The two methods in plain English

Both methods start the same way. You list every debt, pay the minimum on each one every month and add whatever extra money you can. The difference is where that extra money goes.

• Debt avalanche: send the extra to the debt with the highest interest rate. You attack the most expensive debt first, which reduces the total interest you pay.
• Debt snowball: send the extra to the debt with the smallest balance. You wipe out individual debts faster, which gives you quick wins and fewer bills to track.

In both, when a debt is paid off, its payment rolls into the next target. That roll-over is what builds momentum: your total monthly budget stays the same, but more and more of it goes toward principal.

Our $10,000 example

Here are three common types of debt adding up to $10,000, with combined minimum payments of $315 a month. We add $185 of extra money for a total budget of $500 a month.

This setup is where the two methods disagree. The smallest balance, the store card, is not the most expensive one. The credit card has the highest rate but a mid-sized balance.

Avalanche: highest rate first

The avalanche sends the extra $185 to the 27% credit card first, then the 19% store card, then the 9% loan.

1. Credit card paid offMonth 16
2. Store card paid offMonth 18
3. Personal loan paid offMonth 24
4. Total interest$1,583.90

The first debt does not disappear until month 16. For more than a year you are still juggling three payments, even though the plan is working.

Snowball: smallest balance first

The snowball sends the extra $185 to the $1,200 store card first, then the credit card, then the loan.

1. Store card paid offMonth 6
2. Credit card paid offMonth 18
3. Personal loan paid offMonth 24
4. Total interest$1,693.80

The store card is gone within six months, and you are down to two payments for the rest of the plan. The cost of that early win is $109.90 in extra interest, because the 27% card carries its balance longer.

How your budget changes the gap

The size of the difference depends on how much you pay each month. Here is the same $10,000 at four budgets:

Two lessons stand out. First, the difference between the methods is modest, never more than about $110 here. Second, the monthly budget matters far more than the order. Going from $315 to $500 a month cuts the timeline by 21 months and saves more than $2,300 in interest, no matter which method you pick.

The gap between methods grows when your balances are large and your interest rates are far apart. With several high-rate cards and a few thousand dollars on each, the avalanche can save noticeably more.

Which one should you choose?

Choose the avalanche if

• You are motivated by numbers and want to pay the least possible interest.
• Your highest-rate debt is not much bigger than the others.
• Your interest rates are far apart, such as a 29% card next to a 7% car loan.

Choose the snowball if

• You have tried to pay off debt before and lost steam.
• You have one or more small balances you could clear within a few months.
• Juggling many due dates is stressful and you want fewer bills quickly.

The motivation argument has some research behind it. A study by David Gal and Blakeley McShane, published in the Journal of Marketing Research in 2012, found that consumers who closed out individual debt accounts were more likely to eliminate their overall debt. In other words, small wins can help people keep going.

Or use a hybrid

Many people start with the snowball to clear one or two tiny balances, then switch to the avalanche for the rest. In our example, you could knock out the $1,200 store card first for a quick win and then focus on the 27% card. You get the early boost without giving up much interest.

Ways to speed up either plan

1. Stop adding new charges. New balances undo your progress, whichever method you use.
2. Automate payments. Set autopay for every minimum and a scheduled transfer for the extra amount.
3. Find more monthly money. Even $100 more shortens the plan. Our guide on paying off $5,000 in credit card debt shows how much each extra dollar saves.
4. Lower your highest rate. A balance transfer or a consolidation loan can cut interest. The Loan Calculator shows what a consolidation loan payment would be.
5. Use raises and windfalls. Put part of any raise, bonus or tax refund toward the target debt.

Frequently asked questions

How we calculated these numbers

Each scenario was simulated month by month. Interest on each debt is the balance times its APR divided by 12, rounded to the cent. Every debt receives its minimum payment, the rest of the monthly budget goes to the target debt, and each paid-off debt's payment rolls to the next target. Real statements may differ slightly because many lenders calculate interest daily. For more on managing debt, see the Consumer Financial Protection Bureau's debt resources.