Quick answer: Cards of 5,000 at 24%, 3,000 at 18% and 8,000 at 30% with 1,000 a month are cleared in 20 months with 3,554.88 interest by the avalanche method, against 21 months and 4,217.58 by the snowball method.
How it's calculated
Every month each card adds interest of balance × APR ÷ 12. Your budget first pays each card's minimum; whatever is left goes to one target card. When a card is cleared, its minimum joins the extra payment for the next one.
Avalanche: the target is the card with the highest APR. This always costs the least interest. Snowball: the target is the card with the smallest balance. It usually costs a little more but closes a card sooner.
The budget must at least cover all the minimum payments. For one card, use the credit card payoff calculator.
Worked examples
- 5,000 @ 24%, 3,000 @ 18%, 8,000 @ 30%, budget 1,000 (avalanche): 20 months, interest 3,554.88
- Same cards, snowball: 21 months, interest 4,217.58 (662.69 more)
Frequently asked questions
Which method should I use?
Avalanche saves the most money. Snowball can keep you motivated because small cards disappear quickly. The difference is often small, as the example shows.
Why must the budget cover the minimums?
Missing a minimum payment brings late fees and can harm your credit record, so the plan pays every minimum first.
Would one loan be cheaper?
If a personal loan or balance transfer has a lower rate, compare it with the debt consolidation calculator.
What is the avalanche method?
You pay the minimums, then put all extra money on the card with the highest rate. It normally costs the least interest.
What is the snowball method?
You pay the minimums, then put all extra money on the smallest balance. It costs a bit more, but clearing cards quickly can help you keep going.
Should I close a card once it is paid off?
Not always. Keeping it open with no balance can help your credit history, but cut it up or close it if it tempts you to spend.