{"id":1674,"date":"2021-09-08T14:12:24","date_gmt":"2021-09-08T21:12:24","guid":{"rendered":"https:\/\/www.nerdwallet.com\/ca\/?page_id=1674"},"modified":"2023-12-20T03:24:16","modified_gmt":"2023-12-20T11:24:16","slug":"how-to-pay-off-credit-card","status":"publish","type":"page","link":"https:\/\/www.nerdwallet.com\/ca\/credit-cards\/how-to-pay-off-credit-card","title":{"rendered":"How To Pay Off Your Credit Card: 5 Tips"},"content":{"rendered":"\n

Forty-three percent of Canadians currently have credit card debt, according to NerdWallet\u2019s 2023 Consumer Credit Card Report<\/a>. <\/p>\n\n\n\n

Nearly half (48%) say it will take them less than six months to pay off all their credit card debt, but 40% say it will take six months or longer to clear their credit card balance, according to the report.<\/p>\n\n\n\n

Paying off your credit card balance should be a straightforward process, but it\u2019s not always so simple. High interest rates can accumulate quickly and send you into a debt spiral. <\/p>\n\n\n\n

Whether you\u2019re in deep credit card debt or just don\u2019t like carrying a balance, here are five tips to paying off your card.<\/p>\n\n\n\n

Ways to pay off credit card debt<\/h2>\n\n\n\n

1. Automate your payments<\/h3>\n\n\n\n

Most credit card providers allow you to automate your payments<\/a>. You can usually choose to pay the minimum amount, make a full payment or pay a fixed amount of your choosing. <\/p>\n\n\n\n

Since the money is automatically withdrawn from your bank account, there\u2019s no chance that you\u2019ll miss a payment, which can be costly. Issuers typically charge late fees when a bill isn\u2019t paid and can increase the interest rate moving forward. Plus, skipping a payment can damage your credit score. <\/p>\n\n\n\n

2. Make more than the minimum payment<\/h3>\n\n\n\n

The minimum payment on a credit card<\/a> is the smallest amount you can pay to avoid fees and keep your account in good standing. While just making the minimum payment may sound appealing, it\u2019ll keep you in debt longer. <\/p>\n\n\n\n

For example, if you have a $5,000 credit card balance and you only pay the minimum payment, it\u2019ll take nearly 21 years to pay off the balance. However, if you pay just $50 more than the minimum amount, it\u2019ll take just over five years to clear the debt*. <\/p>\n\n\n\n

Among Canadians with a credit card, just 58% say they always pay credit card balances in full each month, according to NerdWallet\u2019s report. While you may not be able to clear the entire balance, it\u2019s always advisable to pay off as much of it as you can every month.<\/p>\n\n\n\n

*Calculations based on 20% APR and 3% minimum payment (or $10, whichever is higher) using the Government of Canada\u2019s Credit Card Payment Calculator<\/em>[1]<\/a>.<\/em><\/p>\n\n\n\n\t