If you’re carrying multiple balances—credit cards, personal loans, medical bills, or student loans—paying “a little extra on everything” often feels like running in place. Two proven payoff strategies solve that by giving you a clear order of attack: the debt snowball and the debt avalanche.
Both methods work the same way at the core: you keep making the minimum payment on every debt to stay current, then you direct all extra money to one targeted debt until it’s paid off—then “roll” that freed-up payment into the next debt.
The Debt Snowball Method (smallest balance first)
What it is:
You prioritize debts from smallest balance to largest balance, regardless of interest rate.
Why it works:
Paying off a smaller balance sooner can create quick wins that feel motivating—especially if you’re overwhelmed by multiple bills. As each balance disappears, your payment power “snowballs” into the next payoff.
How to do it:
- Make a list of all debts (balance, minimum payment, due date).
- Sort debts smallest balance → largest balance.
- Pay minimums on everything.
- Put extra money toward the smallest balance.
- After it’s paid off, roll that full payment (minimum + extra) onto the next-smallest balance.
Best for: People who need visible progress fast to stay consistent.
The Debt Avalanche Method (highest interest rate first)
What it is:
You prioritize debts from highest interest rate to lowest interest rate, regardless of balance size.
Why it works:
High-interest debt is the most expensive to carry long-term. Paying it off first generally reduces the total interest you’ll pay over time.
How to do it:
- Make a list of all debts (balance, interest rate, minimum payment, due date).
- Sort debts highest rate → lowest rate.
- Pay minimums on everything.
- Put extra money toward the highest interest rate debt.
- After it’s paid off, roll that full payment onto the next-highest rate debt.
Best for: People who want the most cost-efficient approach and can stay patient early on.
Snowball vs. Avalanche: How to Choose
There’s no universal “right” answer—both are legitimate.
A good way to decide:
- Choose avalanche if saving on interest is your top priority and you can handle slower early wins.
- Choose snowball if motivation is the biggest challenge and you want faster “debts eliminated” milestones.
- Consider a hybrid if your situation calls for it (for example, knock out one tiny balance for momentum, then switch to highest interest).
Make Either Method Work Better
Get organized first
Have your balances, minimum payments, due dates, and interest rates in one place so you can follow the plan consistently.
Budget “beyond the minimum”
Both methods depend on finding room for extra payoff. Even a small extra amount matters, because each payoff increases how much you can roll forward.
Don’t miss minimum payments
Falling behind can hurt your credit and add fees—making payoff harder.
A simple takeaway
- Snowball: smallest balance first → faster emotional wins.
- Avalanche: highest interest first → usually lower total interest cost.
- Both require: minimum payments on all debts + extra toward one target debt + roll payments forward.