Calculator
Credit Cards Payoff Calculator
Credit Cards Payoff Calculator
Covers all minimums plus the rolled-over attack amount. Minimums are modeled at 2% of each balance ($25 floor).
Debt-Free Timeline
1 yr 9 mo
Payoff Analysis
With a $900 monthly budget, the avalanche (highest APR first) strategy clears all 3 debts in 1 yr 9 mo, paying $2,240.61 in interest along the way. That is $104,779.04 cheaper than making only minimum payments, which would drag on ~Never. The avalanche is the mathematically cheapest path — every dollar of saved interest is a dollar freed up to invest.
*Assumes fixed balances, constant purchase rates, and minimum payments modelled at 2% of each balance with a $25 floor. No new borrowing is modelled. Educational only, not financial advice.
The Payoff Order Problem
Australian credit card balances have climbed to record highs while the big four banks' purchase rates sit in the high teens to low twenties — yet the hardest question most indebted households face is not how much to pay but who to pay first. The two dominant systems answer that question with opposite logic. The debt snowball pays debts from smallest balance to largest, banking quick wins for motivation. The debt avalanche pays from highest interest rate to lowest and is provably the cheapest path mathematically. Both methods share one mechanism that changes everything: debt rollover. When a balance hits zero, its minimum payment plus the extra attack amount rolls onto the next target, so each payoff frees more firepower than the last — the snowball effect that gives the method its name. Run without rollover (minimums only), the same debts can grind on for years and double in interest cost. This calculator simulates your exact debt list month by month under either strategy, shows the total interest difference between them, and quantifies what paying only minimums would have cost — the number that turns debt payoff from a chore into a race towards your super and investment plan.
Month-by-Month Simulation with Roll-Over
Each simulated month runs in two passes. First, interest accrues on every open balance (balance × purchase rate ÷ 12) and is added to principal, then minimum payments are applied — modelled as 2% of each balance with a $25 floor, matching the typical Australian card formula. Second, whatever budget remains — the attack amount — goes to the target chosen by your strategy: the highest-rate debt under the avalanche method, or the smallest remaining balance under the snowball method. When a balance reaches zero, two things happen that accelerate everything: its minimum payment is freed, and the freed payment merges with the attack amount against the next target. This rollover is why payoff timelines bend sharply — late debts fall disproportionately fast. The tool also runs a parallel minimums-only simulation to produce the baseline interest cost; the difference is what your deliberate plan saves. Avalanche provably minimises total interest (attacking the highest rate kills the most accruing interest per dollar), while snowball minimises time-to-first-win — a behavioural advantage that, in studies of real repayment behaviour, sometimes makes it the method people actually finish.
Expert Insights
Avalanche Wins the Maths, Snowball Wins the Psychology
On identical debts, avalanche always pays equal or less total interest — the gap widens when rate differences are large (a 21% card versus an 11% personal loan). But research has found that debtors who pay smallest balances first are more likely to pay off everything, because closing an account feels like progress. Pick avalanche if you are data-driven and patient; pick snowball if you need momentum. The worst method is the optimal one you abandon.
Never Pause the Minimums While Attacking
The strategy is: minimums on every debt, every month, plus the entire surplus against one target. Skipping minimums on the non-target debts to turbo-charge one payoff invites late fees, penalty rates (Australian cards can jump to punitive enforcement rates), and credit report damage under CCR that costs more than the interest saved. Discipline means the attack amount comes from the surplus, not from neglecting the rest of the list.
Fix the Rate Before You Rework the Order
No payoff ordering beats a structural rate fix. A balance transfer to a 0% promo window of 12–36 months (common on Australian cards) converts a 20% card into a pure principal race; a consolidation personal loan at 10–12% can halve the blended rate on mixed debt. Do the rate surgery first (mind the 1–3% transfer fees and the promo deadline), then run the snowball or avalanche on the new, cheaper list. Calling your current bank to negotiate a rate reduction works far more often than people expect.
Actionable Tips
- 1
List Every Debt in One Ugly Table
Pull every balance and purchase rate from statements — cards, personal loans, Afterpay balances treated as debt if you pay interest, even the HECS balance you keep mentally separate (indexation aside, HECS is 0% and belongs last in any avalanche). Enter them here exactly. Debt plans fail most often because of the debts people pretend do not count. Seeing the full total, once, in one place, is the moment the problem becomes a solvable arithmetic exercise instead of a vague anxiety.
- 2
Automate One Payment Date for the Attack Budget
Set up a single autopay for your full monthly budget shortly after pay day — before the money touches discretionary accounts. The simulation's timeline only becomes real when the budget arrives automatically; manual transfers fail exactly when motivation dips. Pair it with a calendar reminder to redirect the minimum when each debt closes, so the rollover happens on purpose rather than being accidentally spent.
- 3
Send Every Windfall to the Target Debt
Tax refunds, bonuses, and selling stuff are lump-sum principal payments, and they compress timelines more than any budget tweak. A $2,000 lump payment on a 20% card erases roughly the same amount of future interest as months of grind — and at Australia's highest marginal rates it has already survived the taxman, making it extra-valuable. Route at least half of every windfall to the current target, keep the monthly plan untouched, and watch the payoff date jump backwards by months for free.
Real-World Examples
The Snowball Got Alicia Across the Finish Line
Alicia owed on four cards, the smallest just $900. Her spreadsheet-loving partner built an avalanche plan; she lasted six weeks before the zero progress on the big 21% card demoralised her. They switched to snowball: the $900 card died in six weeks, then its payment rolled forward. Each closure funded the next, faster. Twenty-two months later all four were paid — about $400 more interest than the avalanche would have cost, but a plan that actually finished, which beats a perfect plan that did not.
Omar's Avalanche Saved $6,100 — and His Sanity
Omar and his wife argued about money nightly: $31,000 across cards and a personal loan, rates from 9% to 21%. They agreed to one rule from this tool — minimums everywhere, all surplus to the 21% card first. The avalanche chewed through $11,400 of high-rate debt in year one, and the arguments stopped because the plan was visible and mechanical. Total interest: $7,300 versus the $13,400 the minimums-only run projected. 'We did not get richer,' Omar said. 'We just stopped paying the stupid tax.'
Minimum-Payment Linda Saw the Number That Changed Her Plan
Linda, 34, had paid minimums faithfully on $9,200 of cards for three years and still owed $8,400. The tool showed her trajectory: at minimums, debt-free in 9 years with $6,800 of interest — effectively buying nothing. She set a fixed $600 budget, attacked the highest purchase rate, and finished in 19 months paying $1,600 of interest. The $5,200 difference became her first extra super contribution schedule. The minimums had never been a plan; they had been the lender's plan.
Glossary of Terms
- Debt Snowball
- A payoff order that targets the smallest balance first while paying minimums on everything else; each cleared balance rolls its payment into the next target. Optimised for motivation and visible progress.
- Debt Avalanche
- A payoff order that targets the highest interest rate first while paying minimums elsewhere. It is mathematically guaranteed to minimise total interest paid for a given monthly budget.
- Payment Rollover
- The mechanism where a paid-off debt's minimum payment is redirected to the next target, so the attack amount grows with every closure — the snowball effect that accelerates the payoff curve.
Frequently Asked Questions
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Ivy Sinclair-Wren
Financial Chaos Analyst
Ivy Sinclair-Wren is a Financial Chaos Analyst covering investing, AI, wealth psychology, and the emotional consequences of opening finance apps during market crashes. Based in Melbourne, she specializes in demystifying the Australian tax code and helping users navigate the intersection of spreadsheet logic and human irrationality.