Debt · 6 min read · Reviewed for 2026
Getting out of credit card debt in Canada
Canadian credit cards charge 19.99%–22.99% on purchases and often more on cash advances. At those rates the minimum payment is designed to keep you paying for decades.
Why the minimum payment traps you
A typical minimum is the greater of $10 or 2%–3% of the balance. On a $10,000 balance at 20.99%, paying only the minimum takes over 30 years and costs more in interest than the original debt.
Adding even $100 a month to that payment usually cuts the payoff time by more than half. The debt payoff calculator shows the exact crossover for your balance and rate.
Avalanche versus snowball
The avalanche method pays the highest interest rate first and always costs the least. The snowball method clears the smallest balance first and wins on motivation. If the difference in total interest is small, take the method you will actually finish.
Whichever you choose, stop new spending on the card being attacked, and make payments weekly rather than monthly — interest accrues daily, so timing alone shaves a little off the total.
When to refinance the balance
An unsecured personal line of credit typically runs prime plus 3–7 points, a secured home equity line of credit closer to prime plus 0.5. Moving a 21% balance to a 9% line of credit is a genuine saving — but only if the card is then left at zero.
Balance transfer promotions of 0%–3% for six to twelve months work if you can clear the balance inside the promotional window; the transfer fee is typically 1%–3%, and the promotional rate ends abruptly.
If total unsecured debt exceeds roughly a year of take-home pay, speak to a Licensed Insolvency Trustee before borrowing more. The first consultation is free, and a consumer proposal is a regulated option, unlike most advertised 'debt relief' services.
Common questions
Does paying off a credit card help my credit score?
Yes. Utilization — balance divided by limit — is a major factor; keeping each card under 30% of its limit usually improves the score within a couple of statement cycles.
Should I use savings to pay off a credit card?
Almost always, beyond a small emergency buffer. No safe Canadian investment returns 20% after tax, which is what clearing the card effectively earns.
Run the numbers
This guide is general information for Canadian residents, not tax, legal or financial advice. See our methodology for the rates and rules behind every calculation.