Debt Snowball vs. Debt Avalanche: Which Strategy Wins?

When it comes to paying off debt, two strategies dominate the conversation: the debt snowball and the debt avalanche. Both work, but they take different approaches.

The Debt Snowball Method

Pay off debts from smallest to largest balance, regardless of interest rate. Make minimum payments on all debts except the smallest, which gets all your extra money.

Pros: - Quick wins build motivation - Psychological momentum keeps you going - Simplifies decision-making

Cons: - May pay more in interest overall - Takes longer mathematically

The Debt Avalanche Method

Pay off debts from highest to lowest interest rate. Make minimum payments on all debts except the one with the highest rate.

Pros: - Saves the most money on interest - Mathematically optimal - Faster debt-free date

Cons: - First payoff may take longer - Requires more discipline

Which Should You Choose?

Choose the snowball if you need motivation and quick wins. Choose the avalanche if you're disciplined and want to minimize interest paid. The best method is the one you'll stick with.