Snowball Calculator
Do you carry a balance on more than one credit card? This calculator will show you how to apportion your payments to each card. You will get out of debt sooner and minimize the amount of interest that you pay.
Think of interest rates as the cost of borrowing money over time. It makes the most sense intuitively to pay off the most expensive card, or highest-rate, first. If you carry balances on more than one credit card, you should pay the minimums on every card, except the card with the highest interest rate. You should focus your extra payments on the card with the highest interest rate. Once you completely pay off your highest rate card, you redirect the extra payment to the card with the next highest interest rate, and so on. As you pay off your cards, your payment to the highest rate card builds up, or "snowballs," until you send the entire monthly payment to the last card remaining.
Let's say you have three credit cards: Card A with a $5,000 balance at 20%, Card B with $15,000 balance at 10%, and Card C with a $10,000 balance at 5%. Let's also say that you have $1,000 a month you can use to pay off your debts. You pay the minimum amount due for Cards B & C, which is $300 and $200 respectively. You pay the remaining $500 to Card A, because it has the highest interest rate. Once you pay off Card A, you redirect the extra money to Card B, which has the next highest interest rate. Now you pay the minimum for Card C and the rest of the $1,000 to Card B. When you pay off Card B, you send the entire $1,000 to Card C. If that doesn't make any sense, just play with the calculator to see what I mean! :)
Alright, let's get started! Before you begin, make sure you have the most recent credit card statement for each of your credit cards nearby. Once you have your statements ready, please select the number of credit cards that you would like to analyze:
You may also be interested in trying some of our other free online financial calculators.
NOTE: We try our best to ensure accuracy. However it's a fact of life with any computer program that bugs and errors pop up from time to time. We do not warrant the accuracy of these calculators. These calculators are for educational use only.
