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Here’s What To Do If You Can’t Afford Minimum Payments on a Credit Card

If you can’t afford minimum payments on a credit card, it may be time to take a step back. It’s hard to get through life without credit. You often need it to purchase a home, car, business and even for day-to-day expenses. 79.3% of Canadians, have some sort of outstanding debt. While mortgages remain the most common type of debt for Canadians, credit cards are a close second, with 29% of Canadians having credit card debt.

Most credit cards have high-interest rates of 19-20%, which is higher than the interest rates on other types of debt. Since credit cards are revolving around credit, it’s easy to consistently be in debt, especially if you don’t pay your credit card balance each month. 

Are you having trouble making minimum payments? A trained credit counsellor can help.

Luckily, if you can’t pay off your full balance at the end of each month, you can get by just paying a minimum amount by a specified due date each month, also known as your minimum payments.  Although you still need to pay interest, making your minimum payments can lower the risk of negative marks on your credit report. But, what happens if you can’t even make your minimum payments?

What Happens if You Don’t Make Your Minimum Payments?

While minimum payments are only 2-3% of your balance, this percentage adds up if your balance is high. Most Canadians owe thousands in credit card debt, as the average Canadian owes $23,800 total in credit cards, personal loans, other loans, and lines of credit. 

If your balance is $5,000, your monthly minimum payment amount is between $100- $150. If you can’t pay that minimum payment each month, here’s what could happen:

Negative Marks on Your Credit Score

Late and missed payments usually impact your credit score. However, you have some time to make that minimum payment. Usually, late or missed payments take 30 days to end up on your credit report. If you make your payment within 30 days, card issuers might not report the late payment to the credit bureau.

However, credit bureaus recommend that you make your minimum payments on the specified due date every month, to minimize any impact on your credit score. Bad credit will make it harder for you to access loan products in the future. 

Delay in Paying Off Debt

Minimum payments are often around 2-3% of your credit card balance. In an ideal world, you’d pay more than just your minimum payments each month so that you can pay off debt faster

Here’s an example of how long it would take to pay off debt just with minimum payments:

Credit card balance: $2,000

Interest rate: 19%

Minimum payment: 3%

In the above scenario, it would take you over 10 years to pay off your credit card balance in full, if you only make your minimum payments. You would also incur interest fees of at least $1,000 over that course of time.

So, while you can eventually pay off your debt just with minimum payments, you’re better off paying a bit extra each month to avoid more interest fees. However, life throws many expenses our way, so sometimes we don’t have the option to pay more than the minimum amount. 

Higher Interest Rates

Your credit card interest grows with your balance. It’s important to note that even just making your minimum payment still costs you more interest than if you were to pay off more of your debt each month. However, failing to make your minimum payments costs you even more.

Canadian credit card companies have the right to increase interest rates if borrowers don’t make their required minimum payments. Additionally, if you signed up for a credit card with a promotional interest rate, the credit card company might redact that promotional rate. 

Strategies to Use If You Can’t Make Minimum Payments

Here are a few strategies to use when you can’t make minimum payments on your credit card:

Call Your Creditor and Negotiate

Try calling your credit card issuer and explain why you can’t make your minimum payment. Ask them if they have any options to extend the due date or negotiate a payment plan. Be honest about your circumstances. Credit card companies don’t want to see you go bankrupt, so they might be willing to accommodate you. Some financial institutions, like RBC and BMO, might offer special accommodations for people affected by the COVID-19 pandemic. It never hurts to ask!

Pay What You Can

Paying what you can is better than paying nothing, even if you can’t come up with the full amount of the minimum payment. This shows the credit card company that you’re taking initiative and at the very least, trying to pay off some debt. 


If you’re struggling to make your minimum payments, now’s a great time to consider creating a long-term budget. Budgeting helps you reduce costs, lowers stress, and frees up more money to help pay off your credit card debt. Check out Consolidated Credit Canada’s budgeting tips to get started.

Set alerts and reminders

Sometimes people struggle to find funds to make their minimum payments. Other times, people simply forget and remember only after the due date passes. If you need help remembering your minimum payment dates, set a reminder or alert on your phone or computer so that you pay on time. 

Avoid taking on more credit

Don’t go into debt further to make your minimum payments. No matter how tempting it is, do not spend more money with your current credit card, or take on more debt through another credit card. Focus on making your minimum payments first, then slowly increasing those payments to pay off your debt faster before considering additional credit. 


Credit card debt affects millions of people worldwide. It’s normal to need extra support in paying off your debts. If you’ve exhausted all your options and need extra support in paying off your credit card debt, consider speaking with a credit counsellor today. 

There are several debt relief options available. Speak to a counsellor to find the solution for you.

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