List your debts and compare two payoff strategies: snowball (smallest balance first) and avalanche (highest rate first).
Snowball (smallest balance first)
Avalanche (highest rate first)
Snowball or avalanche — which should you pick?
Both methods pay every minimum every month and throw all spare money at one target debt. The avalanche targets the highest interest rate, which is always the mathematically cheapest route. The snowball targets the smallest balance, which clears individual debts sooner and gives you visible wins early.
If the interest saved by the avalanche is small, the snowball is often the better real-world choice, because the motivation of closing an account keeps people going. If the gap is large, follow the avalanche. Either way the biggest lever is the extra monthly payment: every additional unit goes straight against principal.
Avalanche beats snowball by 157. That is the whole argument
The avalanche method — highest interest rate first — is mathematically optimal, and the internet treats that as settling the question. On a realistic set of debts it saves 157 over thirty-two months. If clearing a balance early keeps you paying, the snowball's smaller balance first is worth more than the 157 it costs.
How it works
- Simulates paying multiple debts month by month, applying minimums to all and the surplus to one.
- Compares ordering by interest rate against ordering by balance.
- Reports both the months to clear and the total interest, since only the second differs much.
each month: pay the minimum on every debt, then put every spare unit on the target debt avalanche → target the highest rate snowball → target the smallest balance both clear the same total; only the interest and the order differ
Worked example
16,000 across three debts — 5,000 at 22%, 3,000 at 18%, 8,000 at 9% — with 600 a month available.
- avalanche targets the 5,000 at 22% first
- snowball targets the 3,000 at 18% first
- avalanche: 32 months, 2,924 of interest
- snowball: 32 months, 3,081 of interest
The same thirty-two months either way, and 157 more interest on the snowball — about 5% of the total interest and under 1% of the debt. The optimal method is optimal by a margin most people would not notice.
Reading the result
- Both are far better than paying minimums. Whichever order you choose, directing the entire surplus at one debt rather than spreading it is where the real saving lives — the choice between the two methods is a rounding detail beside that.
- The gap widens when the rates differ more. Three debts spanning 9% to 22% produce a 157 difference; a 4% loan against a 30% card would produce a much larger one, and there avalanche deserves the argument.
- Snowball's advantage is completion, not arithmetic. Closing an account is a visible, final event, and if that keeps someone paying for thirty-two months rather than abandoning the plan at month nine, it has earned far more than 157.
- Check for a balance transfer before optimising the order. Moving a 22% card to a 0% promotional period usually saves more than either method, though the transfer fee and the rate after the promotional window both belong in the comparison.
Common questions
- Which method should I use?
- Whichever you will actually finish. Avalanche is cheaper by 157 here; snowball closes an account sooner. If you have run out of motivation on previous attempts, that is real information about which one will work, and it outweighs the difference.
- Is it worth paying more than the minimum?
- That is the decision that matters. Minimum payments on revolving credit are structured to keep the balance alive for years — the surplus is what clears the debt, and where it goes is a second-order question.