Debt snowball vs. avalanche: which payoff method wins?

Key takeaways

• Both methods require paying the minimum on every debt and putting any extra money toward one target debt.
• Avalanche: target the highest interest rate first to pay the least interest overall.
• Snowball: target the smallest balance first for quick wins that keep you motivated.

How the debt avalanche works

List your debts from the highest interest rate to the lowest. Pay the minimum on all of them and send every extra dollar to the highest-rate debt. When it’s paid off, roll its payment into the next debt on the list. Mathematically, this minimizes total interest.

How the debt snowball works

List your debts from the smallest balance to the largest, regardless of rate. Attack the smallest first while paying minimums on the rest. Each paid-off account frees up money and delivers a quick win, which many people find motivating.

A side-by-side example

Seeing both orders side by side makes the trade-off clear.

Which should you choose?

The right method is the one that keeps you paying.

• Choose the avalanche if you’re motivated by numbers and want to pay the least interest.
• Choose the snowball if you’ve struggled to stick with plans and need early wins.
• If two debts have similar rates, start with the smaller balance to get both benefits.

Speed up either plan

A few changes can shave months off your timeline.

• Stop adding new charges to cards you’re paying off.
• Ask your card issuers for a lower rate.
• Consider a 0% balance transfer or a lower-rate consolidation loan, and watch for fees.
• Put windfalls toward your target debt.

The bottom line

The best payoff method is the one you’ll stick with. Pick one, automate your payments and keep rolling each freed-up payment into the next debt until you’re done.

Frequently asked questions