Personal Finance

Quebec raising minimum payments for credit cards

  • Last Updated:
  • Aug 5th, 2019 12:59 pm
[OP]
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Dec 12, 2009
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Quebec raising minimum payments for credit cards

Caught this on tonight's news:
https://montreal.ctvnews.ca/new-rules-r ... -1.4533517
Quebec credit card users will have to pay off at least two per cent of their monthly owed balance as new rules came into effect across the province on Thursday.

According to provisions of the Consumer Protection Act, the minimum threshold will then increase by half a percentage point per year starting Aug. 1, 2020 until it reaches five per cent.

For new credit card agreements, the minimum monthly payment will now start at five per cent.
One of the news reports mentioned that other provinces were watching the outcoume.
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Sep 2, 2009
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ROYinTO wrote: One of the news reports mentioned that other provinces were watching the outcoume.
Hopefully the outcomes are good and that is also does not increase payday loans as a side-effect (and maybe reduces them in the long-term as interest payments on CCs come down).
[OP]
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Dec 12, 2009
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cloak wrote: Hopefully the outcomes are good and that is also does not increase payday loans as a side-effect (and maybe reduces them in the long-term as interest payments on CCs come down).
Good point. 4 of the big 5 banks have moved out of my neighbourhood. Each one has been replaced by 1 if not 2 of the cheque cashing establishments.
The new card agreements @ 5%, makes me wonder about product switches and churning for 0% balance transfers. Time will tell the eventual outcome.
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Jun 24, 2015
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I heard this on the news too, I think its great news, no more $10 minimum credit card payment, now it will be like $200 or so, good on them, make people pay up
Last edited by GoodFellaz on Aug 5th, 2019 8:01 pm, edited 2 times in total.
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This is pretty pointless. Pretty much every credit card out there already stipulates the minimum payment is the greater of a flat cash fee (usually $10) or between 2-3% of the total balance. In all my years I think I've only ever come across one (the HBC Mastercard) where it's been less than that.

I like the idea behind this, but it's likely to hurt people who are already in significant credit card debt since they most likely don't have access to lower-interest lending options and will be unable to actually pay off the minimums as they ramp up.
[OP]
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Piro21 wrote: This is pretty pointless. Pretty much every credit card out there already stipulates the minimum payment is the greater of a flat cash fee (usually $10) or between 2-3% of the total balance. In all my years I think I've only ever come across one (the HBC Mastercard) where it's been less than that.

I like the idea behind this, but it's likely to hurt people who are already in significant credit card debt since they most likely don't have access to lower-interest lending options and will be unable to actually pay off the minimums as they ramp up.
Well, yes and no. It initially seems pointless because it starts off at the minimums you state. For those already in debt, it will take 6 years (@ a 0.5% increase / year) for the minimums to increase to 5%.
New credit starts off at 5%.
Neither should be a hardship unless someone is already on the brink of financial disaster.
The banks make money by lending, I'm sure they will find creative ways to keep lending. The governments want us to borrow less. It is essentially a "whack a mole" environment. Let's see what pops up next.
One example would be the mortgage stress test. It did what the government wanted, only a little too well. So they tweaked the numbers to try to put things where they think they should be.
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If you carry a balance (usually at ~20% interest) on your credit card you are making someone else wealthy instead of yourself.

Rule: if you can't afford to pay your monthly bill then save up before you purchase.
If you must maintain a balance then pay it off as soon as you can.

Paying off just 5% a month is a killer to your financial future.
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Piro21 wrote: This is pretty pointless. Pretty much every credit card out there already stipulates the minimum payment is the greater of a flat cash fee (usually $10) or between 2-3% of the total balance. In all my years I think I've only ever come across one (the HBC Mastercard) where it's been less than that.

I like the idea behind this, but it's likely to hurt people who are already in significant credit card debt since they most likely don't have access to lower-interest lending options and will be unable to actually pay off the minimums as they ramp up.
People will just cash advance on their CC and cash deposit into their bank account to pay their CC. I'm actually unsure how this is going to help people. Perhaps LOC's need to be based more on income than credit worthiness.
Why can't we all just get along?
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Piro21 wrote: This is pretty pointless. Pretty much every credit card out there already stipulates the minimum payment is the greater of a flat cash fee (usually $10) or between 2-3% of the total balance. In all my years I think I've only ever come across one (the HBC Mastercard) where it's been less than that.

I like the idea behind this, but it's likely to hurt people who are already in significant credit card debt since they most likely don't have access to lower-interest lending options and will be unable to actually pay off the minimums as they ramp up.
The only people who will benefit less from the new rule are those with no real debt, but jump on balance transfer promos to earn extra money.

Generally, cards have a minimum payment of $10 plus any fees (annual fees, balance transfer fees, interest charges). Many of my CC statements print with minimum payment of $10.
Last edited by titaniumtux on Aug 4th, 2019 5:59 am, edited 1 time in total.
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profile wrote: If you carry a balance (usually at ~20% interest) on your credit card you are making someone else wealthy instead of yourself.
I also wonder who would max out CL without paying beside those who are too addicted
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dekvitaly wrote: I also wonder who would max out CL without paying beside those who are too addicted
I think a number of people who utilize credit card debt use it as a stop gap measure.

No one really plans to be unemployed for 6 months .... but it happens.

Of course, you should tell the bank that you are unemployed and have your available credit reflect your current ability to repay. But who wants to do that?
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I know that because I have received by mail one thousand letters from different financial institution announcing that.
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dekvitaly wrote: I also wonder who would max out CL without paying beside those who are too addicted
Unfortunately, my sister-in-law is. Screwed around with my wife's only CC too and severely damaged her credit score which we're trying to build back up. Sister-in-law and her ex husband had 6 CCs shared between themselves (I believe they each had one of their own and shared 4. At least I think there was 6 between the both of them) and was barely making close to or over $80,000 combined.
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Alivenate wrote: Unfortunately, my sister-in-law is. Screwed around with my wife's only CC too and severely damaged her credit score which we're trying to build back up. Sister-in-law and her ex husband had 6 CCs shared between themselves (I believe they each had one of their own and shared 4. At least I think there was 6 between the both of them) and was barely making close to or over $80,000 combined.
*shocked.....
Well, I know Americans generally fall into CC trap due to the lucrative benefits and so on but that's understandable.
OTOH, Maxing out all of the cards the way you just describe.... wow.
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dekvitaly wrote: *shocked.....
Well, I know Americans generally fall into CC trap due to the lucrative benefits and so on but that's understandable.
OTOH, Maxing out all of the cards the way you just describe.... wow.
It sounds sad but for me, I felt no remorse. What's worse was she left her job and let herself go into overdraft with her bank for over 3 months and maxed out her overdraft limit too. Better to let her go through the rough pains of living in a pile of debt rather than always asking us for a free handout. In a way, it screws with our financial situation too if we kept giving her things/money because we had enough to live off of without ever getting into that situation considering I was the only one working in the family. (I also have a pile of CC debt but I can justify it by saying that I was the only one working for almost 2 years so of course we'd get into debt at some point).

Unfortunately, she doesn't listen. Just goes in one ear and out the other. Despite being in-laws, I wouldn't give a damn if she ended up being homeless due to being so much in debt. I fear if I suggest getting a uLOC to consolidate her debts, she' just continue using the CCs with all debt "paid off" while paying back for the uLOC and mind you, I doubt she'd be approved for a high uLOC in the first place.
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Alivenate wrote: It sounds sad but for me, I felt no remorse. What's worse was she left her job and let herself go into overdraft with her bank for over 3 months and maxed out her overdraft limit too. Better to let her go through the rough pains of living in a pile of debt rather than always asking us for a free handout. In a way, it screws with our financial situation too if we kept giving her things/money because we had enough to live off of without ever getting into that situation considering I was the only one working in the family. (I also have a pile of CC debt but I can justify it by saying that I was the only one working for almost 2 years so of course we'd get into debt at some point).

Unfortunately, she doesn't listen. Just goes in one ear and out the other. Despite being in-laws, I wouldn't give a damn if she ended up being homeless due to being so much in debt. I fear if I suggest getting a uLOC to consolidate her debts, she' just continue using the CCs with all debt "paid off" while paying back for the uLOC and mind you, I doubt she'd be approved for a high uLOC in the first place.
Get her a consolidation loan then ban her from any other credit. No line of credit, no overdraft, no credit cards. It seems to me that the only way to stop her debt issues is to take anything that increases debt out of the picture.
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Piro21 wrote: This is pretty pointless. Pretty much every credit card out there already stipulates the minimum payment is the greater of a flat cash fee (usually $10) or between 2-3% of the total balance. In all my years I think I've only ever come across one (the HBC Mastercard) where it's been less than that.

I like the idea behind this, but it's likely to hurt people who are already in significant credit card debt since they most likely don't have access to lower-interest lending options and will be unable to actually pay off the minimums as they ramp up.
All my cards have only been 1%, not 2-3%. I think that's what it's trying to change. I don't think any card right now does 2-3%.
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Jon Lai wrote: All my cards have only been 1%, not 2-3%. I think that's what it's trying to change. I don't think any card right now does 2-3%.
The Amex Simply Cash is 3%, and the Tangerine Mastercard, Meridian Visa Infinite, and all the TD credit cards are 2%. That's only looking at the ones I have. I know this is anecdotal evidence, but I've only ever seen one card that's 1%, and that's the HBC one.
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Jon Lai wrote: All my cards have only been 1%, not 2-3%. I think that's what it's trying to change. I don't think any card right now does 2-3%.
In my experience, “Interest + % of Balance” is a more common minimum payment term on US credit cards. In Canada (outside Quebec), I see more “Interest + $10.” Bear in mind a month of 19.99% interest is ~1.6% on its own so it can work out close to 2%, but that doesn’t mean that’s what the payment term is.
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jacnel wrote: Get her a consolidation loan then ban her from any other credit. No line of credit, no overdraft, no credit cards. It seems to me that the only way to stop her debt issues is to take anything that increases debt out of the picture.
Can't say we haven't tried but pretty sure it'll just fall on deaf ears. Sure closing all her CCs will help stop her from spending (maybe keep one open to keep AAoA ongoing) but even then, whose to say she's gonna do what we advise her to do. She hasn't followed anyone's advice about anything (credit, money, life, relationships, etc.) so for me at least, I gave up spending any of my time and breath offering advice. We'll see how it goes.

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