See exactly how long it takes to pay off your debt, how much interest you'll pay, and how much you save by adding extra monthly payments. Compare minimum payments vs accelerated payoff instantly.
When you have multiple debts, two proven strategies can help you pay them off systematically. Both work — the best one depends on your personality and financial situation.
Pay minimum on all debts. Put all extra money toward the smallest balance first. Once paid off, roll that payment to the next smallest. Best for: people who need psychological wins to stay motivated.
Pay minimum on all debts. Put all extra money toward the highest interest rate first. Once paid off, attack the next highest rate. Best for: people who want to save the maximum money mathematically.
The avalanche method always saves more in interest. But research shows the snowball method leads to higher debt payoff rates because the psychological momentum from early wins keeps people on track. Dave Ramsey popularized snowball for this reason.
Credit card companies calculate minimum payments — typically 1–2% of balance or $25–35, whichever is greater — to keep you in debt as long as possible. This is intentional. Here's what minimum payments actually cost:
When you only pay the minimum, your balance barely decreases because most of your payment covers interest. On a $10,000 card at 22% APR, your first minimum payment of ~$250 includes ~$183 in interest — only $67 reduces the actual debt.
Paying down debt while adding new charges is like bailing water from a sinking boat. Freeze or cut high-interest cards and commit to a cash or debit-only budget while in payoff mode.
Every extra dollar applied to principal saves multiples of that dollar in future interest. Side income, selling unused items, cutting subscriptions — redirect everything to debt during this period.
Many people don't realize you can simply call your credit card company and ask for a lower rate. If you have a good payment history, approval rates for rate reduction requests are surprisingly high.
Balance transfer cards with 0% intro APR periods (12–21 months) allow you to pay down principal without interest for that period. Watch for transfer fees (typically 3–5%) and ensure you can pay off the balance before the intro period ends.
Tax refunds, bonuses, inheritance, or any unexpected money should go directly toward your highest-interest debt. A single $2,000 tax refund applied to a high-interest balance can shave years off your payoff timeline.