Pay off debt5 min read
A $5,000 credit card balance at 22% can cost you thousands in interest. See how interest works against you.
Debt is borrowing from your future self — and your future self pays interest. A $5,000 credit card balance at 22% APR, paying $200 a month, takes about 3 years and costs roughly $1,800 in interest. That is money that could have been savings.
Minimum payments are designed to keep you in debt. On many cards, paying only the minimum can stretch a balance across decades. Always pay more than the minimum, even a little.
Two payoff orders both work. The avalanche pays the highest interest rate first — cheapest overall. The snowball pays the smallest balance first — fastest wins, which keeps many people going. Pick the one you will actually stick with.
While paying down, stop adding new charges where you can. A balance that keeps growing never shrinks, no matter how good the plan is.
Your next move
Run the Credit card payoff tool with your balance and rate.