How this is worked out
Two schedules are calculated month by month, because neither has a closed-form answer.
The minimum-payment schedule recomputes the payment every month as the greater of the issuer's dollar floor and a percentage of the current balance, plus that month's interest. Because the balance shrinks, the payment shrinks with it, and each smaller payment clears less principal than the last. That is the trap, and it is arithmetic rather than opinion.
Two conventions exist for the minimum and the difference is not cosmetic. A minimum of "a percentage of the balance plus that month's interest" always reduces the balance. A flat percentage of the balance may not: at a 20–25% APR, 2% of the balance is barely above the month's interest, so the balance decays so slowly that the payoff runs past this calculator's sixty-year horizon. The calculator says which of the two has happened rather than reporting both as failure.
The fixed-payment schedule holds the payment constant. Interest for the month is balance × APR ÷ 12; everything above that reduces the principal. As the balance falls the interest falls, so a constant payment clears an accelerating share of principal — the exact opposite of the minimum.
For several debts, both avalanche and snowball are simulated in full. Every debt receives its minimum each month; whatever is left of your budget goes entirely to one target — the highest rate under avalanche, the smallest balance under snowball. When that debt clears, its payment rolls onto the next.
A worked example
- Balance / APR
- $6,000 at 24.9%
- Minimum payment rule
- 1% of balance plus interest, $25 floor
- First minimum payment
- $184.50
- Minimum only — time to clear
- 21 years 2 months
- Minimum only — interest paid
- $11,317
- Fixed $300 a month — time
- 27 months
- Fixed $300 a month — interest
- $1,832
The minimum payment is designed to shrink
This is the single most important thing to understand about a credit card, and it is invisible unless someone shows you the schedule. Your minimum is a percentage of what you owe. As you pay it down, the percentage is taken of a smaller number, so the payment falls. Each smaller payment covers the interest first and clears a little less principal than the one before.
The result is a curve that flattens rather than a line that ends. On $6,000 at 24.9% with a minimum of 1% of the balance plus interest, the first payment is $184.50 — of which $124.50 is interest and $60 touches the balance. Twenty-one years and $11,317 in interest later, it finally clears.
The same $6,000 at a fixed $300 a month is gone in twenty-seven months for $1,832. The difference is not what you can afford; the first payment is only $115 higher. The difference is that one number stays still and the other retreats.
A card that instead charges a flat percentage with no interest added is worse again. At a flat 2% of the balance, $120 barely exceeds the $124.50 of interest, and the balance is still falling sixty years later — which is why the calculator refuses to print a payoff date for it.
The CARD Act box on your statement says this too
Since the Credit CARD Act of 2009, every statement must show how long the balance will take to clear on minimum payments and what it will cost, alongside the payment that would clear it in three years. It is a small box and almost nobody reads it.
The Act also stopped several of the practices that made the trap worse. Payments above the minimum must be applied to the highest-rate balance first, so a cash advance at 29.9% is cleared before a purchase balance at 19.9%. Rates on existing balances generally cannot be raised in the first year, and cardholders under 21 need income or a co-signer.
What it did not do is change the arithmetic of the minimum itself. Compare the box on your statement with the figures above — they should broadly agree, and if yours is worse it is because your APR or your minimum formula differs from the defaults here.
Avalanche costs less; snowball gets finished
With several debts, avalanche targets the highest interest rate and always costs less in total interest — this is not a matter of preference, it falls straight out of the arithmetic. Snowball targets the smallest balance and clears an individual debt sooner, which is the only reason anyone sticks with it.
The calculator runs both and shows the actual gap for your numbers rather than asserting a winner. On a typical three-debt mix the difference is a few hundred dollars, and snowball usually clears its first debt within a few months against a year or more for avalanche.
A few hundred dollars is worth having. A plan you abandon in month four is worth nothing. If the rates are close together, take snowball and the momentum. If one debt is at 29.9% and the others are at 7%, take avalanche — the gap is too large to give away for a psychological win.
Balance transfers, and the two ways they go wrong
A 0% balance transfer offer genuinely helps, because every dollar goes to principal for the promotional period. Expect a transfer fee of 3% to 5% upfront, which is worth paying if the promotional period is long enough — 3% on $6,000 is $180 against roughly $1,500 a year in interest at 24.9%.
The first way it goes wrong is arithmetic: not dividing the balance by the number of promotional months and paying that much. Reaching the end of a 18-month 0% period with most of the balance intact simply moves the problem, minus the fee.
The second is behavioural: using the newly empty original card. Roughly half the people who transfer a balance carry a balance on the old card within a year, and now there are two. If that is a real risk, the answer is to close the old account or physically remove it, not to promise yourself you will not.
If the balance is large relative to your income and no realistic payment clears it, the tool you need is not a calculator. The National Foundation for Credit Counseling and the Financial Counseling Association of America are non-profit and their member agencies offer free or low-cost advice. Anything charging a large upfront fee to negotiate on your behalf is a different kind of business.
Assumptions and sources
- Payoff schedules
- Both schedules walked month by month. Verified in tools/test/finance.mjs against independently calculated payoff tables.
- Minimum payment formula
- You supply the percentage and floor. US issuers commonly use 1–3% of the balance plus interest and fees, floor around $25–$35 — check your cardholder agreement.
- CARD Act disclosures
- Credit CARD Act of 2009 — minimum payment warning box, payment allocation to highest-rate balances, restrictions on rate increases. checked 2026-08
- Avalanche vs snowball
- Both simulated in full with minimums paid on every debt and surplus applied to a single target. Avalanche is always cheaper in interest; the calculator reports the size of the gap.