Two methods dominate every debt payoff conversation. One is mathematically optimal. The other is behaviorally optimal. Most advice picks a side and doesn't explain the actual tradeoff, so here's both, with real numbers.
The avalanche method
Line up your debts by interest rate, highest first. Pay minimums on everything, and throw every extra dollar at the highest-rate debt until it's gone, then roll that payment into the next-highest rate. This minimizes total interest paid, full stop — it's the mathematically correct answer if the only variable that matters is dollars.
The snowball method
Line up your debts by balance, smallest first, ignoring interest rate entirely. Pay minimums on everything, throw extra at the smallest balance until it's gone, then roll that payment forward. You'll typically pay somewhat more in total interest than with the avalanche — but you get a full payoff, a real win, much sooner.
A worked example
Say you have three debts: a $1,000 card at 24% APR, a $4,000 card at 19% APR, and a $9,000 personal loan at 11% APR, and you can put $400/month total toward debt.
Avalanche tackles the $4,000 card at 19% first (it's higher rate than the $1,000 card... actually the $1,000 card at 24% is highest, so avalanche starts there too in this case) — when rates and balances don't line up the same way, avalanche and snowball genuinely diverge, and avalanche will save you real money, typically anywhere from a few hundred to over a thousand dollars depending on the spread between rates and balances involved.
Snowball in this example would also start with the $1,000 balance since it happens to be both smallest and highest-rate here — but change the numbers so the smallest balance carries the lowest rate, and snowball will cost you more in total interest while getting you your first "debt-free" win faster.
The methods only disagree when your smallest balance and your highest rate are different debts. When they're the same debt, there's no real choice to make.
So which should you actually use
The honest answer depends on why past attempts to pay down debt have failed, if they have:
- If you've stuck with payoff plans before and the math is what motivates you, avalanche will save you real money with no behavioral downside.
- If you've abandoned payoff plans before because progress felt invisible, snowball's faster first win is worth the extra interest — a plan you actually finish beats a theoretically optimal one you abandon in month four.
- A hybrid works too: knock out any tiny balance under, say, $500 first for a quick win regardless of rate, then switch to avalanche order for everything else.
Check your own numbers
Use the debt payoff calculator to see how long a given balance takes to clear at your real interest rate and payment amount — running your actual numbers usually matters more than which method you pick, since increasing the payment amount itself shrinks the timeline far more than switching between snowball and avalanche does.
The takeaway
Avalanche saves money. Snowball saves motivation. Both beat doing nothing by an enormous margin — the method you'll actually stick with is the right one for you.