Question 1

What is the debt avalanche method?

Accepted Answer

The debt avalanche method prioritizes paying off debts with the highest interest rate first, regardless of balance size. You make minimum payments on all debts and put all extra money toward the highest-rate debt. Once it is paid off, you roll that payment to the next highest-rate debt. This method minimizes total interest paid and is mathematically optimal — it consistently saves more money than the snowball method. The trade-off is that it can take longer to pay off the first debt if the highest-rate balance is also the largest, which some people find demotivating.

Question 2

What is the debt snowball method?

Accepted Answer

The debt snowball method prioritizes paying off debts with the smallest balance first, regardless of interest rate. You make minimum payments on all debts and put all extra money toward the smallest balance. Once paid off, the payment rolls to the next smallest balance — building a larger snowball of payments with each debt eliminated. The method provides faster psychological wins through account closures, which research suggests helps people stay motivated and ultimately become debt-free. The trade-off is that you typically pay more in total interest than the avalanche method.

Question 3

Which is better — debt avalanche or debt snowball?

Accepted Answer

The avalanche method saves more money in total interest paid, sometimes significantly so if your highest-rate debts also carry large balances. The snowball method is better for people who need psychological momentum to stay on track. Research on behavior suggests the snowball method leads to higher completion rates for people who have struggled with debt payoff previously. If you are disciplined and motivated, use the avalanche. If you have failed at debt payoff before or have many small debts alongside large ones, the snowball may keep you on track — and a completed debt payoff at slightly higher cost beats an abandoned avalanche plan.

Question 4

How much can you save by paying off debt faster?

Accepted Answer

The interest savings from aggressive debt payoff can be substantial. On a $10,000 credit card balance at 22% APR with a minimum payment, you would pay approximately $14,400 in interest over 15+ years before paying it off. Adding just $100/month above the minimum cuts the payoff time to about 3.5 years and saves roughly $11,000 in interest. Adding $300/month above the minimum pays it off in under 2 years and saves nearly $13,000. The savings compound dramatically with higher-rate debt and larger extra payments.

Debt payoff priority calculator

Snowball vs. avalanche, explained

What this calculator doesn't include

The one thing that matters more than the method