Debt Payoff Calculator — Avalanche vs Snowball Simulator

The Debt Avalanche method allocates all extra payments toward the account with the highest interest rate (APR) while paying minimums on the rest, mathematically minimizing the total interest paid and shortening total payoff duration. The Debt Snowball method pays off the smallest balance first regardless of interest rate, maximizing psychological momentum through fast quick-wins.

Depending on the interest rate spread (for example, comparing a 28% APR store card against a 6% auto loan), the Avalanche method routinely saves between $1,500 and $8,000+ in pure interest and finishes 3 to 10 months sooner than the Snowball method on a $30,000 multi-debt portfolio.

As a mathematical rule of thumb: any high-interest consumer debt with an APR above 7% to 8% (credit cards, personal loans) should be paid off aggressively before investing. Paying off a 24% APR credit card is equivalent to a guaranteed, risk-free, tax-free 24% return on investment—something no stock market index can guarantee.

Most credit cards recalculate minimum payments as 1% to 2% of the remaining balance plus accrued monthly interest. If you only pay the newly reduced minimum, your payoff timeline extends to 20–30 years. To crush debt fast, maintain your fixed initial payment amount even as mandatory minimums drop.

Closing a paid-off credit card can temporarily lower your FICO score by reducing your total available credit limit (which increases your overall credit utilization ratio) and eventually reducing the average age of accounts. For cards with no annual fee, keeping them open with occasional small recurring subscriptions is generally optimal.