A major change in the rules for paying the minimum credit card balance comes into effect today, Monday.

Credit card holders issued before August 1, 2019, who had a minimum monthly payment percentage set at less than 3.5%, must now make a monthly payment equal to 3.5% of the outstanding balance.

This change is effective until July 31, 2023, and will be followed by other adjustments.

The Consumer Protection Office in Quebec (OPCQ) reported that starting from August 1, 2023, the credit card issuer must require a minimum payment equal to at least 4% of the amount due.

This percentage will be raised to 4.5% after one year, that is on August 1, 2024, and to 5% after another year, that is on August 1, 2025.

The office indicated that the Consumer Protection Act stipulates the percentage of the minimum payment that may be required.

In addition, individuals with a credit card contract since August 1, 2019, must pay a monthly minimum equal to at least 5% of the balance due.

On the other hand, the credit card issuer has the right to demand a minimum payment greater than 3.5% of the balance if the contract already specifies that. However, they cannot do so if they modify the contract without the cardholder's consent in a way that increases the payment percentage above 3.5%.

The Consumer Protection Office advises that it is always better to pay off the credit card balance each month to save on credit fees. Paying only the minimum amount each month keeps debt repayments low.

A report released last June by the Canadian branch of Equifax Canada, a credit analysis company, indicated that Canadian consumers are using their credit cards more and more.

The monthly credit card spending rate rose by 17.5% in the first quarter of 2022 compared to the same period last year.

The strongest increase in spending with credit cards was recorded in Ontario, with 20.4%, followed by Quebec, with 18.4%. Ontario and Quebec are respectively the two largest provinces in Canada in terms of population and economic size.

Overall, younger consumers are the ones who have increased their spending on credit cards more than others.