Short Answer: The debt avalanche method usually saves the most interest because it targets the highest APR first. The debt snowball method can be easier to stick with because it pays off the smallest balance first.
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Formula and Method
monthly interest = outstanding balance × annual rate ÷ 12
Both methods make every minimum payment and direct the remaining monthly budget to one target debt. Avalanche targets the highest interest rate; snowball targets the smallest balance. Recalculate after each payoff because the freed minimum payment rolls into the next target.
Worked Example
List minimum payments
$150 + $250 = $400/month
Every account remains current before extra money is assigned.
Find the extra payment
$500 budget − $400 minimums = $100/month
This amount goes to the selected target debt.
Choose a strategy
avalanche → 18.99% card; snowball → $5,000 balance
The default example points both methods to the card, but other debt lists can produce different orders.
When Avalanche Wins
Use avalanche when interest savings are the priority and you can stay motivated without quick balance eliminations.
When Snowball Wins
Use snowball when momentum matters. Paying off a small account can create the behavioral reward needed to continue the plan.
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Frequently Asked Questions
Which method is mathematically best?
Avalanche is usually mathematically best because it attacks the highest interest rate first.
Which method is emotionally easier?
Snowball can be easier because it creates faster visible wins by closing smaller balances first.
Can I combine both methods?
Yes. Many people pay off one or two small balances first, then switch to avalanche for the remaining debt.