Compare the snowball method vs avalanche method and see how fast you can become debt-free
Popularized by Dave Ramsey, the debt snowball method means you list all your debts from smallest balance to largest. You pay the minimum on everything, then throw every extra dollar at the smallest balance first. Once that's gone, you roll that payment into the next-smallest debt. It's a behavioral strategy — you get quick wins that keep you motivated. Mathematically it's not optimal, but psychologically it works because people actually stick with it.
The avalanche method targets the highest APR debt first instead of the smallest balance. Mathematically, avalanche always saves you more money — it's impossible for snowball to win on pure math. But studies show snowball borrowers actually stay on track longer because the quick wins build momentum. Ramsey's argument is simple: if the mathematically optimal method makes people quit, then the "suboptimal" method that people stick with is actually better in the real world.
It depends on you. If you're disciplined and motivated by numbers, avalanche saves you more money. If you've tried and failed to pay off debt before, snowball might work better because the small wins keep you going. A hybrid approach also works: knock out one or two tiny balances fast for momentum, then switch to avalanche for the rest. The best method is the one you'll actually follow through on.
Whatever you can — even $50 a month makes a difference. But the bigger driver is whether you're creating new debt while you pay off old debt. If you're running a balance on credit cards while trying to pay them off, you're treading water. The key first step: stop using credit cards. Use cash or a debit card until you're debt-free. The extra $300 a month should come from cutting expenses or increasing income, not from new debt.
If you have good credit, a 0% APR balance transfer card can buy you 12-18 months where every payment goes to principal. That can be a huge shortcut. But watch out: most cards charge a 3-5% balance transfer fee, and the 0% rate jumps to 20%+ after the intro period. Only do this if you can actually pay off the balance before the intro period ends. And don't run up the old card again — that's how people end up deeper in debt.
A personal loan to consolidate high-interest credit cards can work if you get a lower rate. But again, the behavioral problem remains: if you pay off your credit cards with a consolidation loan and then run them back up, you're now in debt for both the consolidation loan and the cards. Consolidation is a tool, not a fix. The fix is changing the spending habits that got you into debt in the first place.
Disclaimer: This calculator is for educational purposes only. The snowball method is a popular strategy, not a mathematically optimal one. Not professional financial advice. Consider working with a non-profit credit counselor (NFCC) if you're struggling with debt.