Credit Card Payoff Calculator Using Debt Avalanche Method for Multiple Debts
Credit Card Payoff Calculator
Repayment Results
How to Use This Calculator
- Enter your monthly budget - This should be the total amount you can afford to pay toward credit cards each month
- Input each credit card's details:
- Card Name: Give each card a recognizable name
- Current Balance: The amount you currently owe
- Minimum Payment: The required minimum monthly payment
- APR: The annual percentage rate (interest rate) for purchases
- Check "Additional Credit Card" if you have more than 6 cards
- Click "Calculate Plan" to generate your optimized repayment strategy
- Review the results including payoff timeline, interest savings, and month-by-month breakdown
- Click "Show/Hide" under Details to see the complete payment schedule for each card
How the Debt Avalanche Method Works
The Avalanche method prioritizes paying off debts with the highest interest rates first while making minimum payments on others. The strategy follows these principles:
- List all debts with their current balances, minimum payments, and APRs
- Sort debts by APR from highest to lowest interest rate
- Pay minimum amounts on all debts to avoid penalties
- Apply extra payments to the highest APR debt until it's eliminated
- Move to next highest APR and repeat the process
- Continue until debt-free - each eliminated debt frees up more money for the next target
How to Use the Debt Avalanche Method to Pay Off Debt?
Debt avalanche example
Monthly budget set aside for credit cards: $550
Let’s say you have the following debts:
- Credit card 1 balance: $4,500 at 18.9% interest, with a $110 minimum payment.
- Credit card 2 balance: $5,500 at 20.9% interest, with a $130 minimum payment.
- Credit card 3 balance: $7,000 at 16.9% interest, with a $150 minimum payment.
- Credit card 4 balance: $8,400 at 22.9% interest, with a $120 minimum payment.
With a monthly payment of 550.00, all credit cards will be cleared in 92 months (7 years 8 months). Total paid: $50597.96, including $25197.96 in interest.
| Credit Card | APR (%) | Payoff Duration | Total Interest Paid ($) | Total Amount Paid ($) | Repayment Schedule |
|---|---|---|---|---|---|
| #1: Card 4 | 22.90% | 92 months(7 years 8 months) | $13385.68 | $21785.68 | Pay $160.00/month until month #66,Then Pay $253.56/month until month #67,Then Pay $270.00/month until month #76,Then Pay $336.01/month until month #77,Then Pay $508.15/month until month #78,Then Pay $550.00/month until month #91,Then Pay $547.96/month until month #92 (final payment). |
| #2: Card 2 | 20.90% | 78 months(6 years 6 months) | $4551.85 | $10051.85 | Pay $130.00/month until month #77,Then Pay $41.85/month until month #78 (final payment). |
| #3: Card 1 | 18.90% | 67 months(5 years 7 months) | $2776.44 | $7276.44 | Pay $110.00/month until month #66,Then Pay $16.44/month until month #67 (final payment). |
| #4: Card 3 | 16.90% | 77 months(6 years 5 months) | $4483.99 | $11483.99 | Pay $150.00/month until month #76,Then Pay $83.99/month until month #77 (final payment). |
References
This calculator is based on established financial principles and formulas. For additional information on debt management and financial planning, consult these authoritative sources:
- Consumer Financial Protection Bureau (CFPB) - Best Strategies for Paying Off Credit Card Debt
- Federal Trade Commission - Paying Off Credit Card Debt
- U.S. Government Accountability Office - Credit Cards: Increased Complexity in Rates and Fees
- Federal Reserve - Credit Card Interest Rates and Consumer Behavior
- MyMoney.gov - Managing Debt (Official U.S. Government financial education website)
- FINRA Investor Education Foundation - Understanding Debt and Credit
Mathematical formulas used in this calculator are based on standard compound interest calculations as defined by financial institutions and regulatory agencies.
FAQ
Q: What's the Difference Between Debt Avalanche and Debt Snowball?
A: The avalanche method prioritizes highest interest rates (saves more money), while the snowball method prioritizes smallest balances first (provides psychological wins).
Q: Should I Use Avalanche or Snowball Method?
A: Choose avalanche if you want to minimize total interest paid. Choose snowball if you need motivation from quick wins.
Q: Can I Change My Payment Amounts During the Plan?
A: Yes! Life circumstances change. Recalculate whenever your budget or card terms change.
Q: What if I Can'T Afford the Minimum Payments?
A: Contact your credit card companies immediately to discuss hardship programs, or consult a nonprofit credit counseling agency.
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