If you have multiple debts — credit cards, personal loans, student debt, car finance — you have a choice to make about which to pay off first. Two strategies dominate the personal finance world: the debt snowball and the debt avalanche. Here's the honest comparison.
The snowball method, popularised by Dave Ramsey, is simple: pay off your smallest debts first, regardless of interest rate. Make minimum payments on everything else, and throw every extra pound at the smallest balance until it's gone. Then redirect that payment to the next smallest debt.
Why it works: Psychology. Eliminating a debt entirely, even a small one, creates a powerful sense of progress. Research shows that people who use the snowball method are more likely to stay committed and become debt-free than those who use mathematically optimal strategies.
The downside: You'll pay more in interest over time. If your small debt has a 5% rate and your large debt has a 25% rate, you're leaving the expensive debt to compound while clearing the cheap one first.
The avalanche method is the mathematically optimal approach: pay off debts in order of interest rate, highest first. Make minimums on everything else, and throw your extra payments at the highest-rate debt.
Why it works: It minimises the total interest you pay. If your highest-rate debt is a 29.9% APR credit card, every day that balance exists is expensive. Eliminating it first stops the bleeding fastest.
The downside: If your highest-rate debt is also a large one, it can feel like you're making no progress for a long time. This is when people give up.
The research: A 2016 study published in the Journal of Marketing Research found that people who focused on paying off individual accounts completely (snowball) reduced their debt more than those who focused on minimising interest charges (avalanche). The emotional wins mattered more than the maths.
For most people, the difference in total interest paid between snowball and avalanche is smaller than you'd think — often $200–$500 on a typical debt portfolio. The more important factor is actually doing something rather than which method you pick.
Where the difference becomes significant is on large, long-term, high-rate debts. If you have $15,000 on a 30% APR credit card and $500 on a 0% store card, avalanche is clearly right — the choice is obvious.
Our Debt Payoff Calculator runs both the snowball and avalanche methods simultaneously, showing you total interest paid, months to debt-free, and your payoff date for each approach.
Use the Debt Payoff Calculator →The "best" debt repayment strategy is the one you'll actually stick to. Don't let perfect be the enemy of good.