Debt snowball vs. debt avalanche.

In plain English

The snowball and the avalanche are two ways to order the debts you pay off when you have some extra money each month beyond the minimums. In the snowball, you throw the extra at the smallest balance first, regardless of its interest rate, then roll that freed-up payment onto the next smallest. In the avalanche, you throw the extra at the debt with the highest interest rate first, then move down the rate ladder. The avalanche costs the least in total interest by the math. The snowball tends to be easier to stick with because clearing a whole balance early is a visible win. The gap between them is usually modest unless your rates are far apart.

01Why it matters

The two orders can differ by hundreds of dollars in interest and by months of payoff time, and people typically weigh a smaller interest bill against the momentum of clearing a balance sooner, so seeing both numbers side by side is the point.

02The math, step by step

Say you have a 500 dollar card at 20 percent and a 4,000 dollar card at 24 percent, with 200 dollars extra a month. The avalanche hits the 4,000 dollar card first and pays less total interest. The snowball clears the 500 dollar card in the first month, freeing its minimum to pile onto the next debt. In this spread the avalanche saves a little interest; with rates closer together, the two land almost the same.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

Every figure on this page is sourced to a primary document. Tap to open the original.