Credit Card Repayment Calculator

Get out of credit card debt prison with the help of our Credit Card Repayment Calculator. Find out how long it’s going to take to bring your credit card balance to zero by either making the minimum payment each month or making a fixed payment.

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What is a Credit Card Repayment Calculator?

How much does your credit card debt actually cost? And how long will it take to pay it off? The Hardbacon Credit Card Repayment Calculator shows you just how much interest you’ll pay on your credit card balance. And it will help you create a debt repayment plan that actually works.

With the Hardbacon Credit Card Repayment calculator, you’ll see how changes to your monthly payment amount can save you time and money on interest charges. You’ll be able to create a debt repayment plan you can afford. The Credit Card Repayment Calculator can even help you see the true cost of a transaction before you make it, so you can make smarter spending decisions.

How to use the Hardbacon Credit Card Repayment Calculator

It’s super easy to use our Credit Card Repayment Calculator. Just type the numbers into the right spot, and we do the rest. Don’t worry, we’ve labelled everything for you. Let’s start with the basics:

Your credit card balance: enter your current credit balance as it appears on your statement. If you have used your credit card since you last made a payment, log in to your online credit card account to get an up-to-date balance or call the number on the back of your card.
Your annual interest rate: enter your credit card’s annual interest rate. You can find it on your credit card statement, credit card agreement disclosure, your online credit card account, or by calling the number on the back of your credit card.

Option A information: minimum payments each month

This section calculates your minimum monthly payment. Credit card companies calculate your minimum monthly payment one of two ways: either a set dollar amount or a percentage of your credit card balance, whichever is more. In Canada, most credit card companies charge either a minimum payment of $10, or 3% of your balance, whichever is more. However, that can differ among credit card issuers, as well as by province. To calculate your minimum monthly payment, please enter:

Your minimum monthly payment amount in dollars: enter the dollar amount of your minimum monthly payment as it appears on your statement. You can also get this information by logging in to your online credit card account or by calling the number on the back of your credit card.

Minimum percentage per month: you can also calculate your minimum monthly payment as a percentage of your balance. The percentage used to calculate your minimum monthly payment can be found in your credit card agreement disclosure, on your statement, or by calling the number on the back of your credit card.

Option B information: fixed payments each month

This section allows you to select a certain amount of money you’d like to put towards repaying your credit card each month, regardless of how much you owe. Make sure the fixed payment amount is equal to, or greater than, your minimum monthly payment amount.

Understanding the results of the credit card repayment calculator

After you have finished adding your information to the Hardbacon Credit Card Repayment Calculator, you will find the results in a chart beneath the calculator. Here, you will see a breakdown of all the most important information regarding your credit card debt and how your repayment behaviour affects your goals. You will see two columns in the chart:

Option A: Minimum payments each month

The results in this column are based on your minimum monthly payment calculation. It does not include any extra payments beyond your minimum payment obligation. Your minimum monthly payment is based on your outstanding balance. As your balance decreases, so does your minimum payment amount. If you only make the minimum payment each month, and not a penny more, it will take significantly longer to pay off your credit card debt and you’ll pay considerably more interest.

Option B: Fixed payments each month

The results in this column show the impact of making more than your minimum monthly payment each month. Or, at the very least, paying a fixed amount each month even as your balance decreases. By keeping your monthly payment the same each month, you’ll get out of credit card debt faster and pay less interest.

Comparing monthly payment amounts

Column A and column B allow you to see the impact of two different repayment strategies: only the minimum monthly payment or a fixed monthly payment you can afford. When you change the amount of the fixed monthly payment, the Hardbacon Repayment Calculator will immediately update the results so you can see how your monthly repayment plan impacts:

Repayment Period: based on the information you provided, the repayment period is how long it will take you to pay off your entire credit card balance. The lower the monthly payment amount, the longer it will take you to pay off your credit card balance.

Current Balance: according to the information you entered into the calculator, this is the balance you currently owe on your credit card. It does not take into account any additional charges you make while trying to pay off your credit card balance.

Interest Paid: based on your credit card interest rate and monthly payment amount, this is the total amount of interest you will pay until the card is paid off. The higher the monthly payment amount, the less interest you will pay.

Total Amount Paid: the total amount paid includes both the total of your monthly payments and the total interest you will pay, added together. The total amount paid until you are debt-free depends on your credit card balance, the interest rate, and the size of your monthly payment.

Why use the Hardbacon Credit Card Repayment Calculator

Your monthly payment amount isn’t the only thing that impacts how long it will take to pay off your credit card and the amount of interest you’ll pay. Your credit card balance and the interest rate also impact how long you will be in debt and how much it will cost you. Here are some other ways our Credit Card Repayment Calculator can help you make smarter financial decisions:

Compare credit cards with different interest rates
Determine if a balance transfer offer is right for you
Decide if you want to make a purchase with your credit card or debit card
See how much interest you will pay before making a credit card purchase
Help prioritize wants over needs
See how changing your monthly payment amount impacts your debt repayment plan
Set realistic financial goals for your budget
Choose the right debt repayment strategy for you

Learn more about the Credit Card Repayment Calculator inputs

Despite their widespread use, many Canadians don’t fully understand how a credit card works. There are many ways in which a credit card can affect your financial security, and even your credit score. Below you’ll find a description of each input for the Credit Card Repayment Calculator, and where you can find that information.

Credit card balance

Your credit card balance is different from your credit card limit. A credit card balance is the sum of all your credit card transactions that you have not yet paid off, including applicable interest charges and fees. Your credit limit is the total amount of money you have access to, but your balance is what you have already used and must pay back to your credit card company. To find your credit card balance, refer to your monthly credit card statement, your online credit card account, or call the number on the back of your credit card.

Annual interest rate

Every credit card comes with an annual interest rate, known as the APR. The rate varies from card to card and also depends on your credit score and unique financial situation. The industry standard interest rate for most credit cards is about 19.99%. However, those with lower credit scores or shorter credit histories will likely be given higher interest rates and limited or no access to credit card perks. While those with higher credit scores and longer credit histories will likely enjoy lower interest rates and better credit card perks.

Minimum amount per month

The minimum amount per month refers to the minimum payment you must make in order to keep your credit card account in good standing. You can find your minimum monthly payment on your credit card statement, your online credit card account, or by calling the number on the back of your credit card. Your minimum monthly payment is calculated as a percentage of your balance owing. As your balance reduces, so does your minimum monthly payment amount. This lengthens the amount of time you are in debt and increases the amount of interest you pay over time.

Minimum percentage per month

The minimum percentage per month is a calculation used by credit card companies to determine your minimum monthly payment amount. To find out what minimum percentage your credit card company uses, refer to your credit card agreement disclosure, your monthly statement, or by calling the number on the back of your credit card.

Fixed payments each month

The fixed monthly payment is the amount of money you can afford to pay onto your credit card each month. You decide how much the fixed monthly payment will be based on your budget and goals. It should be equal to or greater than your minimum monthly payment. Unlike the minimum payment calculated by your credit card company, your fixed monthly payment does not decrease as your credit card balance reduces; it stays the same month over month. When you pay the same amount each month, you will pay your credit card off faster and save more money on interest charges. The most cost-effective way to pay off credit card debt is with the Avalanche Method. Use our Debts Repayment Calculator (Avalanche Method) to see how much money you’ll save with this strategy.

How credit cards work in Canada

Credit cards can be a useful financial tool if used properly. Unfortunately, many Canadians don’t fully understand how credit cards work, increasing the risk of the dreaded debt trap and paying too much interest. Below is a crash course on how credit cards work in Canada.

Applying for a credit card

When you apply for a credit card, the credit card issuer will check your credit score. They may refer to this process as pulling or checking your credit, and it counts as a hard credit check on your credit file. Hard credit checks affect your credit score, causing it to drop by a few points. If you have an average or better credit score and have not applied for other types of credit recently, the effect on your credit score will be minimal.

However, if you have a below-average credit score or have applied for credit several times in the recent past, the impact on your credit score could be much more significant and harder to recover from. Those who are new to credit, like immigrants and students, will experience a greater impact on their credit score because they have a shorter credit history. Regardless of how good or bad your credit score is, several credit checks in a short period of time will damage your credit score. The lower your credit score is to begin with, the more a credit check will hurt.

Your credit card limit

When you are approved for a credit card, it will come with a set credit limit indicated in your card agreement disclosure. Your credit card limit is the maximum amount you can spend with your credit card. The credit card limit is pre-determined when you first get a new credit card, however, the limit can change over time if you request a credit limit increase or decrease. In Canada, credit card companies cannot legally increase your credit card limit without your expressed verbal or written consent.

Your credit card limit depends on factors like your credit score, credit history, and gross personal or household income. In addition to your credit score, creditors look at other things like how much debt you have, your repayment history, and the age of your credit file to help determine what your credit limit should be. While your credit limit determines how much you can spend with your card, it does not mean you should max out your credit limit. A credit card balance that is more than 30% of your credit limit starts to damage your credit score. That means if your credit card limit is $1,200 you should not carry a balance of more than $400.

Minimum monthly payment

Every time you use your credit card to make a purchase, you are borrowing money that doesn’t belong to you and must pay it back. The minimum monthly payment is the amount you must pay back to your credit card company to keep your account in good standing. Each month, you will receive a credit card statement that discloses the minimum payment amount, due date, total outstanding balance, and transaction history along, as well as other information about your account. Most credit card companies in Canada charge either a flat dollar amount, usually $10 plus interest and applicable fees, or a percentage of the balance owing, whichever is more. The minimum percentage used to calculate your down payment can range from 2.5% to 5% of your outstanding balance.

For example, if you carry a $1,000 balance on your credit card, and your credit card issuer calculates your minimum payment is 3% of the balance, your minimum payment would be $30. The percentage used to calculate the minimum monthly payment varies depending on the credit issuer, and where you live, but most credit card companies go by the 3% rule. However, if you are a resident of Quebec, credit card issuers are legally mandated to charge at least 3.5% of the outstanding balance as a minimum payment in 2022, reaching 5% by 2025.

Your credit card interest rate

The credit card interest rate is how much your credit card company charges you to use credit. If you don’t pay your credit card balance off in full each month you will be charged interest. The amount of interest you pay depends on the rate, how much you owe, and how long it takes you to pay off your balance. Most credit cards offer a 21-day interest-free grace period from the time of purchase. That means if you pay off your purchase in full within 21 days, you won’t be charged any interest at all. Any balance owing after the interest-free period has expired starts to accrue interest charges.

How credit card interest works

Your credit card interest rate is expressed as an annual rate, referred to as the annual percentage rate (APR). However, the annual percentage rate is broken down and charged to your account daily. For example, if your credit card APR is 19.99%, your credit card company will divide that by 365 days and charge you 0.055% interest per day on your outstanding balance until it is paid off. Credit card interest compounds, which makes credit cards debt among the most expensive forms of debt, and difficult to get out of. To see the effect for yourself, use our Hardbacon Compound Interest Calculator.

For example, today you have a $2,000 balance owing, and your APR is 19.99%. That makes your daily interest rate 0.055% percent, which means $1.10 is added to your balance. Tomorrow, you owe $2,001.10 and that new higher balance accrues even more interest. That $1.10 of interest that you were charged yesterday, is charged interest today; you are paying interest on interest. When you make your minimum monthly payment, almost all of it goes to paying off the accumulated interest, and very little goes to paying down your principal balance.

Cash advances and other fees

When you open a new credit card account, the APR isn’t the only expense you need to be aware of. When you withdraw money from your credit card through a cash advance, you will be charged a higher interest rate. The interest-free grace period does not apply to cash advances either; credit card cash advances accrue interest charges immediately from the date of transaction. Other fees and expenses to be aware of include, but are not limited to:

Over limit fees when you exceed your credit card limit
Cash advance transaction fee
Balance transfer fees
Increased interest rate resulting from multiple late or missed payments
Non Sufficient Funds (NSF) fee for a dishonoured/bounced payment
Account inactivity fee
Annual card fee
Secondary card fee for an authorized user

For a complete list of all applicable fees and rates, refer to your credit card agreement disclosure, sometimes called the cardholder agreement.

Frequently Asked Question

What does APR mean?

APR stands for Annual Percentage Rate and refers to the interest rate on your credit card. Every time you use your credit card to make a purchase, you are borrowing money. The interest rate is the price you pay to borrow that money. The APR is expressed as an annual percentage, but it is actually broken down and charged daily to your credit card account. You then receive a monthly credit card statement that shows your transaction history, how much interest has accrued, if any, and your minimum payment amount. Your minimum payment will first clear off any accumulated interest charges, and the rest will be applied to your principal balance. The amount of interest you pay depends on your credit card interest rate, your outstanding balance, and how long it takes to pay it off. You will pay more interest for credit card cash advances because they are charged a higher interest rate, interest accrues immediately from the date of transaction, and the 21-day interest-free period does not apply.

What is the minimum monthly payment on a credit card?

Most credit card issuers in Canada use the 3% rule when calculating your minimum monthly payment. That means they charge 3% of your outstanding balance as your minimum payment amount. If you carry a balance of $1,000, then your minimum payment would be $30. However, the percentage used can vary among credit card issuers and provinces. If you are a resident of Quebec, expect to pay at least 3.5% of your outstanding balance as your minimum monthly payment in 2022. To find out how your credit card issuer calculates your minimum monthly payment amount, refer to your credit card agreement disclosure, monthly statement, or by calling your credit card issuer.

How to repay a credit card debt quickly?

To repay your credit card quickly, pay more than the minimum monthly payment amount. In fact, try to pay as much as you can afford each month. The standard credit card interest rate is about 19.99% on most cards, and it compounds daily which means you are charged interest on interest. The faster you reduce your credit card balance, the faster you will pay it off and the less interest you will pay. There are two ways to pay down credit card debt: the Snowball Method and the Avalanche Method. The Avalanche Method is the most efficient form of debt repayment by saving you the most money on interest charges. Use the Hardbacon Debts Repayment Calculator (Avalanche Method) to see how quickly you’ll be out of debt and how much money you’ll save on interest.

How to repay a cash advance on a credit card?

Credit card cash advances are charged a higher interest rate and start to accrue interest charges immediately from the date of transaction. Try to avoid credit card cash advances at all costs, but if you can’t, make sure you have an aggressive repayment plan in place. As a rule of thumb, you should pay the entire amount of the cash advance as soon as possible, as well as your regular minimum monthly payment. That means if your cash advance was $200, and your minimum monthly payment is $30, you should pay $200 as soon as possible, plus $30 by the due date. If you can’t pay the entire amount of the cash advance, pay as much as you can in addition to your regular payment. Make sure your payments are received on time by your due date to avoid damaging your credit score and incurring late payment fees or interest rate hikes.

How do credit card repayments work?

Generally, credit card issuers will first apply your credit card payment to any interest charges owing. Any remaining portion of your payment will then be applied to your principal balance. Different types of credit card transactions are charged different interest rates, such as standard point of sales transactions vs high-interest cash advances. Most credit card issuers will apply your payment to the portion of your balance subject to the lower, standard interest rate first, like regular purchases. Followed by the portion of your balance subject to a higher interest rate, like cash advances. What’s left of your payment will then be applied to your principal balance. However, different credit card issuers decide for themselves how they will apply your payment. To find out, refer to your credit card agreement disclosure, or by calling your credit card issuer.