Australian credit cards average around 19.99% APR. Enter your balances and monthly budget to see exactly how much interest each strategy costs — and when you'll be debt-free.
Take three common Australian debts: A$5,000 credit card at 19.99% APR (A$100 min), A$2,000 store card at 22% APR (A$40 min), and A$8,000 personal loan at 10% APR (A$165 min). With A$450/month and the avalanche method, you clear the 22% store card first — saving roughly A$280 in interest versus the snowball approach.
Both strategies start the same: pay the minimum on every debt each month. The difference is where any remaining budget goes.
Avalanche piles the surplus onto the highest-rate debt — typically a credit card or store card. Clearing these first minimises total interest paid.
Snowball piles the surplus onto the smallest balance. This builds momentum through quick wins, but if that small debt has a low rate, you leave expensive debt compounding.
Note that buy-now-pay-later (BNPL) products like Afterpay and Zip are not interest-bearing in the same way but charge late fees — model these as debts with a high effective APR if you're behind on payments.
For the full math and behavioral research, see our guide to the debt avalanche method.
Both methods pay minimums on all debts, then direct extra budget at one target. Snowball targets the smallest balance first; avalanche targets the highest APR first to minimise total interest.
Avalanche is always mathematically optimal — it minimises the rate at which interest accrues across your portfolio.
Research suggests many people stick better with the snowball because eliminating individual debts provides visible progress. Choose whichever method you'll actually follow through on.
Australian minimum payments are typically 2% of the closing balance or A$25. ASIC's MoneySmart shows that paying only the minimum on A$5,000 at 19.99% can take over 30 years. Even an extra A$50/month can cut years off the timeline.
Australian credit cards average around 19.99% APR. Rewards and platinum cards often charge 20–21.99%. Low-rate cards are available at 9–13% but may have annual fees. Always check your statement for the exact purchase rate.
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