The minimum monthly payment for a credit card is now 3.5%, which should affect many citizens, since 70% of Canadians pay the entire balance each month.
• Read also: The minimum payment on your credit card will be higher tomorrow
The government's objective with this 0.5% increase is to limit Quebecers' indebtedness.
“There is a positive side to this minimum payment, said the licensed insolvency trustee, Michel Belhumeur. People will pay off their debts faster. They still need cash to do so. Otherwise, they will have to cut the budget.”
This growth in the minimum payment must cease, in 2025, after having reached 5%. This makes a significant difference for the average consumer.
“For a balance of 5000 dollars, for example, we are talking about 25 dollars per month more with this famous 0.5%. [...]. If we are content to pay the 2% which was, in 2019, the minimum payment required, then we are talking about 22,000 dollars in interest costs only, whereas at 5%, we are talking about 2,500 in interest costs,” explained the licensed insolvency trustee and president of Jean Fortin et Associés, Pierre Fortin.
“People are realizing that they can no longer pay their debts as they come due. They can no longer reimburse the minimum payments that are required on the credit card,” noted Roy Métivier Roberge’s licensed insolvency trustee, Éric Métivier.
Progressive indebtedness with credit is also one of the major causes of consultations with trustees.
For a clientele that was already in a precarious situation, the situation can be worrying.
"People are used to making minimum payments and with the price of gas, the cost of living and inflation, you start to fear for people," said a budget adviser at the Center for Budgetary and Social Intervention of Mauricie (CIBES), Angelica Torres.