Aug 13, 2025
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Canadians are carrying record-high levels of credit card debt — and the cost of borrowing isn’t getting any cheaper. In 2024, the average credit card interest rate in Canada hit 20.5%, and balances are ballooning. According to Equifax Canada, credit card debt surpassed $113 billion in early 2024 — a new all-time high — with more than half of Canadians reporting they carry a balance month to month.
With such steep interest charges, simply making minimum payments won’t get you ahead. But the right strategy can. Whether you're overwhelmed by monthly bills or just tired of wasting money on interest, here are four proven ways Canadians can pay off their credit card debt faster.
1. Consolidate credit cards to a low, fixed rate
Credit cards charge compound interest — meaning you pay interest on your interest. If you’re only covering the minimum payment, your balance barely moves. That’s why credit card consolidation loans can be a game changer.
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Consolidation involves moving your high-interest credit card debt into a lower-interest personal loan with fixed payments and a clear payoff date. Online marketplaces like LoanConnect or Borrowell allow Canadians to compare loan offers from multiple lenders in minutes. Some even offer loans for as little as $500 — perfect for smaller balances.
Tip: Look for a lender offering no prepayment penalties so you can pay down your loan faster when you have extra cash.
What is the best credit card in Canada? It might be the RBC® British Airways Visa Infinite,, with a $1,176 first-year value. Compare more than 140 cards more in 5 seconds.
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2. Use home equity to eliminate high-interest debt
If you own a home, chances are you’ve built up equity. A home equity line of credit (HELOC) or a refinance lets you access that equity to pay off higher-interest debt like credit cards — often at a much lower rate (typically between 6% to 8%).
This strategy is especially effective for homeowners with solid credit and enough equity to consolidate large debts. But proceed with caution: you're turning unsecured debt into debt secured by your home. If you can’t make payments, your home could be at risk.
Canadian lender tip: Check with your existing mortgage provider or credit union for HELOC options. You can also use rate comparison tools from sites like Ratehub.ca to explore competitive offers.
3. Explore accredited debt relief or consumer proposals
If your debt has become unmanageable, a debt relief solution could be the reset you need. In Canada, the most common option is a consumer proposal — a legally binding agreement negotiated through a Licensed Insolvency Trustee to reduce the amount you owe and stop collection calls.
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Another option is credit counselling, which can help you create a debt management plan (DMP) to repay your debt in full — but with reduced interest rates. Organizations like Credit Counselling Canada or Consolidated Credit can walk you through your options.
Just be sure the service you use is non-profit or government-licensed, and watch for red flags like upfront fees or pressure tactics.
Read more: The ultra-rich are bailing on volatile stocks right now — these 4 shockproof assets are their new safe havens
4. Budget with purpose — and stick to it
The final — and most sustainable — way to crush credit card debt is to stop relying on your cards in the first place. That means tracking every dollar and building a plan to pay down what you owe.
Apps like You Need A Budget (YNAB) or Monarch Money let you connect your accounts, set spending targets, and monitor progress. YNAB reports that the average new user saves $600 by the second month and $6,000 in the first year.
When you give every dollar a job — whether it’s for groceries, gas, or debt repayment — you gain control. And when you cut spending in just a few areas, you can redirect those dollars toward paying down your balance faster.
Bottom line
If you're struggling with credit card debt, you’re not alone — but you do have options. Whether it’s consolidating into a personal loan, tapping into home equity, exploring debt relief, or using a smart budgeting app, the key is to take action.
The sooner you start, the less you’ll pay in interest — and the faster you’ll become debt-free.
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Romana King is the Senior Editor at Money.ca. She writes for various publications, and her book -- House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth -- continues to be an Amazon bestseller. Since its publication in November 2021, this book has won five awards, including the New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award in 2022.
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