Debt payoff
Debt Payoff Example for Three Credit Cards
Turn three balances into a single payoff order and see why the extra payment needs a defined target.
Decision summary
The decision this example tests
How do you pay off three credit cards with one extra monthly payment?
With $350 extra after protected minimums, avalanche targets Card A first and models payoff in 1 yr 7 mo with $1,908 interest. Snowball targets Card C first and models 1 yr 7 mo and $2,037 interest.
Specific money question
How do you pay off three credit cards with one extra monthly payment?
Inputs used
- Card A: $3,200 balance, 24.9% APR, $96 minimum
- Card B: $4,800 balance, 21.5% APR, $144 minimum
- Card C: $2,500 balance, 18.9% APR, $75 minimum
- Extra payment available: $350 per month
- New purchases: none during the payoff plan
Engine-generated result
Source: calculateDebtPayoff
With $350 extra after protected minimums, avalanche targets Card A first and models payoff in 1 yr 7 mo with $1,908 interest. Snowball targets Card C first and models 1 yr 7 mo and $2,037 interest.
- Avalanche first target
- Card A
- Avalanche payoff
- 1 yr 7 mo
- Avalanche interest
- $1,908
- Snowball first target
- Card C
- Snowball payoff
- 1 yr 7 mo
1 yr 7 mo
Tradeoff to watch
What can change the answer
This scenario is most useful when you adjust one assumption at a time in the related calculator. The comparison cards below show which version of the decision deserves a second pass.
Step-by-step interpretation
- List every card with balance, APR, and minimum payment. A payoff plan is only as reliable as the inputs.
- Keep paying every minimum first so no account falls behind.
- Send the full extra payment to one target card. For interest savings, target the highest APR first.
- When the first card is paid off, roll its minimum and the extra payment into the next target instead of letting the cash disappear into the budget.
Scenario comparison
Avalanche order
Targets the highest APR first. In this example, that means Card A, then Card B, then Card C.
Even split
Feels balanced, but it slows the first payoff milestone and can leave high-rate debt outstanding longer.
Common mistakes
- Adding new purchases while using payoff estimates based on shrinking balances.
- Splitting extra cash across every account without a payoff priority.
- Missing minimum payments while trying to accelerate one card.
Disclaimer
This scenario is for education and planning only. It does not provide personalized financial, tax, legal, credit, mortgage, or investment advice. Real outcomes can differ because rates, fees, taxes, insurance, lender rules, market returns, and household circumstances vary. Read the full financial disclaimer.
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