Build a debt payoff plan you can keep

Keep minimums and priorities separate

The highest-interest approach directs extra repayment toward the costliest rate while maintaining other required payments. The snowball approach targets the smallest balance first, which can provide a visible milestone. Compare the motivation and cost tradeoff before choosing.

Do not send every available dollar to one balance while ignoring another required payment or essential bill. If the full set of required payments does not fit your budget, that is a cash-flow problem to address before optimizing the order.

Compare your options, then revisit them

Our payoff tool starts with one balance and can compare several complete debts using fixed payments, extra payments, avalanche and snowball. Open each strategy for its monthly breakdown. It does not predict the issuer’s changing minimum payment or promotional periods. An optional velocity-banking comparison needs separate credit-line terms and cash-flow details.

Try a payment you can sustain during a difficult month as well as your planned amount. Keep a copy of the assumptions. Review new statements for rate changes, fees and additional borrowing rather than assuming the original timeline still applies.

• Use a current statement balance and the rate for each debt.
• Check whether fees or new purchases change the plan.
• When a balance is cleared, deliberately decide where its former payment goes.

Sources and method

• CFPB: Two approaches to reducing debt
• CFPB: Credit card resources

Worked examples use the stated hypothetical assumptions. Source links support the general definitions and rules; they do not verify a specific product, offer or individual outcome.