I have two credit cards and $250 extra t
For reference only. Not investment advice.
Question
I have two credit cards and $250 extra this month (so $420 total monthly budget for debt payments).
- Card 1: $4,000 balance at 24.5% AP (minimum payment $120/month).
- Card 2: $1,500 balance at 16% AP (minimum payment $50/month).
ent, utilities, medicine, and food are already completely covered.
Should I put the extra $250 toward Card 1 or Card 2? What are the payoff times and total interest under Avalanche vs Snowball?
Answer
ent, utilities, medicine, and food are already covered, so this is a repayment comparison, not a crisis ladder.
With $420/month total ($120 + $50 minimums + $250 extra), both routes clear the cards in 16 months, so the difference is total interest paid.
| Strategy | Extra goes first | Months to clear both | Total interest (USD) | First balance cleared |
|---|---|---|---|---|
| Avalanche | Card 1 (24.5% AP) | 16 | 810.45 | Card 1 at month 13 |
| Snowball | Card 2 (16% AP) | 16 | 921.93 | Card 2 at month 6 |
Source: this turn's `payoff.py` ok:true stdout, monthly compounding model — not a prediction.
Avalanche saves about $111.48 in interest by keeping the extra on the higher-AP Card 1; Snowball clears a balance 7 months sooner (Card 2 gone by month 6), which can free up the $50 minimum to roll into Card 1 from month 7 onward.
I will not pick for you. Choose between saving interest (Avalanche) and clearing a balance first (Snowball).