Debt Snowball vs Debt Avalanche – Which is Better?

Debt sucks.  Watching large chunks of your paycheck go towards credit cards, student loans, car loans, and a mortgage can be disheartening and make you feel like a puppet.  When you are in debt you’re forced to work and earn money that you can’t even enjoy.  Your creditors get to enjoy the fruits of your labor.

If you ever want to enjoy true financial freedom you need to cut the puppet strings and rid yourself of debt for good.  Obviously that is easier said than done, but with hard work and determination you can do it.

But where should you begin?  What is best and most effective way to pay down debt?

Let’s take a look at two popular debt repayment methods called the debt snowball and the debt avalanche.

The Debt Snowball

The debt snowball technique has been popularized by radio talk show host Dave Ramsey and it involves paying off your debts starting with the one with the lowest balance.  You’ll make only the minimum payment on all other debts while throwing as much extra money as possible at the smallest one.  Once that is paid off you move on to the next smallest debt and so forth until you are debt free.

The disadvantage to this method is that if your smaller balances have lower interest rates than other debt, you will end up paying more interest in the long run.  The main advantage is the psychological boost of paying off that first debt and the momentum it can provide to stick with the plan.

The Debt Avalanche

If you choose this method you will line up all of your debts in order from the highest interest rate to the lowest.  You’ll make the minimum bill payment on each of them and then pay as much as you can toward the one with the highest interest rate.

Once that first debt is paid off you simply move on to the one with the next highest interest rate.   This method will ensure you pay the least interest but it can be tough to stay motivated if that first debt has a particularly large balance.

Which Method is Best?

If you do the math you’ll see that the debt avalanche method will pay off your debt fastest and cost you the least amount of interest charges, so logically that would be the best method.  But most people are not completely logical like Mr. Spock.  Instead, we sometimes let our emotions get the best of us.

Did someone say Spock?

This is exactly why Dave Ramsey advocates the debt snowball method.  He believes that even though they will pay a little more interest using his method, they are more likely to stick with it for the long term.

In the end, there is no one right answer.  Remember, they don’t call it personal finance for nothing.  The best debt repayment method is whichever one works best FOR YOU.

The Debt Movement

My online buddy Jeff Rose of Good Financial Cents has put together an amazing movement that includes hundreds of financial bloggers and thousands of everyday people just like you.  The goal is to form a community dedicated to eradicating debt and becoming financially free.

They’ve set the goal of paying off $10 million in debt in just 90 days.  They’ve also lined up some cool corporate sponsors who will be offering “debt scholarships” to help people put a dent in the dent!

To learn more and join the movement so you can live debt free, go to  Do it right now…before you forget!  It might just change your life forever.

The following two tabs change content below.
Mike is a freelance writer and blogger who specializes in finance and parenting topics. He is a dedicated husband and father of three who is obsessed with creating multiple streams of income and building wealth so he can achieve true financial freedom for his family. Like what you're reading? Subscribe to our free RSS feed and follow us on Twitter.

Latest posts by Mike Collins (see all)


  1. says

    When I was an advisor, we’d typically use a combo of the two: if I could knock off some small balances first to get some “wins” and (more importantly) cash flow, I’d do that first. Then we’d realign toward biggest interest rate (and often we’d use balance transfers to lower the rate, too, but this I wouldn’t recommend unless you could reliably cut up the old card and close the account.

  2. says

    Hey Mike, great article here. I love the way your broke down the comparison. I often refer to the debt avalanche as the debt stacking payment method. It’s a great way to go, especially coupled with a constant payment. Thanks for the incredible read!

  3. says

    Both make logical and financial sense I wouldn’t tell you someone not to do the debt avalanche, but I do think that money is more than numbers and prefer the debt snowball.

  4. says

    I actually prefer a version where I attack the debt which pissed me off the most. In my case it was borderline snowball and avalanche so I was good with it. Plus my student loans’ interest rates are low (under 3%) so I was satisfied. Great post.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge