Our household has two credit cards and w
Ask
Our household has two credit cards and we have an extra $350 per month to put toward debt:
- Card A: $4,200 balance, 23.9% AP, minimum payment $110.
- Card B: $1,100 balance, 17.5% AP, minimum payment $35.
Total monthly repayment budget is $495 ($145 minimums + $350 extra).
Our rent, utilities, food, and survival medicine are fully covered with no gap.
Can you run the exact payoff comparison between Avalanche and Snowball?
Please show:
1. The months to debt freedom and total interest paid under each strategy.
2. Which card the extra money goes to first under each approach.
3. The structural trade-off between the two methods without telling us which one to choose.
Answer
Housing, utilities, food, and survival medicine are all covered with no gap, so this is a debt comparison, not a cash-shortage question. Both routes below are monthly-compounding models from this turn's script, not a prediction.
| Strategy | Extra hits first | Months to debt-free | Total interest (USD) |
| --- | --- | --- | --- |
| Avalanche | Card A (23.9% AP) | 13 | 650.22 |
| Snowball | Card B ($1,100 balance) | 13 | 706.19 |
**What each route does**
- **Avalanche** sends the $350 extra to Card A first. Card A clears in 11 months; Card B follows in month 13. The higher AP is paid down faster, which is why the interest total is lower.
- **Snowball** sends the $350 extra to Card B first. Card B clears in 3 months (last payment 361.90 on Card B), then the full $495 budget rolls onto Card A until month 13. One balance disappears quickly; Card A runs longer at 23.9%.
**Structural trade-off**
The two routes finish in the same 13 months, but the math differs by **55.97 USD** in interest (706.19 − 650.22) in favor of Avalanche. The trade-off is the *order of work*, not the calendar:
- Avalanche buys **less total interest** by targeting the higher AP first; the visible win is on the spreadsheet, and both cards are still open most of the year.
- Snowball buys **a closed card in 3 months** by targeting the smaller balance first; the visible win is a real statement showing $0 owed, while Card A keeps accruing at 23.9% until month 13.
The choice is which kind of progress you want to see each month — the cheaper total cost, or the earlier cleared balance.