Calculate how to pay off your credit card debt faster and save money on interest. Compare payment strategies and see how different approaches impact your debt freedom timeline.
Credit Card Debt Strategies for Canadians
Credit card debt carries some of the highest interest rates available to consumers, typically 19-29% annually in Canada. Smart payoff strategies can save thousands in interest charges.
Effective Debt Payoff Methods
- Pay More Than Minimum: Even an extra $25/month significantly reduces payoff time
- Debt Avalanche: Pay minimums on all cards, extra on highest interest rate first
- Debt Snowball: Pay minimums on all cards, extra on smallest balance first
- Balance Transfer: Move debt to 0% promotional rate card if available
- Debt Consolidation: Combine multiple debts into single lower-rate loan
Canadian Credit Card Rates
Standard Cards: 19.99% - 22.99% typical annual rate
Premium/Rewards Cards: 19.99% - 25.99% for cashback and travel cards
Store Credit Cards: 28.99% - 29.99% often the highest rates
Cash Advances: 22.99% - 24.99% plus immediate fees (no grace period)
Money-Saving Tips
- Stop using the card while paying off the balance
- Make payments bi-weekly instead of monthly for faster payoff
- Use tax refunds, bonuses, or windfalls to pay down principal
- Call your credit card company to negotiate a lower interest rate
- Consider a personal loan at lower interest to pay off high-rate cards
When to Seek Help
If you're struggling with minimum payments or have multiple high-balance cards, consider:
- Non-profit credit counselling services (free in most provinces)
- Debt management plans that consolidate payments
- Consumer proposals for significant debt reduction (legal process)