Why the snowball method often wins in real life
Research from the Harvard Business Review and others found that debt holders who paid smallest-balance-first were more likely to pay off all their debt, even though they paid more in interest. The reason is psychological: the quick first win reinforces the habit. Avalanche is the right answer on a spreadsheet; snowball is often the right answer for a human. This calculator shows both so you can decide which trade-off you want to make.
FAQ
Why does minimum-only take so long?
Because minimum payments are usually 1–3% of the balance or a flat $25, whichever is greater. On a card with 24% APR, the minimum is often less than the interest charged, so the balance grows or barely shrinks. A $5,000 balance at 24% APR with 2% minimum payment takes about 16 years and costs more in interest than the original balance.
What if I get a 0% balance transfer offer?
Then that card's APR becomes 0% for the promo period (usually 12–21 months). After the promo, the APR jumps to the cash-advance rate, often 25–30%. Pay the card off during the promo or the math gets much worse than the original. This calculator lets you set the APR to 0 to simulate that.
Should I stop contributing to retirement to pay off cards faster?
Almost never. If your employer matches retirement contributions, the match is a 50–100% instant return — beating any credit card APR. Always capture the full match first, then attack the debt. If there's no match, the rule of thumb is: if your card APR is above 10% and your expected investment return is below 6%, prioritize the debt.
Methodology
Each month, every card accrues interest = balance × (APR/12). The minimum payment is taken (the greater of the user input or interest + 1% of balance). Any leftover budget goes to the target card per strategy. When a card is paid off, its minimum payment rolls into the budget for the next target. The minimum-only simulation enforces no extra payment above the minimum on any card. Avalanche target = highest APR with positive balance; snowball target = smallest balance with positive balance. Source: standard amortization loop, identical to the algorithm in any consumer-finance textbook.