If you have several debts, the order you pay them off matters. The avalanche method targets the highest interest rate first; the snowball method targets the smallest balance first. Plan each card with the calculator below.
Worked example: $500 a month towards three debts
| Debt | Balance | Rate | Minimum |
|---|---|---|---|
| Card A | $3,000 | 24% | $90 |
| Card B | $1,000 | 18% | $30 |
| Loan C | $6,000 | 9% | $150 |
| Avalanche | Snowball | |
|---|---|---|
| First debt cleared | Month 11 (Card A) | Month 4 (Card B) |
| Debt-free in | 23 months | 23 months |
| Total interest | $1,225 | $1,277 |
The avalanche saves the most money. The snowball costs a little more here but clears a debt much sooner, which keeps many people motivated.
Which should you choose?
- Choose avalanche if your rates are very different and you can stick to a plan.
- Choose snowball if you have struggled to stay on track and quick wins would help.
- Either way, always pay at least the minimum on every debt and stop adding new debt.
Frequently asked questions
Does a balance transfer help?
A 0% balance transfer can cut interest a lot if you clear it before the offer ends and the fee is small.
Should I use savings to pay off debt?
Keep a small emergency fund, then using savings to clear high-interest card debt is usually worthwhile.
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