What does carrying that balance actually cost you?
See your debt-free date and total interest under four payoff strategies — and whether paying it down beats investing the extra cash.
✓ All calculations happen in your browser — we never see your numbers
Your debts
Strategy to highlight
Avalanche pays the highest-rate debt first; snowball pays the smallest balance first. The comparison table below always shows all four.
You'll be debt-free in
Apr 2030
Avalanche saves you $4,944 and 65 months vs. minimum payments
Strategy comparison
| Strategy | Payoff date | Interest paid | Monthly cost |
|---|---|---|---|
| Min Only | Sep 2035 | $9,494 | $640/mo |
| Extra Payment | Apr 2030 | $4,599 | $840/mo |
| Avalanchecheapest | Apr 2030 | $4,550 | $840/mo |
| Snowball | Apr 2030 | $4,550 | $840/mo |
Remaining balance by strategy
Pay down debt, or invest the extra?
Pay down debt first
Your debt costs
8.8%/yr
Investing returns (assumed)
7.0%/yr
Your debt costs 8.8% on average — more than the 7.0% you assumed you'd earn investing. Paying it down first is the better bet here, before taxes.
Simplified estimate — ignores taxes, which can matter a lot (e.g. tax-advantaged retirement accounts vs. a taxable brokerage). Not tax advice.
Avalanche vs snowball explained
The avalanche method pays minimums on every debt while directing all extra money toward whichever debt has the highest interest rate, regardless of its balance. Mathematically, this minimizes total interest paid and gets you debt-free in the least amount of time, because you're always attacking the debt that's costing you the most per dollar owed.
The snowball method instead directs extra money toward whichever debt has the smallest balance, regardless of its interest rate. It typically costs slightly more in total interest than avalanche, but it produces quick wins — fully paying off a small debt early — which can build the motivation and momentum many people need to stick with a payoff plan. Neither method is objectively wrong; avalanche is the better choice on pure math, snowball is the better choice if behavioral momentum matters more to your situation than minimizing every last dollar of interest.
Why minimum payments trap you
Minimum payments on credit cards are typically calculated to be just barely above the interest accruing each month, which means an enormous share of a minimum payment goes toward interest rather than reducing your balance. On a $5,000 balance at 22% APR, making only minimum payments can take well over a decade to pay off and cost several thousand dollars in interest beyond the original balance — for the exact same $5,000 you originally borrowed. The trap isn't a moral failing; it's how minimum payments are structured by design.
Pay off debt or invest the difference?
The mathematically correct answer depends on comparing your debt's interest rate against your realistic expected investment return. If your debt costs more in interest than you could reasonably expect to earn investing — which is almost always true for credit card debt in the high-teens to mid-20s percent range — paying down the debt first is the better guaranteed return, since reducing a 22% debt is equivalent to a guaranteed 22% return with zero risk. For lower-rate debt, like some mortgages or federal student loans in the 3-6% range, the comparison against historical market returns is genuinely closer, and reasonable people land on either side depending on their risk tolerance and how much they value the psychological relief of being debt-free.
Frequently asked questions
Which is better, avalanche or snowball?
Avalanche minimizes total interest paid and payoff time mathematically. Snowball can cost slightly more but builds momentum through faster early wins. Choose avalanche if you're confident you'll stick with the plan either way; choose snowball if you know you need quick wins to stay motivated.
Why does my balance barely move with minimum payments?
Because minimum payments are typically set just above the interest accruing that month, leaving very little to actually reduce the principal balance. This is a structural feature of how minimum payments are calculated, not a sign that something's wrong with your payments.
Should I pay off debt before investing for retirement?
For high-interest debt like credit cards, generally yes — the guaranteed return from eliminating, say, a 22% interest rate beats most realistic investment return expectations. For low-interest debt, it's a closer call that depends on your risk tolerance and specific rates; this calculator's pay-vs-invest comparison can help you see your specific numbers.
Does adding extra payments really make a big difference?
Yes, often dramatically — directing even a modest extra amount toward debt each month, especially using the avalanche method, can cut years off your payoff timeline and save substantial interest compared to minimum payments alone.
Is debt consolidation a good idea?
It can be, if it genuinely lowers your average interest rate and you avoid running up new balances on the accounts you paid off. It's not a fix on its own — it's only beneficial if the new rate is meaningfully lower and you stick to a real payoff plan afterward.
What interest rate makes investing clearly better than paying off debt?
There's no universal cutoff, but debt above roughly 7-8% is hard to beat with typical long-term investment returns, making payoff the stronger choice in most cases. Below that range, it becomes a genuinely close call that depends on your personal risk tolerance.