credit card in Canada?

Typically the greater of 3% of the balance and $10, though some cards use 2% or interest plus 1%. In Quebec the law requires a minimum of at least 5% of the balance.

Should I pay off my credit card or invest?

Pay the card. No investment reliably returns 20% a year after tax, and paying off a 20% card is a guaranteed 20% return. Keep an emergency fund, then attack the highest-rate balance first.

Is a balance transfer worth it?

If you can pay most of the balance off before the promotional rate expires, usually yes: a 0% for 12 months offer with a 3% fee on $8,000 costs $240 and can save $1,500 or more of interest. The catch is the standard rate that returns afterward, and that new purchases on the new card usually accrue interest immediately.

How is credit card interest calculated?

Daily, on the average daily balance, at the annual rate divided by 365, and charged monthly. Once you carry a balance, new purchases accrue interest from the day they post; the 21-day grace period only applies when the previous statement was paid in full.

What happens if my payment barely covers the interest?

The balance never goes down. The calculator says 'never' in that case and shows the monthly interest so you can see the minimum needed to make progress.

Avalanche or snowball: which should I use?

Avalanche (highest interest rate first) costs the least in interest and is mathematically best. Snowball (smallest balance first) clears a debt sooner, which helps some people stay motivated. The calculator shows the months and interest for both so you can see what the motivation costs.

What if I cannot even cover the minimums?

Contact a non-profit credit counselling agency such as Credit Canada or Consolidated Credit; they can negotiate a debt management plan with reduced or frozen interest. A consumer proposal through a licensed insolvency trustee is the next step. Both are far cheaper than payday loans or ignoring the bills.