Snowball vs Avalanche: Which Debt Method Wins?

Both methods pay minimums on everything and attack one debt with the extra. They differ only in which debt you attack first.

Avalanche targets the highest interest rate. Mathematically optimal. Snowball targets the smallest balance. Psychologically optimal.

The math, with real numbers

Say you have $400/month total to put toward:

Debt	Balance	APR	Minimum
Store card	$800	26%	$25
Credit card	$5,200	19%	$110
Car loan	$9,000	6%	$210

Avalanche order: store card → credit card → car loan. Snowball order: store card → credit card → car loan.

In this case they agree — which happens more often than the internet suggests. Where they diverge is when a big balance carries the highest rate. Then avalanche typically saves a few hundred to a couple thousand dollars in interest over the life of the plan.

Why snowball still wins for many families

Debt payoff is a multi-year behavior, and behaviors need reinforcement. Closing an account in six weeks produces a real motivational payoff that "you saved $340 in theoretical interest" does not. Studies of consumer repayment consistently find that people who close small balances early are more likely to finish the whole plan.

The best method is the one you complete.

A practical hybrid

Clear anything under ~$500 first, regardless of rate — quick wins, fewer bills to manage.
Then switch to strict avalanche for the rest.

You get one motivational victory and keep most of the interest savings.

Two things that beat both methods

The amount you send. Going from $200 to $350 extra per month changes the finish date more than any ordering choice.
Not adding new debt. Every method assumes the balances only go down.

Model it before you commit

In the Debts tab, switch between Highest interest and Lowest balance and compare the two payoff dates and total interest side by side. If the difference is small, choose the one you'll stick with. If it's large, take the math.