Snowball vs avalanche
Both methods pay minimums on everything and throw all extra money at one target debt. When that debt is gone, its minimum rolls into the next target, so your payment power grows with each payoff. The only difference is the order.
Avalanche targets the highest interest rate first. It's mathematically optimal: you'll pay the least total interest and finish fastest. Snowball targets the smallest balance first, regardless of rate. It costs a little more in interest but delivers a quick early win, which research on debt behavior suggests helps many people stick with the plan. Toggle between them above — for most people the difference in months is small, and the right answer is whichever one you'll actually follow.
Why the extra payment matters so much
Minimum payments on credit cards are designed to keep you paying for years; they're often only 1%–2% of the balance plus interest. Paying minimums only on the default example above takes about ten years. Adding $200 a month cuts that to under three years and saves thousands in interest. The calculator shows both scenarios side by side so you can see exactly what your extra dollars are buying.
Getting your numbers right
Pull balances and APRs from your most recent statements — credit card APRs are usually listed near the bottom of the first page. If a card has a 0% promotional rate, enter the rate it will jump to, and consider using avalanche so it's paid before the promo ends. Don't include your mortgage unless you're specifically planning to pay it down aggressively; it's usually better handled separately.
Frequently asked questions
+Should I save or pay off debt first?
Most advisers suggest a small emergency fund first (often $1,000 to one month of expenses), then attack high-interest debt, then build savings to three to six months. Any debt above roughly 7%–8% is usually worth paying before investing.
+Should I consolidate instead?
If you can qualify for a personal loan or balance-transfer card at a much lower rate than your cards, consolidation reduces interest and simplifies payments. It only works if you stop adding new balances. Run the consolidated loan through our loan payment calculator to compare.
+What if my minimum payments don't cover the interest?
Then the balance grows each month and the calculator will flag it. This happens with high-APR cards and very low minimums. Raise the payment on that debt first, or contact the issuer about a hardship program.
+Does paying off debt improve my credit score?
Paying down credit card balances lowers your utilization ratio, which is one of the biggest factors in your score, so yes — often quickly. Paying off an installment loan has a smaller, sometimes neutral effect.