The minimum amount payable on credit cards in Quebec will increase to 3.5% of the balance as of August 1.
At the beginning of August, Quebecers will thus see the amount required as a minimum periodic payment on their credit card set at 3.5% of its balance, or half a percentage point more than currently. This amount will gradually increase each year until it reaches 5% of the balance in 2025.
This change is one of the measures adopted in 2017 by the National Assembly, “to prevent debt problems”. Since August 1, 2019, any new credit card contract must also provide for a minimum payment that cannot be less than 5% of the balance.
Pay attention to the minimum payment
However, the firm specializing in taxation Raymond Chabot warns credit card holders about the minimum payment, which is not, according to them, a medium-term solution.
The firm specifies that when you limit yourself to repaying the minimum amount on your credit card, you postpone the reimbursement of your purchases. And we end up paying more for them because of the interest. Making it a habit risks increasing debt and then having a high debt-to-equity ratio, which could scare off lenders.
Also, repaying more than the minimum payment on a credit card allows you to make significant savings on your credit costs, estimates the network of advisors. The firm adds that the increase in the minimum amount to be reimbursed will allow credit card users to be aware of their real ability to pay.