Compare both strategies and see which saves more interest or gets you debt-free sooner.
Enter up to 4 debts. Add balance, rate, and minimum payment for each.
If you have multiple debts — credit cards, student loans, car loans, medical bills — you face a strategic question: which one do you attack first? Two dominant strategies have emerged from personal finance research and practice: the debt snowball and the debt avalanche. Both work. The debate is about which one works better for your specific psychology and financial situation.
The debt snowball, popularized by Dave Ramsey, targets your smallest balance first regardless of interest rate. The debt avalanche targets your highest interest rate first regardless of balance. Mathematically, the avalanche always minimizes total interest paid. Behaviorally, the snowball often wins because it delivers faster psychological wins that keep people engaged.
With either strategy, the mechanics are the same: make minimum payments on every debt except your target debt, and throw every additional dollar at the target. When the target is paid off, roll that payment — plus the freed-up minimum — into the next target. This is the 'rollover' effect that gives both strategies their power. Your total monthly payment stays constant, but as each debt is eliminated, more of it attacks the remaining balances.
Debt A: $1,200 balance at 15% APR, $30 minimum. Debt B: $4,500 balance at 22% APR, $90 minimum. Debt C: $8,000 balance at 9% APR, $160 minimum. Total minimum: $280. With $200 extra per month (total $480): Snowball attacks Debt A first (smallest balance) — paid off in 3 months, then rolls to Debt B. Avalanche attacks Debt B first (highest rate) — takes longer to see the first payoff but saves more total interest.
You have struggled to stick with a debt payoff plan before. You have several small balances you can eliminate quickly. Motivation and momentum matter more to you than mathematical optimality. You need to see progress to stay committed.
You are highly motivated by numbers and long-term optimization. Your highest-rate debt also has a large balance (making the interest savings very significant). You have the discipline to stay the course without quick wins. You want to minimize the total cost of becoming debt-free.
You have one or two very small balances (under $500) alongside larger high-rate debts. Pay off the small ones first for the quick win, then switch to avalanche logic for the rest. Many people find this combines the motivational benefit of the snowball with the financial efficiency of the avalanche.