You have five debts totaling $40,000. Credit cards at 22%, a car loan at 6%, a personal loan at 12%, student loans at 4%, and medical bills at 0%. How do you attack them? The debt avalanche says highest interest first - kill that 22% credit card. The debt snowball says smallest balance first regardless of rate. They both work, but for different reasons.
The avalanche method wins on pure math. Pay minimums on everything, throw all extra money at the highest-rate debt. Once that's gone, attack the next-highest rate. You pay less total interest this way - sometimes thousands less. On $40,000 in mixed debt, avalanche might save you $3,000-$4,000 compared to snowball over three years. That's real money.
But here's what kills the avalanche method: psychology. That 22% credit card might have a $8,000 balance. At $400/month extra payment, it takes 24 months to clear. Two years of grinding before you get a single win. Most people quit. They get discouraged, stop making extra payments, or take on new debt before finishing the first one. The math works, but humans don't.
The snowball method ignores interest rates. Pay minimums on everything, attack the smallest balance first. Knock it out fast - maybe in 2-3 months. Now you have one less payment, one less bill, and a psychological win. That momentum matters. You take the payment from the cleared debt and add it to the next-smallest balance. Each payoff happens faster than the last. You see progress constantly.
| Method | Total Interest Paid | Time to First Payoff | Success Rate |
|---|---|---|---|
| Avalanche (high rate first) | $7,200 | 18-24 months | Low (40%) |
| Snowball (small balance first) | $8,500 | 2-4 months | High (70%) |
Research shows snowball works better for most people. Studies found 70% of people using snowball became debt-free, while only 40% using avalanche finished. The $1,300 extra interest you pay with snowball? Worth it if you actually complete the plan instead of giving up. A finished debt payoff that costs more beats an abandoned mathematically-optimal plan.
Exception: if you're highly disciplined and motivated by optimization, avalanche is better. But be honest with yourself. Have you started and quit debt payoff plans before? Do you need quick wins to stay motivated? Then snowball is your answer. The best debt payoff strategy is the one you'll actually finish. Small victories beat mathematical perfection you never achieve.