How to Pay Off Credit Card Debt

Canadian credit cards often charge 19.99%–24.99% APR (annual percentage rate). Interest is usually compounded daily, so even a modest balance grows quickly.

Example: $5,000 balance at 20% APR, minimum payments only (~2% of balance): - Time to pay off: 9+ years - Total interest: $6,000+

If you paid $250/month instead: - Time to pay off: about 2 years - Total interest: roughly $1,100

The takeaway: Paying more than the minimum—and ideally the full balance every month—saves you a huge amount in interest and gets you out of debt sooner.

Before choosing a strategy, list every card: balance, APR, and minimum payment. Use your latest statements or log into each account.

Optional: Add any other high-interest debt (e.g. store cards, personal loans) so you have one picture.

Why it matters: You'll see which debt is costing you the most (highest APR or highest balance) and can decide between avalanche (highest interest first) or snowball (smallest balance first).

How it works: Make minimum payments on all cards, and put every extra dollar toward the card with the highest interest rate until it's paid off. Then move to the next highest rate.

Pros: You pay the least total interest. Cons: If your highest-rate card also has the largest balance, it can take a while to see one account paid in full, which may feel slow.

Best for: People motivated by saving money and who are okay with waiting for the first "win."

How it works: Make minimum payments on all cards, and put every extra dollar toward the card with the smallest balance until it's paid off. Then move to the next smallest balance.

Pros: You get the psychological boost of closing accounts sooner, which helps some people stay motivated. Cons: You may pay more total interest if the smallest balance isn't the highest rate.

Best for: People who need visible progress and motivation to keep going.

A balance transfer moves your existing credit card debt to a new card that offers 0% APR for a promotional period (e.g. 6–12 months). During that time, you don't pay interest on the transferred balance, so more of your payment goes to principal.

Typical terms in Canada: - 0% for 6–12 months on transferred balance - Balance transfer fee often 1–3% of the amount transferred - New purchases on the same card usually don't get 0%; they accrue interest if not paid in full

When it helps: When you can commit to paying off the balance (or most of it) before the promo ends. Otherwise you're left with a balance at the card's standard APR.

See our Balance Transfer Guide for the best 0% balance transfer cards in Canada and how to avoid common pitfalls.

Set a monthly payoff amount: Based on your budget, decide how much you can put toward debt each month beyond minimums. Automate that amount (e.g. extra payment to one card on payday).

Cut new spending: Put the card(s) away or delete them from online shopping so you don't add new debt while paying off the old.

Consider a side income or windfall: Tax refunds, bonuses, or extra work can be put entirely toward the chosen card to speed things up.

Track progress: Use a spreadsheet or app to watch balances drop. Celebrating milestones (e.g. first card at $0) can keep you motivated.