Plan Your Debt Freedom
Add your credit cards and see different payoff strategies.
Your Credit Cards
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Payoff Strategy Results
Snowball Method
Payoff Time:
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Total Interest:
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Motivation:
Quick wins
Avalanche Method
Payoff Time:
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Total Interest:
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Savings:
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Recommended Strategy
Based on your situation
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Payoff Timeline
Potential Savings
Minimum Payments Only
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With Your Budget
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Interest Saved
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Credit Card Debt Payoff Strategies: Snowball vs Avalanche
Paying off credit card debt requires strategy. The two most popular methods are the Snowball Method (popularized by Dave Ramsey) and the Avalanche Method (mathematically optimal). This calculator shows you which works best for your situation.
Snowball Method Explained
How it works:
- List all debts from smallest balance to largest
- Make minimum payments on all debts
- Put extra money toward the smallest debt
- When smallest debt is paid, roll that payment to next smallest
- Repeat until all debts are paid
Best for: People who need quick wins and psychological motivation. Studies show this method has higher completion rates.
Avalanche Method Explained
How it works:
- List all debts from highest interest rate to lowest
- Make minimum payments on all debts
- Put extra money toward the highest interest debt
- When highest interest debt is paid, roll that payment to next highest
- Repeat until all debts are paid
Best for: People who want to save the most money on interest. Mathematically, this is the most efficient method.
Debt Payoff Statistics
| Statistic | Value | Impact |
|---|---|---|
| Average Credit Card Debt | $6,194 | Per U.S. household |
| Average Interest Rate | 19.07% | As of 2024 |
| Minimum Payment Trap | 30+ years | To pay off $5,000 at 18% |
| Extra $100/month | Saves ~$3,000 | On $10,000 debt |
Frequently Asked Questions
Which method actually saves more money?
The Avalanche method saves more money mathematically, but the Snowball method has higher completion rates. The best method is the one you'll stick with.
Should I pay off debt or save first?
Build a $1,000 emergency fund first, then attack debt aggressively. Once debt-free, build 3-6 months of expenses.