Credit card rates remain near 20% despite 9 Bank of Canada rate cuts, costing Canadians hundreds monthly

Canadians with credit card debt are paying hundreds more each month than they would if Bank of Canada rate cuts had reduced their interest rates. The central bank has cut its overnight rate from 5% to 2.25% since June 2024, delivering relief to variable-rate mortgages and HELOCs. But for the roughly 54% of Canadians who carry a credit card balance, the wait for lower rates has been fruitless. Most credit card rates remain near 20%—exactly where they were before the first rate cut. The mechanism that lowers variable borrowing costs does not apply to most credit cards. As a result, consumers are paying hundreds more in interest each month than they would if those rates had dropped in line with the Bank of Canada’s easing cycle.