When you carry several balances at once, the order you pay them off changes both how fast you become debt-free and how much interest you hand over along the way. The two most popular strategies are the debt avalanche and the debt snowball. Both tell you to make the minimum payment on every debt and throw every spare dollar at one target debt — they simply disagree about which debt to attack first.
The avalanche method: cheapest by the numbers
The avalanche method targets the debt with the highest interest rate first, regardless of its balance. Because you are always killing your most expensive debt, avalanche mathematically minimizes the total interest you pay and usually gets you out of debt a little sooner. It is the optimal choice on paper.
The snowball method: built for momentum
The snowball method targets the smallest balance first, ignoring interest rates. You clear individual debts faster, and each account you eliminate delivers a psychological win that keeps you motivated. Behavioral research has found that people who see quick wins are more likely to stick with a payoff plan — and a plan you actually finish beats an optimal plan you abandon.
A worked example
Say you have three debts: a $2,000 store card at 24%, a $6,000 credit card at 18%, and an $8,000 auto loan at 6%. You can afford $200 extra each month on top of the minimums. The avalanche method attacks the 24% store card first, then the 18% card, then the auto loan — paying the least total interest. The snowball method attacks the $2,000 store card first (it is both smallest and highest-rate here, so both agree), then the $6,000 card, then the auto loan. When your smallest balance is not your highest rate, the two methods diverge, and this calculator shows exactly how many months and how many dollars separate them so you can decide whether the interest savings are worth giving up the early wins.
Which should you choose?
- Choose avalanche if you are motivated by numbers and want to pay the least interest possible.
- Choose snowball if you have struggled to stay motivated and need visible progress to keep going.
- The gap between the two is often small — in many real cases the difference in total interest is modest, so momentum can be worth more than optimization.
- Whichever you pick, the extra payment amount matters far more than the ordering. Adding even $50–$100 a month dramatically shortens either plan.
- Avoid taking on new debt while paying off the old — a payoff plan only works if the balances actually shrink.