Credit card debt is one of the most expensive forms of debt in Canada. Standard rates sit at 19.99% — and store cards or some retail products run even higher. If you're carrying a balance month to month, a significant portion of every payment goes to interest rather than reducing your principal.
Getting out of credit card debt requires a clear strategy. This guide covers every approach — from DIY methods when debt is manageable to formal options when it is not.
Start with a complete list of every credit card balance:
Total it up. This number — however uncomfortable — is your starting point. Many Canadians discover they owe significantly more than they realized once they sit down and add it all up.
Pay minimum payments on all cards. Then direct every dollar of extra payment to the card with the highest interest rate. Once that is paid off, redirect the freed payment to the next highest rate.
This minimizes the total interest you pay over time and gets you out of debt fastest mathematically. The downside is that the highest-rate card may not be the smallest balance — early wins can feel slow.
Pay minimums on all cards. Direct extra payments to the card with the smallest balance first, regardless of rate. Once that is paid off, redirect the freed payment to the next smallest balance.
You pay more in total interest vs. the avalanche method, but the psychological benefit of clearing accounts quickly keeps many people motivated. See our full comparison of both methods.
Some Canadian credit cards offer 0% promotional rates on balance transfers for 6–12 months. If you qualify, you can transfer existing balances to the new card and pay aggressively during the promotional period with no interest accruing.
Watch for: transfer fees (typically 1–3%), rates that jump sharply after the promo period, and whether you can realistically pay off the balance before the promotion ends.
If you have decent credit (roughly 650+), a personal loan at 10–15% used to pay off your 19.99% credit cards will save meaningful interest. You get a single fixed monthly payment and a definite payoff date.
Critical: do not run your credit cards back up after consolidating. Many people end up deeper in debt by making this mistake.
If your income is not enough to keep up with interest charges but you can repay your principal over 3–5 years, a Debt Management Plan through a non-profit credit counsellor can eliminate or reduce interest across all cards. You make one payment to the agency monthly.
You repay 100% of the principal, but with interest removed, the total cost drops substantially.
If your total credit card and unsecured debt is genuinely unmanageable — meaning you cannot realistically pay it off even without interest in 5 years — a consumer proposal may allow you to legally repay just a portion (often 20–50%) with all interest stopped. Filed through a Licensed Insolvency Trustee, it binds all unsecured creditors and immediately stops collection activity.
Before seeking outside help, it is always worth calling your credit card issuer directly. Many will offer:
This works best if you have a good payment history and are experiencing a temporary hardship (job loss, illness). Be specific about your situation and ask for a supervisor if the first representative is unhelpful.
Consider a professional consultation if:
A Licensed Insolvency Trustee or non-profit credit counsellor will give you a free assessment of your options.
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