How this number is made
Avalanche puts every extra dollar on the higher rate. Snowball puts it on the smaller balance. With two debts the interest gap is usually modest, and the avalanche wins on interest whenever the rates differ. The snowball wins only on the feeling of finishing an account. Minimums are paid on both the whole time. This is two debts, not a full list.
- Each minimum has to cover that debt’s interest. If it does not, the page will say the payment is too small.
- The extra is on top of both minimums.
Formula
Each month both debts accrue interest and pay their minimum. The extra, plus any minimum freed by a finished debt, goes to the higher rate or to the smaller remaining balance.
Worked example
With the figures already in the form, interest the avalanche saves is $837.
Questions
Why only two debts?
So the comparison stays something you can check. A longer list is the same rule repeated.
Does finishing a card help my credit?
This page does not know your credit. It knows the interest.