Quick Answer: Build a payoff schedule for multiple credit cards using a fixed monthly budget and either the debt avalanche or debt snowball method.
How This Calculator Works
This calculator models several credit-card balances at once. It applies monthly interest, covers each card's minimum payment, then sends the remaining budget to the selected priority card until all balances are paid.
Worked Scenario: Scenario: Paying Down Multiple Credit Cards
A household sets aside $500 per month for three credit cards with different balances, minimum payments, and APRs.
Scenario Inputs
- Monthly budget: $500
- Strategy: Debt avalanche
- Credit cards: 3 cards with separate balances and APRs
Outcome: The calculator estimates the payoff time, total interest, payoff order, and the interest saved compared with paying only minimums.
Formula and Methodology
Monthly interest = Balance * APR / 12
Minimum payments are applied to every active card
Extra budget is applied to the highest APR card for avalanche or smallest balance for snowball
Payoff continues until every balance reaches zero
Variables
- APR: The annual percentage rate entered for each credit card
- Monthly budget: The total amount available each month for all credit-card payments
- Minimum payment: The required monthly payment for each card before extra budget is assigned
Assumptions
- APR remains constant throughout the payoff period.
- No new purchases, fees, balance transfers, or promotional-rate changes are added.
- When a card is paid off, the same total budget can be redirected to the remaining cards.
Limitations
- Actual issuers may calculate minimum payments using formulas that change as balances decline.
- Daily balance interest, late fees, annual fees, and promotional APR expiration dates are not modeled.
- If the entered monthly budget is below required minimums, the calculator uses the minimum-payment total and flags the shortfall.
Practical FAQs
What is the debt avalanche method?
The debt avalanche method pays minimums on every card, then puts extra money toward the highest APR balance first. It usually minimizes total interest.
What is the debt snowball method?
The debt snowball method pays minimums on every card, then puts extra money toward the smallest balance first. It can produce quicker early payoffs.
Should the monthly budget include minimum payments?
Yes. Enter the total monthly amount available for all card payments, including required minimums and any extra payoff amount.