How the debt avalanche method works
Avalanche keeps paying every minimum, then sends extra money to the active debt with the highest APR. It is usually the lowest-interest mathematical path.
How it works
The planner uses simplified monthly interest: APR divided by 12. Real credit card issuers may use daily periodic rates, fees, grace periods, and allocation rules that differ.
How the debt snowball method works
Snowball keeps paying every minimum, then sends extra money to the smallest active balance. It can close accounts sooner, which some people find motivating.
Why minimum payments can be expensive
Minimum payments may cover mostly interest early on, especially for high-APR credit cards. That can stretch payoff timelines and increase total interest.
How extra payments change the timeline
Extra payments reduce principal faster. Once a debt is paid off, this calculator redirects that freed payment into the next priority debt.
FAQ
The planner uses simplified monthly interest: APR divided by 12. Real credit card issuers may use daily periodic rates, fees, grace periods, and allocation rules that differ.
Is the debt snowball method better for motivation?
Some people prefer Snowball because it can close smaller accounts sooner, which may make progress feel easier to maintain.
Which debt payoff method saves the most money?
Debt Avalanche usually saves the most interest because it targets the highest APR first.
How is credit card interest calculated?
This MVP uses APR divided by 12 for a simplified monthly estimate. Real issuers may use a daily periodic rate and different rules.
What happens when one debt is paid off?
The calculator redirects that freed minimum payment to the next priority debt.
Should I include my mortgage?
This tool is designed for consumer debts like credit cards, loans, medical debt, and similar balances. Mortgage analysis often needs separate assumptions.
Are the calculations financial advice?
No. The results are educational scenarios based on your inputs, not personal financial advice.