Why Does My Canadian Credit Card Minimum Payment Keep Rising?

Have you ever checked your credit card statement and been surprised to see that your minimum payment is higher than it was in the previous month? Even if you haven't made any new purchases, your minimum payment can still increase. It can leave you feeling confused. Not to mention stressed about managing your finances.

Many people wonder why their credit card minimum payment keeps going up. In this article, we'll explain the reasons behind rising minimum payments in simple terms. You'll learn how minimum payments work, what causes them to rise, and what you can do to keep them under control.

What Is a Credit Card Minimum Payment?

A minimum payment is the smallest amount you must pay by the due date to keep your account in good standing. Most banks calculate it as a percentage of your balance (often around 2–3%), sometimes combined with interest and fees, or a flat dollar amount—whichever is higher.. If you only cover the minimum, your balance will take longer to pay off, and it’ll end up costing you more interest over time.

Understanding how credit card minimum payments work is important because it helps you know when to use a credit card for purchases and how much you must repay, including any interest charged.

5 Reasons Your Credit Card Minimum Payment Keeps Rising

#1: Your Balance Is Growing

The most common reason your minimum payment rises is that you owe more money. When your balance increases, the percentage-based minimum payment also goes up. Interest charges also add more to what you owe each month, and even small new purchases can increase your minimum if you already carry a balance. 

Read FinlyWealth’s guide on how credit card minimum payments are calculated for more guidance.

#2: Interest Charges Are Adding Up

Interest plays a significant role in rising minimums. If you carry a balance from month to month, only pay the minimum, and have a high interest rate, interest gets added every billing cycle. This interest becomes part of your new balance, which pushes the next minimum payment higher still. In Canada, most credit card interest rates fall between 19% and 22%, which is considered normal but can still add up quickly. 

You can learn more about how credit card interest works, why it costs so much over time, and how interest is calculated on our blog: How Credit Card Interest Works in Canada

#3: You Missed a Payment or Paid Late

Missing a payment can cause problems quickly. If you pay late, then interest keeps building. You may also see late fees which make your balance grow faster. All of this can lead to a higher minimum payment on your next statement. Late payments can also hurt your credit score if they continue. To avoid this, many people set up automatic payments through their online banking.

#4: Your Promotional Rate Ended

Some credit cards offer 0% interest for a limited time or low interest rates on purchases or balance transfers. When that promotional period ends, interest starts applying immediately. This means your balance increases faster, and your minimum payment goes up. Many people are surprised when this happens because they forget the promotion period has an end date. It’s always best to pay off the balance before the promotional period ends. If you can’t pay it in full, contact your credit card issuer to ask whether a lower interest rate or other options are available.

#5: Your Card Issuer Changed Its Policy

Sometimes, the change to your minimum payment is not about your spending at all. While uncommon, banks can adjust how they calculate minimum payments, raise the percentage used, or add new fees. When this happens, your minimum payment may rise even if your balance stays the same. Card issuers are required to inform you of any material changes though. 

For more information, the Government of Canada explains your rights when getting a credit card.

Why Paying Only the Minimum Is Risky

Paying only the minimum balance on your credit card keeps your account open, but it will cost more in the long run. Here's why:

• Interest keeps adding up
• Debt lasts longer
• Minimum payments may keep rising

For example, a small balance can take years to pay off if you only pay the minimum. We always recommend paying more than the minimum whenever possible to reduce your interest costs over time.  

How Rising Minimum Payments Affect Your Budget

A rising minimum payment can:

• Make monthly bills harder to manage
• Reduce money for savings
• Increase financial stress

This is why understanding the cause matters. Once you know why it's rising, you can take steps to stop it.

What You Can Do to Lower Your Minimum Payment

1. Pay More Than the Minimum: Even small extra payments help lower your balance and future interest.
2. Stop Spending Temporarily: Focus on paying down what you already owe instead of making new purchases.
3. Look for a lower-interest card: Some cards offer lower rates or balance transfer options.
4. Set Up Automatic Payments: This helps avoid late charges and missed payments.

Will a Rising Minimum Payment Hurt My Credit Score?

Not directly, no. Your credit score is affected by:

• Payment history
• Credit utilization
• Total debt

As long as you pay at least the minimum on time, your score should not drop. But high balances can increase credit utilization, which may affect your score. The Government of Canada explains how credit scores work and what affects them.  

Final Thoughts

If your credit card minimum payment keeps rising, it's not random. It usually means your balance, interest charges, or fees are growing over time. Paying only the minimum may feel easier now, but it often leads to higher costs later on. The good news is that you have options. Paying a little extra, reducing new spending, and choosing cards with better terms can make a big difference over time. By understanding why minimum payments rise and acting early, you can regain control of your credit card and protect your financial future.

The Government of Canada also offers consumer protection guides that help promote transparency and fairness.