Debt Payoff Calculator

The highest-rate-first ordering, always — but the size of the difference is the part worth checking rather than the direction of it. Directing a spare dollar at the most expensive interest available is the cheapest possible use of that dollar, so the avalanche can never cost more in interest than the snowball. What that guarantee does not promise is that the gap is large. On the three debts this page opens with, it comes to $365.13 spread over more than two years. Change the spread of balances and rates and the same comparison can be worth several thousand dollars, or exactly nothing. That is why the band above prices both orderings on your own figures instead of printing a verdict: the answer to "which is better" is settled, and the answer to "by enough to care about" is not.

Not for interest — by definition there is none to save, and an ordering that targets it first saves nothing at all in the only currency this calculator measures. What clearing it does do is remove a monthly obligation, and that minimum payment then rolls onto whatever you target next, which does have a rate. So the effect is indirect: you are not saving interest on the 0% debt, you are accelerating everything after it. Two cautions. A 0% promotional rate on a card expires, and the balance reprices to something much higher on a date you should know. And deferred-interest financing, common in store and medical plans, is a different structure entirely — if the balance is not cleared before the window closes, the interest accrued over the whole period can become payable at once. Neither is modelled here.

Almost certainly not — it is one of the more common outcomes, and there are three distinct reasons for it. The orderings can simply coincide, which happens whenever your smallest balance also carries your highest rate: both strategies then clear your debts in the same sequence, so there is nothing to choose between. Or your budget may cover the minimum payments and nothing more, in which case there is no surplus to direct and the strategy has no lever to pull — the calculator says so explicitly when that is the case. Or you may have a single debt, where there is no order to choose at all. The comparison band names which of the three applies rather than leaving you to guess, because "they are the same" is useful information and "they are the same for no stated reason" reads like a fault.

It makes the result slightly conservative rather than wrong, and the direction of the error is worth understanding. This model holds each minimum at the figure you enter, while a real card recomputes it every month against a shrinking balance. So as a card balance falls, its real minimum falls below the one used here, and the money the model spends on that minimum would in reality be free for your target debt. The practical effect is small, because the surplus is what drives the payoff and the surplus is unchanged — but it means a real payoff is marginally faster than this shows, not slower. Enter the minimum from your current statement. If you want the month-by-month behaviour of a shrinking minimum on one card, the credit card payoff calculator models it directly.

No, and this calculator will not model it. Paying less than a required minimum is a delinquency rather than a strategy: it can trigger a late fee, a penalty rate on many card agreements, and a report to the credit bureaus once the payment is thirty days late — costs that dwarf anything the reordering could save. This is why a budget below the combined minimums is rejected with an error instead of producing a schedule. Every version of both methods pays every minimum, every month, on every debt. The only thing either strategy decides is where the money above the minimums goes.

Across separate accounts, yes — you decide how much to send each creditor, so the ordering is yours to implement. Inside a single credit card carrying several balances at different rates, it is not up to you, and the answer is set by regulation. 12 CFR 1026.53 requires a card issuer to allocate any amount paid above the required minimum first to the balance with the highest annual percentage rate, then to the remaining balances in descending order of rate. So an extra payment on a card that holds a purchase balance and a cash-advance balance is applied the way the avalanche would apply it, whether or not that was your plan. Two exceptions exist in the same rule, for deferred-interest balances near the end of their promotional window and for secured balances at the consumer's request. Note the scope carefully: this governs how an issuer splits your payment within one account, and says nothing about which of your several debts to pay first.