Both methods start the same way
Pay the minimum on every debt, then put everything extra you can afford towards one target debt. When it is paid off, add its payment to the next target, so the amount you throw at debt grows as each one disappears. The two methods differ only in the order.
Avalanche: highest interest rate first
Target the debt with the highest interest rate. This always costs the least interest overall and usually makes you debt free soonest. It is the choice on the numbers alone.
Snowball: smallest balance first
Target the smallest balance, whatever its rate. You clear the first debt quickly, which gives a sense of progress and fewer bills to track. The cost is some extra interest, which is small when the rates are similar and larger when a big balance carries a high rate.
Which to choose
The method you stick with beats the one you give up on. If you need early wins to keep going, snowball. If you are motivated by the total saved, avalanche. Either one is far better than paying only the minimums, which can take decades on a credit card.
Compare them with your debts
Enter your balances, rates and minimums in the Debt Snowball vs Avalanche Calculator to see the months to debt free, the total interest and the payoff order for both. For a single card, the Credit Card Payoff Calculator shows how long a fixed payment takes.
A worked example
Three debts with 650 a month to spend on them, the minimums plus 300 extra:
| Debt | Balance | Rate | Minimum |
|---|---|---|---|
| Personal loan | 1,500 | 6% | 50 |
| Store card | 4,000 | 15% | 100 |
| Credit card | 8,000 | 24% | 200 |
- Snowball pays the 1,500 loan first, then the store card, then the credit card: 27 months and about 3,605 in interest.
- Avalanche pays the 24% credit card first: 26 months and about 2,824 in interest.
Here the avalanche saves about 780 and a month, because the biggest balance also has the highest rate. When the smallest debt also has the highest rate, both methods pick the same order.
Ways to speed up either method
- A balance transfer to a card with a low or zero introductory rate can stop interest for a while. Check the transfer fee and the rate after the offer ends.
- Windfalls such as a tax refund or bonus go straight to the target debt.
- Stop adding new debt. Leave the paid-off cards unused, or the plan never finishes.