Debt avalanche vs snowball: which is better?
Both methods work. The avalanche saves more money, the snowball gives faster wins. Here's a real side-by-side example so you can pick.
The two methods in one sentence each
- Debt avalanche: pay the minimum on everything, then put every extra dollar toward the debt with the highest interest rate.
- Debt snowball: pay the minimum on everything, then put every extra dollar toward the debt with the smallest balance.
In both, when a debt is paid off, its whole payment rolls into the next one. That rolling payment is what makes both methods speed up over time.
A real example
Here's a household with four debts and $250 a month extra on top of the minimums:
| Debt | Balance | Interest rate | Minimum |
|---|---|---|---|
| Store card | $900 | 28.99% | $35 |
| Credit card | $4,800 | 23.99% | $120 |
| Car loan | $9,500 | 6.9% | $285 |
| Personal loan | $3,200 | 11.99% | $110 |
| Method | Debt-free in | Total interest | Payoff order |
|---|---|---|---|
| Avalanche | 27 months | $2,469 | Store card (month 4), then Credit card (month 17), then Personal loan (month 21), then Car loan (month 27) |
| Snowball | 27 months | $2,752 | Store card (month 4), then Personal loan (month 12), then Credit card (month 21), then Car loan (month 27) |
In this example the avalanche saves about $283 in interest, and both finish in the same month. The snowball pays off the personal loan first, a whole debt gone 9 months earlier, which is the kind of quick win that keeps many people going.
Which one should you choose?
Choose the avalanche if you're motivated by the numbers and your highest-rate debt isn't enormous. It always costs the least in interest.
Choose the snowball if you've tried to pay off debt before and lost steam. Clearing whole debts early can be the difference between finishing and quitting, and the extra interest is often smaller than people expect.
The worst choice is neither. Either method beats paying only the minimums. Try your own debts in the debt payoff calculator, or compare both plans side by side with compare two plans.
Tips that work with either method
- Keep a small emergency fund so a surprise bill doesn't undo your progress.
- Stop adding new debt while you pay down the old.
- Call your card company and ask for a lower rate. It doesn't always work, but it costs nothing to ask.
- Consider a 0% balance transfer only if you can pay it off before the promo ends, and count the transfer fee.
For education only, not financial advice. Figures are examples; your situation may differ.