Debt Snowball vs Avalanche: Which Strategy Wins?

The Problem: Multiple Debts

You have $15,000 in credit card debt spread across three cards, plus a personal loan and student loans. Minimum payments total $450/month, but you want to pay it off faster. Where do you put your extra $300/month?

This is where snowball vs avalanche comes in. Both strategies have you pay minimums on all debts, then attack one debt at a time with extra payments. They differ in which debt to target first.

Debt Snowball Method

The debt snowball method, popularized by Dave Ramsey, has you pay off debts from smallest balance to largest, ignoring interest rates.

How It Works

1. List all debts by balance (smallest to largest)
2. Pay minimum on everything
3. Put all extra money toward the smallest debt
4. When that's paid off, roll that payment into the next smallest
5. Repeat until debt-free

Example

Pros

• Quick wins — Knock out small debts fast for motivation
• Psychological momentum — Seeing progress keeps you going
• Simplifies over time — Fewer bills to track as debts disappear
• Higher success rate — Studies show people are more likely to stick with it

Cons

• Costs more in interest — Not mathematically optimal
• Takes longer — May extend total payoff time

Debt Avalanche Method

The debt avalanche method has you pay off debts from highest interest rate to lowest, ignoring balance size.

How It Works

1. List all debts by interest rate (highest to lowest)
2. Pay minimum on everything
3. Put all extra money toward the highest-rate debt
4. When that's paid off, attack the next highest rate
5. Repeat until debt-free

Example (Same Debts, Different Order)

Pros

• Saves the most money — Mathematically optimal
• Fastest payoff — Minimizes total time in debt
• Logical approach — Makes financial sense

Cons

• Slower first win — May take months to pay off first debt
• Less motivating — Can feel like you're not making progress
• Harder to stick with — Some people quit without quick wins

Head-to-Head Comparison

Let's compare both methods on the same $15,300 in debt, with $500/month total payment.

The avalanche saves money, but the snowball gives you a quick win in 2 months vs. 12. That quick win can be the difference between sticking with it and giving up.

Which Should You Choose?

Choose Snowball If:

• You've tried paying off debt before and quit
• You're motivated by seeing progress quickly
• You have several small debts that could be knocked out fast
• You struggle with debt fatigue

Choose Avalanche If:

• You're disciplined and don't need quick wins
• You're motivated by math and saving money
• Your highest-rate debt is also relatively small
• You want to be debt-free as fast as possible

Hybrid Approach

You can also combine both: start with snowball to knock out 1-2 small debts for momentum, then switch to avalanche to save on interest. There's no rule against adjusting your strategy mid-game.

Important: Pay Minimums on Everything

Regardless of which method you choose, always pay at least the minimum on every debt. Missing payments hurts your credit score and can trigger penalty rates.

The Real Key: Increase Your Payment

The snowball vs avalanche debate matters less than simply paying more than the minimum. If you can increase your monthly payment by $100 or $200, you'll pay off debt faster regardless of which strategy you use.

Step-by-Step: Getting Started

1. List all your debts — Balance, interest rate, minimum payment
2. Calculate your total available — Income minus essential expenses
3. Choose your strategy — Snowball or avalanche
4. Automate minimum payments — Never miss a payment
5. Put extra toward your target debt — One debt at a time
6. Celebrate each payoff — Then move to the next

Related Tools

• Debt Payoff Calculator
• Snowball vs Avalanche Calculator
• How to Pay Off Credit Card Debt Fast

Sources

• CFPB: How to Save Money to Pay Off Debt
• Gal & McShane (2012). "Can Small Wins Help Achieve Big Goals?" Journal of Marketing Research.