If you're stuck with high-interest credit card debt, you’ve probably heard about two ways to pay it off: the snowball method and the avalanche method. But which one is better? The answer might surprise you. Both work well, and the most important thing is picking the one that keeps you motivated to keep going.
Let’s break down how each strategy works.
The snowball method is all about small wins. You start by paying off the debt with the smallest balance first, while still making minimum payments on the rest. Once the smallest one is gone, you roll that payment into the next smallest, and so on. Like a snowball rolling down a hill, your wins grow over time.
The avalanche method focuses on saving the most money on interest. With this strategy, you pay off the debt with the highest interest rate first, while making minimum payments on the others. When that’s paid off, you move to the next-highest rate debt, and so on.
Say you have three credit cards:
Card A: $500 balance at 18% interest
Card B: $2,000 balance at 22% interest
Card C: $1,500 balance at 15% interest
You can afford to put $400 per month toward debt.
Using the Snowball Method, you’d:
Pay off Card A first (smallest balance).
Then move to Card C ($1,500).
Finally, tackle Card B ($2,000).
Using the Avalanche Method, you’d:
Start with Card B (highest interest).
Then pay off Card A (18%).
Finish with Card C (15%).
Let’s say you follow each plan exactly. The avalanche method will save you more in interest - about $50 total - and you'll be debt-free 1 month sooner. So, on paper, avalanche is the better method.
But here’s the catch: many people get discouraged when they don’t see progress. With the snowball method, that first small win comes fast, and that can help you stay on track. In the long run, any payoff strategy you stick with is better than one you quit.
Here's the truth: no strategy works if you’re not paying enough. Whether you choose snowball or avalanche, the real difference is how much money you put toward your debt each month. As much as you can, try to avoid making only minimum payments.
In our example, if you paid only $250 per month instead of $400, you'd be in debt for 8 months longer no matter which strategy you use. But if you manage to bump your payment to $500 or more, you'll finish months sooner and save more in interest, even with the snowball method.
The snowball method works best if you need quick motivation. The avalanche method is the most-optimized way to save money. But in the end, both lead you out of debt. What matters most is getting started and sticking with it.
No matter what you choose, every dollar you put toward your debt is a step in the right direction. Keep going. You've got this!