Calculate exactly when you’ll be debt-free. Compare avalanche vs snowball methods and see how extra monthly payments slash your payoff time and total interest.
Avalanche: Pay minimums on all debts, throw extra at the highest interest rate first. Mathematically optimal — saves the most money. Snowball: Pay off smallest balance first regardless of rate. Psychologically powerful — early wins build momentum. Both work; choose the one you’ll actually stick to.
An extra $200/month on 18% APR debt saves dramatically more than investing that $200 at 7% returns. Pay high-interest debt first, always.
US average credit card rate: 24%+. At 24% APR, a $10,000 balance paying only minimums takes 30+ years and costs $20,000+ in interest alone.
0% APR balance transfer cards (12–21 months) can dramatically reduce interest during payoff. Factor in the 3–5% transfer fee vs interest savings.
Once debt-free, redirect all former debt payments into investing. If you were paying $700/month on debt, you now have $700/month to compound at 7%.