The Two Methods
Both methods share the same core mechanic: pay minimums on all debts, then throw every extra dollar at one target debt until it's gone, then roll that payment into the next. The only difference is which debt you target first.
The Debt Avalanche
Target the debt with the highest interest rate first, regardless of balance size. Once it's eliminated, redirect that freed-up payment to the next highest rate.
The math wins: The avalanche minimizes total interest paid over the life of your debt. For $20,000 in mixed debt, this can save hundreds to thousands of dollars versus other approaches.
Best for: People motivated by data who can stay the course without needing quick early wins.
The Debt Snowball
Target the debt with the smallest balance first, regardless of interest rate. Pay it off completely, then roll that payment to the next smallest balance.
The psychology wins: Eliminating a debt entirely — even a small one — creates momentum. Research in behavioral economics shows these early wins help people stick with their payoff plan long-term.
Best for: People who've struggled to maintain momentum on debt payoff before, or who have many small accounts to consolidate.
Which Should You Choose?
If your interest rates are similar across debts, the methods produce nearly identical results — choose snowball for the motivational boost. If you have one high-rate debt (above 20% APR), avalanche it first: the interest savings are too significant to ignore.
- Similar rates across debts? → Snowball
- One very high APR debt? → Avalanche
- Struggled with motivation before? → Snowball, always
Hybrid approach: Clear a few tiny balances first to simplify, then avalanche the high-rate debt. The best method is the one you'll actually follow through on.
Getting Started
- List every debt with its balance, minimum payment, and interest rate.
- Choose your method and identify your first target debt.
- Find extra money in your budget — even $50/month accelerates payoff meaningfully.
- Pay minimums everywhere else and throw everything extra at the target.
- Celebrate each payoff, then immediately redirect that payment to the next debt.