Infographic: Making only minimum monthly payments

From: Financial Consumer Agency of Canada

 

Making only minimum monthly payments infographic

Text version

The infographic “Making only minimum monthly payments” show as man reviewing his credit card statement and wondering why he owes so much interest after paying his bill every month. The infographic explains in steps why you pay so much interest on your credit card when you only make the minimum payments every month. 

Why do you owe so much on your credit card when you pay your bill every month? 

By only making the minimum payments each month on your credit card for that “must have” item, you could end up paying almost double the price you purchased it for!

If a $450 purchase made on a credit card with a 20% interest, was paid off with only the minimum monthly payment of 2%, or $10 over seven years, the total interest you would pay for that item would be $389. That’s a total cost of $839! 

If you only make the minimum payments, it may take years to clear your debt. 

While your credit card agreement must disclose how credit card interest is calculated, it is your responsibility to read and understand your credit card agreement.

Understanding your financial rights and responsibilities means no surprises. Find out more at Canada.ca/it-pays-to-know.
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