Debt Payoff Calculator

Quick answer: avalanche or snowball?

Both methods pay the minimum on every debt and put every spare dollar on one target debt. When that debt is gone, its payment rolls into the next one. They differ only in the order:

• Avalanche: highest interest rate first. This almost always costs the least interest.
• Snowball: smallest balance first. This closes accounts sooner, which research suggests helps many people stick with the plan.

If you'll follow either plan to the end, avalanche saves money. If you've started and stopped before, the quick wins of snowball may be worth the extra interest. The calculator shows both side by side, so you can see exactly what the choice costs.

How the calculator works

It simulates your debts month by month, to the cent:

Balance × APR ÷ 12 = interest added this month

Example: $5,000 × 22.15% ÷ 12 = $92.29.

1. Interest is added to each balance at the start of the month.
2. Minimums are paid on every debt.
3. The rest of your monthly budget — your total minimums plus any extra you add — goes to the target debt.
4. Rollover: when a debt is paid off, its minimum stays in the budget and moves to the next target.

The "minimums only" plan pays each debt's minimum and nothing more, with no rollover. Card issuers calculate interest daily and lower the minimum as the balance falls, so your statements will differ a little from the estimate.

Avalanche vs snowball: a worked example

Three debts, with $100 a month added on top of the minimums, for a total budget of $470 a month:

Avalanche saves $351 in interest over snowball here. Snowball's first win comes in month 12 (the personal loan); avalanche's first payoff is in month 20 (the store card). Compared with paying only the minimums, the avalanche plan saves $5,365 in interest and finishes 3 years, 5 months sooner.

The difference between avalanche and snowball depends on your debts. When your smallest debt also has the highest rate, the two plans are identical. The gap grows when a large balance carries a much higher rate than the small ones.

What an extra $50, $100 or $200 does

In this example, the amount you add each month matters far more than the order. Same three debts:

Going from no extra to $200 a month cuts avalanche interest from $8,447 to $3,791. Notice the first row: even with no extra money, rolling each paid-off minimum into the next debt finishes in 4 years, 9 months with $8,447 of interest, against 6 years, 7 months and $10,566 for minimums only. Use the budget calculator to find room for an extra payment, or put part of a raise or bonus toward it.

What the research says

If avalanche is cheaper, why does snowball have so many fans? Three studies help explain it.

People prefer to clear small debts first

In four experiments, Amar, Ariely, Ayal, Cryder and Rick (2011) found that participants "consistently pay off small debts first, even though the larger debts have higher interest rates" — a bias the authors call debt account aversion. Pointing people's attention to the interest building up helped them cut their debt faster (Journal of Marketing Research). In other words, the natural pull is toward snowball even when it costs more.

Closing accounts predicts finishing

Gal and McShane (2012) studied nearly 6,000 clients of a debt settlement company. Closing more accounts — not just paying off more dollars — predicted whether people completed the program at 6 months, 1 year and 2 years; "the fraction of accounts is more predictive" (Kellogg, Kellogg Insight).

Concentrating payments boosts motivation

Kettle, Trudel, Blanchard and Häubl (2016) ran a field study and three experiments. They found that concentrating repayments on fewer accounts increases motivation to get out of debt, most strongly when payments go to the smallest accounts (Journal of Consumer Research).

The takeaway: the best plan is the one you finish. Both methods concentrate payments, which is what the research rewards. If you choose avalanche, keep the interest you're saving in view. If you choose snowball, know the cost — the calculator shows it.

How to choose your method

Run your own debts through the calculator, then ask yourself three questions:

1. How big is the interest gap? If avalanche saves only a small amount, the motivation of snowball may be worth it. If it saves hundreds or thousands, avalanche is hard to beat.
2. How long until your first payoff? If avalanche's first win is more than a year away, ask honestly whether you'll stay with it.
3. Have you stuck with a plan before? If past attempts fizzled, the quick wins may matter more than the math.

You can also start with snowball to clear one or two small balances, then switch to avalanche for the rest. Whatever you choose, keep paying at least the minimum on every debt, and stop adding new charges to the cards you're paying off.

What paying only the minimum costs

Your credit card statement has to show how long it will take to pay off your balance with minimum payments, and how much you'd need to pay each month to clear it in 36 months. As the CFPB puts it, "if you make only the minimum payment, it could take years to pay off your credit card." Both figures assume you make no new charges (CFPB).

Here's a $5,000 balance at 22.15% — the Federal Reserve's average for accounts charged interest — paid off with a fixed monthly payment and no new charges:

At $100 a month, most of each early payment goes to interest: the first month's interest alone is $92.29. Real minimum payments usually shrink as the balance falls, which stretches payoff out even longer than a fixed payment would.

Average credit card APR in 2026

The Federal Reserve's G.19 release reports the average interest rate on credit card plans at commercial banks. For accounts that were charged interest, it was 22.15% in the second quarter of 2026; across all accounts, including people who pay in full, it was 20.94% (Federal Reserve G.19).

Revolving consumer credit, which is mostly credit card balances, stood at $1,352.4 billion in August 2026. If you don't know your card's rate, check your statement — it's listed there — rather than using the average.

Other ways to speed things up

• Ask for a lower rate. If you've paid on time, ask your card issuer. Even a few points makes a difference at today's rates.
• Balance transfer cards offer a low introductory rate for a set period, usually for a fee. They only help if you pay off the balance before the intro rate ends and stop adding new charges.
• Debt consolidation loans replace several debts with one fixed payment. They're worth it only if the rate and fees are lower than what you pay now.
• Hardship programs. Many lenders will temporarily lower payments or rates if you've lost income. Ask before you miss a payment.
• Keep a small cushion. 15% of adults say a surprise $400 expense would go on a credit card they'd pay off over time (Federal Reserve SHED). A starter emergency fund stops new surprises from undoing your progress.

If your employer matches 401(k) contributions, many people keep contributing enough to get the full match while paying off debt. The 401(k) paycheck calculator shows what that costs in take-home pay, and the paycheck calculator shows your full take-home.

Common questions

Is the debt avalanche or snowball better?

Avalanche (highest APR first) almost always costs the least interest. Snowball (smallest balance first) gives quicker wins, and research links closing accounts to sticking with repayment. Pick the one you'll finish.

What is the average credit card interest rate?

22.15% on accounts charged interest in the second quarter of 2026, and 20.94% across all accounts, according to the Federal Reserve.

What happens if I only make the minimum payment?

It can take years. In our example, $5,000 at 22.15% paid at $100 a month takes 11 years, 9 months and costs $9,012 in interest.

Does the 36-month payoff amount on my statement include new purchases?

No. It assumes you make no further charges.

How is credit card interest calculated?

Roughly balance × APR ÷ 12 each month. Card issuers compute interest daily, so real interest differs slightly.

Should I save an emergency fund before paying off debt?

Many people build a small starter fund first so a surprise expense doesn't go back on a card, then focus on high-interest debt.

Sources

1. Consumer Credit — G.19 (October 7, 2026 release) — Board of Governors of the Federal Reserve System. Accessed October 13, 2026.
2. A box on my credit card bill says that I will pay off the balance in three years if I pay a certain amount. What does that mean? — Consumer Financial Protection Bureau. Accessed October 13, 2026.
3. Amar, Ariely, Ayal, Cryder & Rick (2011), Winning the battle but losing the war: the psychology of debt management, Journal of Marketing Research 48 — Bar-Ilan University research portal. Accessed October 13, 2026.
4. Gal & McShane (2012), Journal of Marketing Research 49: 487–501 — Kellogg School of Management. Accessed October 13, 2026.
5. To beat debt, consider starting small — Kellogg Insight. Accessed October 13, 2026.
6. Kettle, Trudel, Blanchard & Häubl (2016), Repayment concentration and consumer motivation to get out of debt, Journal of Consumer Research 43(3): 460–477 — University of Miami. Accessed October 13, 2026.
7. Economic Well-Being of U.S. Households in 2025 — Board of Governors of the Federal Reserve System. Accessed October 13, 2026.