- Debt Avalanche
- Paying highest interest rate first. Minimizes total interest paid — the mathematically optimal approach.
- Debt Snowball
- Paying smallest balance first. Provides quick psychological wins; usually costs more in total interest.
- Debt Cascade
- When a debt is eliminated, its payment is redirected to the next priority debt, accelerating payoff speed.
- Minimum Payment
- The smallest required monthly payment. Paying only the minimum maximizes interest costs and extends payoff dramatically.
- APR
- Annual Percentage Rate — the yearly interest rate on outstanding balances. Credit cards typically range 15–30% APR.
- Extra Payment
- Any amount above the minimum. Extra payments go entirely to principal, directly reducing future interest charges.
- Principal
- The original balance owed before interest. Each payment covers interest first, then reduces principal.
- Payoff Date
- The month and year when a debt reaches zero balance, calculated from your current payment plan.