Two Paths to Debt Freedom

Both methods help you pay off debt, but they work differently. Let's say you have three debts:

• Credit card A: $5,000 at 22% interest
• Credit card B: $2,000 at 18% interest
• Car loan: $8,000 at 6% interest

Debt Snowball Method

Pay minimums on everything, then throw all extra money at the smallest balance first. In this case, you'd attack the $2,000 card first, then the $5,000 card, then the car loan.

Pros: Quick wins boost motivation. Seeing accounts disappear keeps you going.

Cons: You pay more interest overall.

Debt Avalanche Method

Pay minimums on everything, then throw all extra money at the highest interest rate first. Here, you'd attack the 22% card, then 18% card, then the car loan.

Pros: Saves the most money in interest.

Cons: Can feel slow if your highest-rate debt has a big balance.

Which Wins?

Mathematically, avalanche saves more money. Psychologically, snowball keeps more people motivated. Pick the one you'll actually stick with. Some people even do a hybrid - knock out one small debt for motivation, then switch to avalanche.

Ready to create your debt payoff plan? Use our Debt Repayment Calculator to see how fast you can become debt-free!