A credit card is free to use if you pay the full balance by the due date every month. Carry a balance and the interest adds up fast, which matters before you apply for a mortgage: lenders count your card payments in your debt service ratios.
The grace period
Federally regulated card issuers must give you at least 21 days from the end of the billing period to pay new purchases without interest. The grace period does not cover cash advances, cash-like transactions or balance transfers: interest on a cash advance starts the day you take it, often at a higher rate. Source: FCAC.
Minimum payments
The minimum is either a flat amount, usually $10, plus interest and fees, or the higher of a dollar amount (typically $10) and a percentage of the balance (typically 3%). Your card agreement says which method applies. Since August 1, 2025, the minimum payment for Quebec residents is 5%. Your statement must show how long it would take to clear the balance by paying only the minimum. Source: FCAC.
What the minimum costs
In FCAC’s example, a $2,000 balance at 18% paid at the minimum takes about 3 years and 11 months and costs $793 in interest. Paying $160 a month clears it in about 14 months for $231 of interest. The credit card payoff calculator gives the same answer for the $160 payment.
Other charges to watch
- Balance transfer fees, often a percentage of the amount moved.
- Foreign currency conversion charges on purchases in other currencies.
- Merchant surcharges on credit card payments.
Paying it down
Compare paying more each month with moving the balance to a lower-rate loan in the debt consolidation calculator, and see the effect on a mortgage in the GDS and TDS calculator.
Try the credit card payoff calculator →
Official source
This guide explains general rules. Confirm your figures with your lender, lawyer, or the official source before you act.