Debt Payoff Calculator

The Real Cost of Minimum Payments

Credit card companies set your minimum payment low on purpose. The lower your minimum, the longer you stay in debt, and the more interest you pay. A $10,000 balance at 20% interest with $200/month minimum payments takes nearly 9 years to clear and costs you over $8,000 in interest on top of what you borrowed.

That same $10,000, attacked with $300/month, is gone in under 4 years and costs you less than $3,000 in interest. An extra $100 per month saves you $5,000 and 5 years. That's the calculator showing you the truth that the credit card company hopes you never sit down to figure out.

The Snowball Method and Why It Works

The debt snowball works by attacking your smallest balance first, regardless of interest rate, while paying minimums on everything else. Once the smallest debt is gone, you roll that payment into the next smallest. The payments get bigger, the balances fall faster, and you get psychological momentum with each account you close.

From a pure math standpoint, targeting the highest interest rate first (the avalanche method) saves slightly more money. But in practice, the snowball wins because people actually stick to it. Progress is visible. Wins come faster. The behavior change matters more than the optimization. Most warehouse workers don't fail at debt payoff because they chose the wrong method. They fail because they lose momentum and quit.

One Number to Change Everything

You don't have to add $500 a month to make a serious dent. Even an extra $50 changes the outcome dramatically. Run the numbers in the calculator above with your actual balance and rate. Find the smallest extra amount that cuts your payoff time in half. That's the number to find room for in your budget this month.

If you want the full framework for attacking debt while capturing your 401k match at the same time, the debt snowball walkthrough breaks it down step by step. Debt payoff is Step 6 in the Logistics to Legacy framework. You don't do it in isolation. You do it while the employer match is already compounding.