Why the minimum payment is a trap
A minimum payment is normally set as a percentage of your balance, with a small dollar floor for tiny balances. Because it is a percentage, the payment falls as the balance falls. You are always paying a shrinking amount against a balance that is still charging interest at the full rate, so the last stretch of the debt crawls. A fixed payment of the same starting size behaves completely differently: as the balance drops, more of that unchanged payment goes to principal, and the payoff accelerates.
How this calculator works
It simulates your card month by month. Each month it adds the interest for that month, then applies your minimum rule — the greater of the percentage and the dollar floor — and repeats until the balance reaches zero. The simulation is capped at 100 years; if the balance is still there, the card is reported as never realistically paying off. That happens when the minimum percentage is at or below the monthly interest rate, because the payment never covers the interest being added.
Assumptions and limits
- No new purchases, cash advances, annual fees, over-limit fees or missed-payment penalties are added.
- Interest is applied monthly at APR ÷ 12. Real issuers compute interest daily and may apply it differently, so treat the result as an estimate.
- Minimum payment rules differ by issuer and by card. Some add the month's interest and fees on top of the percentage. Check your own cardholder agreement and adjust the two minimum-rule inputs above.
- This is a math tool, not financial advice. Your statement governs.
FAQ
Is the minimum really a percentage of the balance?
On most Canadian credit cards, yes — a percentage of the statement balance subject to a dollar minimum. The exact percentage and floor are set by the issuer and are printed in your cardholder agreement, so use those numbers rather than the placeholder values here.
Why can the answer be "never"?
If the minimum percentage is smaller than your monthly interest rate, the payment does not even cover the interest added that month, so the balance grows instead of shrinking. No payoff date exists in that case, and the calculator says so rather than printing a misleading number.
Does paying the minimum hurt my credit score?
Paying at least the minimum on time keeps the account in good standing. The cost is the interest, not a missed payment. Carrying a high balance relative to your limit is a separate factor.
What is the fastest way to cut the total?
Fix the payment instead of letting it shrink, and raise it as far as your budget allows. Every extra dollar goes straight against principal, which removes all the future interest that dollar would have carried.